The Workplace of the Future

Front matter

The Fourth Industrial Revolution is a global development that shows no signs of slowing down. In his book, The Workplace of the Future: The Fourth Industrial Revolution, the Precariat and the Death of Hierarchies, Jon-Arild Johannessen sets a chilling vision of how robots and artificial intelligence will completely disrupt and transform working life.

The author contests that once the dust has settled from the Fourth Industrial Revolution, workplaces and professions will be unrecognizable and we will see the rise of a new social class: the precariat. We will live side by side with the ‘working poor’ — people who have several jobs, but still can’t make ends meet. There will be a small salaried elite consisting of innovation and knowledge workers. Slightly further into the future, there will be a major transformation in professional environments. Johannessen also presents a typology for the precariat, the uncertain work that is created and develops a framework for the working poor, as well as for future innovation and knowledge workers, and sets out a new structure for the social hierarchy.

A fascinating and thought-provoking insight into the impact of the Fourth Industrial Revolution, The Workplace of the Future will be of interest to professionals and academics alike. The book is particularly suited to academic courses in management, economy, political science and social sciences.

Foreword

1 The workplace of the future Introduction 1 The precariat 4 The underemployed 7 The working poor 11 The innovation worker and the knowledge worker 21 Conclusion 33 References 37

2 New organizational logic and the future of work Introduction 41 Lego flexibility 42 Experience-design and wealth creation 46 Conclusion 50 References 53

3 Innovation and the future of work Introduction 57 Extreme specialization 59 Cascades of innovation and wealth creation 64 Conclusion 68 References 70

4 Powershift in the Fourth Industrial Revolution Introduction 74 Powershifts in the Fourth Industrial Revolution 75 New ways of working 79 ICN-logic 84 vil vi

Contents

Conclusion 88 References 90

Index

Foreword

This book is about how robots and artificial intelligence will completely transform working life. Once the dust has settled from the Fourth Industrial Revolution, workplaces and professions will be unrecognizable. A new class is seeing the light of day: the precariat. We will live side by side with the ‘working poor’ — people who have several jobs, but still can’t make ends meet. There will be a small salaried élite consisting of innovation and knowledge workers. Workplaces will be unrecognizable. Robots will have destroyed bureaucratic hierarchies and torn apart the middle classes. What will remain will be contract workers with insecure jobs. We are seeing the emergence of a new class of pyjama-workers — people who can do their jobs in bed or alternatively at a café table. Slightly further into the future, we can see a major transformation in professional environments. Doctors will be medical engineers, nurses will be nursing assistants accompanied by robots. Teachers will be replaced by robots and holograms. And taking this scenario further, we see the downfall of the great dinosaurs. Metaphorically speaking, major hospitals may in these robotized times metaphorically be seen as ‘burger-van hospitals’, where robots diagnose, prescribe and make surgical interventions. If decision-makers stick their heads in the sand like ostriches, the sandstorm will bury the ostriches so that they never get their tiny heads out of the sand.

Our challenges and problems are not linked to finding solutions to the consequences of robots and artificial intelligence. What is difficult is to discard our engrained ways of understanding the concepts of work, casual labour, being at one’s workplace, and everything that is linked to the ways in which the industrial society organizes and manages work. Those woodchips you got from the oak you sawed down: can’t you glue them back together to resurrect the old tree? The point of this metaphor is that what is gone is still present in our collective memory, and that is what is difficult to change.

Although the industrial society caused the middle classes to grow and live in greater comfort, there is much to suggest that the Fourth Industrial Revolution will decimate the middle classes.

Introduction

This chapter is intended as a roadmap to explain what lies ahead for businesses and institutions, given the development of robots, informats and artificial intelligence.

We know that most jobs will change extremely rapidly. Until now, people who are educated have been able to find jobs. In the future, many people will not find jobs even though they are educated (Kessler, 2017). It seems likely that most jobs will be those either at the bottom or the top of the wage scale.!

Robots,” artificial intelligence and informats? are destroying bureaucracies and hierarchies. This hypothesis is based on the research of Abd (2017), Wilson (2017), Ross (2016), and Susskind and Susskind (2015).

The second hypothesis on which this chapter is based is as follows: robots and informatization are transferring surpluses from income from employment to investment income. A good deal of empirical research supports this hypothesis.*

The hypothesis reveals a paradox: productivity increases, the level of innovation increases, but at the same time average salary levels decline (McAffee & Brynjolfsson, 2017).

In the USA, it is projected that 50 per cent of today’s workplaces will be automated and robotized over the next 20 years (Avent, 2016: 1—4). Robotization will take place in all occupations: journalism, teaching, medicine, defence, architecture, dentistry, the service sector, transport, the merchant navy, marketing, industry, etc. (McAffee & Brynjolfsson, 2017). The last major period of automation affected jobs in industry, during which a combination of industrial robots and global wage competition decimated millions of industrial jobs and transferred many jobs from high-cost countries to low-cost countries. It appears that the next round of automation will affect jobs in the service sector. According to two Oxford professors who conducted a major study of more than 700 different service-sector occupations, half of all jobs in the American service sector are in danger of disappearing (Frey & Osborne, 2013). Although robotization is transforming most workplaces, it is also leading to fewer work-related injuries, fewer traffic accidents, better medical diagnostics, and higher quality medical and surgical interventions. Robotization will improve the everyday quality of life of sick and disabled people and those who are otherwise in need of care. Deaf people will also find their everyday lives improved by new nanorobots and other disabled people will experience improvements. According to Ross (2016: 42), robotization is a global net benefit.”

In an organization such as described above, the old ‘hamster-wheel mentality’ will be replaced by the flexibility of the panther and the feeding instinct. All panther-type organizations will be directly engaged in competition for customers, not only those organizations that are in immediate contact with customers (Susskind & Susskind, 2015). Workers in these organizations may be described as knowledge workers and innovation workers. They will have completed a long series of specialized educational programmes, including Master’s degrees and doctorates (Trot, 2015: 23; Wilson, 2017).

In a panther-type organization, everyone will be committed, motivated and focused on the customers. These are ‘the survivors’ in the organizations of the future. However, those who do not adopt this attitude will quickly fall by the wayside. In order for the organization to do what it is designed to do, it will be dependent on buying or leasing in many functions. These functions will be performed by the new contract workers, the same people who were employed previously in the organization and existed within its bureaucracy and hierarchy (Shipler, 2005). These people will now be ‘in-sourced’ by the organization on short- or long-term contracts. These new-style organizations may be ‘the company of one' (Lane, 2011). These will be people who have a high level of expertise within one or a small number of areas, which they sell to one or more businesses. Metaphorically speaking, we might envisage a swarm of insects around a honey pot. These insects compete on cost and expertise in order to land contracts with businesses. We can envisage wage competition strongly depressing the price of their labour because people who want to sell their cutting-edge expertise to businesses can be found everywhere in the global economy (Banki, 2015). Geographical proximity will no longer be a factor when seeking a high level of competence combined with good availability and reliability at the lowest possible cost (Garud et al., 2002; Gaskarth, 2015). The people who will tend increasingly to sell their expertise to businesses through temporary contracts will be members of what is known as the precariat® (Standing, 2014a, 2014b). The precariat is a direct and intentional consequence of neoliberal economic ideology (Banki, 2015; Johnson, 2015b: 1).

From the 1970s onwards, the new ideology was dominated by flexibility and competition, which gradually came to permeate all aspects of the social system (Standing, 2014a: 1). Accordingly, risk and insecurity became part of employees’ everyday lives. According to Standing (2014a: 1-4), this development means that millions of workers around the world no longer have stable employment prospects — the neoliberal agenda has created a political monster.

Members of the precariat perform insecure jobs. According to Standing (2014a: 1-4), the precariat is a specific social class that is developing worldwide. Many of its members are frustrated, angry and bitter at the élite who have put them in the positions in which they find themselves.

In the working life of the future, many, indeed very many, people — some estimates suggest 30—40 per cent of the workforce — will lose their jobs (Shipler, 2005; Wacquant, 2009a, 2009b). These people are referred to as the working poor (Shipler, 2005). This group consists of low-paid service workers and people on welfare benefits, to mention some groups (Shipler, 2005).

The new panther organizations will be extremely cost-effective and have very high levels of productivity (Murphy, 2016). They will also be good at problem-solving, have little staff turnover, and have creative and satisfied employees (Boxall & Purcell, 2010). These very well-paid employees will find their work meaningful. They will be living out their dreams in the panther organizations, and will have contacts among the precariat who can perform short-term contractual assignments (Brynjolfsson & McAfee, 2011, 2014). This kind of relationship will contribute to securing the future of ‘the company of one’. Within a panther organization, the employees will flourish using their expertise to perform their specialized knowledge tasks (Bruce & Crook, 2015). These employees will be optimistic, positive individuals who will spend much of their working lives in contact with their global competence networks (Reinmoell & Reinmoeller, 2015). Those who do not succeed in making this transformation will have been forced to leave the organization and will number among either the precariat or the working poor.

Knowledge workers and innovation workers will be the relatively privileged employees in the Fourth Industrial Revolution (Murphy, 2016; Trot, 2015: 23). Murphy has, however, omitted the people who missed the bus: the working poor and the precariat. To make this kind of organization possible, with robots taking over many job-related functions and making decisions based on efficient algorithms and artificial intelligence, many or perhaps most people will have to spend most of their ‘working lives’ outside such organizations, existing as sub-contractors working on insecure contracts (Standing, 2014a; Johnson, 2015b).

What is happening at the dawn of the Fourth Industrial Revolution is a total transformation of the nature of income-generating work (Gans, 2016). The driving forces behind this transformation are robotization, informatization, artificial intelligence, and an extreme focus on cost-efficiency due to global competition and growing individualization (Savage, 2015; Wilson, 2017).

The main question that we are exploring in this chapter is as follows: How does the workplace of the future constitute an aspect of the Fourth Industrial Revolution?

In order to respond to this main research question, we have broken it down into three sub-questions:

1. How does the precariat constitute an aspect of the Fourth Industrial

Revolution? 2. How do the working poor constitute an aspect of the Fourth Industrial Revolution?

3. How do knowledge workers and innovation workers constitute an aspect of

the Fourth Industrial Revolution?

This introduction is visualized in Figure 1.1, which also illustrates how we have structured this chapter.

Relatively : Innovation autonomous The precariat workers Working relationships Relatively The working Knowledge formal poor workers Can make ends meet The salaried elite Incomes

Figure 1.1 A typology of working life in the future.

The precariat

In his research, Guy Standing (2014a, 2014b) has identified a new class that he calls the precariat, which has emerged through globalization, liberalization, and increasing robotization and digitization. This class has the potential to change how businesses are organized in the future and how societies develop (Johnson, 2015b: 1—4). Many activist groups from the precariat have fought for better working conditions, and both pay and job security, so they can plan the future for themselves and their families better (De Sario, 2007: 21-39; Tarrow, 2005; Johnson, 201 5b).

The precariat, as the term is used here, is associated with Standing’s research (2014a, 2014b), the studies carried out by Johnson (2015a) in Italy and Arnold’s studies (Arnold, 2013) of insecure work in Vietnam. Furthermore, we also refer to the studies of Armano and Murgia (2015) of work flexibilization in the USA, as well as Ross’s (2009) studies of insecure work in the USA. In addition, we refer to Lodovici and Semenza’s (2012) studies of high-skilled youth in Europe who, despite their higher education, have insecure work and expectations of insecurity in future work relations.

We have developed a typology of the precariat in order to gain a better understanding of this phenomenon. We have divided the precariat into four types. We term the first type the underemployed. These are people with a good education and relatively long experience from working life. They are exposed to competition in the global economy and threatened by robotization, so their wages are pushed downwards (Arnold & Bongiovi, 2013: 290). The feeling of being excluded makes these people feel frustrated, alienated and angry (Johnson, 2015b). The underemployed are hired on short-term contracts depending on the company’s needs. The examples here are many. For instance, an underemployed person could be a young legal professional who takes on extra jobs in the hope of getting a permanent job, but is not rewarded for his or her extra efforts. He or she must wait until a permanent position becomes available. However, when the position does become available there are hundreds of applicants for the position, who have also taken on extra jobs in order to gain recognition (Standing, 2014a: 33-34).

The second type is a young person with a relatively good education, but who only has temporary underpaid jobs. These young people are skilled but have not had the opportunity to gain experience in the sector relevant to their education. They have been told that it pays to get an education. Consequently, they have completed so-called mid-level higher education, often up to a Bachelor’s degree. However, after completing their education they encounter a job market where they are unable to find regular well-paid jobs. We call this type the underpaid. These workers are also frustrated and angry, because they had expectations of a good job after graduation, but encountered a reality that was different from what they had been told to expect. Their anger may be explained as a crisis of expectation, i.e. the promises that these people are given when they work extra are merely a fata morgana — a mirage, an imaginary hope of a permanent job — because it is more profitable for companies to hire people on short-term contracts than to give them permanent positions.

However, despair does not necessarily lead to political action — it might just as well lead to passivity and apathy. On the other hand, Standing (201 4a: viii) says that the rebellion lies in the self-awareness of the precariat as a class: ‘Across the world, there is an energy building around the precariat.’

The third category is made up of people with specialist expertise, often at the Master’s or PhD level. These people may have had well-paid jobs before being rendered superfluous by robotization, automation, flexibilization, digitization, informatization and so on (Garud et al., 2002). Such people often establish their own businesses: ‘the company of one’ (Lane, 2011). They use these businesses to sell their expertise to larger organizations. We refer to these people as knowledge entrepreneurs. In general, these people are satisfied with their entrepreneurial situations. They are hired on short-term contracts by larger companies, large consultancies or organizations in the public sector. Although knowledge entrepreneurs have a sense of independence and freedom in their daily lives, their incomes are insecure (Lane, 2011: 13-23). They exist like operators of small coastal fishing boats off northern or western Norway. They sit alone in their little boats with their insecure incomes, but none the less they feel that they are leading free and independent lives (Johannessen, 1979). Rates of pay for knowledge entrepreneurs vary, but in general they will earn less than they would have done as permanent employees of the same organizations. Example of knowledge entrepreneurs include IT experts and software engineers. These people tend to work for large organizations on six-month contracts that can be terminated at just a few weeks’ notice.

We term the fourth type vagabond workers. These workers may be migrants and people with disabilities. They are skilled and educated and differ from ‘the working poor’. On the whole, the vagabond workers are satisfied with their working life, because their part-time jobs are better than what they had before. Migrants are often happy to be given the opportunity to get a foothold in their new country; for instance, an engineer from Syria who gets a taxi-driving job, the nurse from Iran who works the nightshift at a hotel or the lawyer who gets a short-term job at a slaughterhouse. In this way, part-time contracts can provide migrants with a qualitatively better life. As mentioned, this type also includes people with various disabilities who previously had no work experience but who can now do a meaningful job, although their income might be low; for instance, someone who is visually impaired working in a call centre, and so on.

The four categories of the precariat have in common that their jobs are temporary and insecure, and they are under pressure with regard to rates of pay and employment rights. They also feel alienated.’ Quite simply, they feel that their future not only is insecure, but has also been destroyed. The precariat also fear moving down the social ladder to the working poor.

The precariat is not yet a class with a shared ideology. Rather it is made up of isolated individuals who sit on the side-lines of society peering into a world populated by successful people, by the salaried éite — a world where people can plan their futures. This successful élite envisages this new class encroaching on to their manicured lawns, and accordingly they remain obedient to the government in accordance with the principle of protecting the future.®

All members of the precariat struggle to obtain steady full-time work. They also work long hours unpaid to show keenness to the employer, with the hope of being preferred if a full-time permanent job becomes available (which it rarely does). Speaking metaphorically, we might say it is easier for a member of the precariat to win the lottery than to obtain a secure, well-paid, full-time job with good prospects. In addition, most members of the precariat? lack a sense of solidarity with others in the precariat, the trade union movement or a political party. They feel themselves to be excluded by most established institutions. According to Standing, their basic attitude is ‘fuck politics’.'? Members of the precariat do not see themselves as a social class. They have no collective aims, but simply struggle to make ends meet. It is only when they gain class consciousness as a separate social class that they will come to change the social system (Standing, 2014a: 1-4).

The description above has been developed into a typology, which is shown in Figure 1.2.

The underemployed Knowledge ; : 4 entrepreneurs Relatively high 3 Hired on demand Temporary contracts Degree of autonomy Vagabond

The underpaid P workers

L Relatively small Seng Temporary Migrants who are able jobs to do part-time work Frustrated Satisfied

Mode

Figure 1.2 A typology of the precariat.

The workplace of the future 7 The underemployed

The underemployed go in and out of temporary jobs, and their rights in the labour market are very insecure. They are unable to find jobs that match their education, resulting in existential insecurity (Coates & Morrison, 2016: 134— 167). Their broken dreams make them frustrated, angry and at times aggressive. In this frustration lies rebellion, according to Standing (2014a: vii).

Today the proportion of young people with higher education is much greater than in the past. Despite this, Trot (2015: 25-26) says that young people cannot expect to find a job that matches their education. They also have difficulty finding a job they think is meaningful (Coates & Morrison, 2016: 116-134). If and when they get a job, it’s often based on a temporary contract and poorly paid."

It seems to be the case that it is the relatively highly educated, rather than those with little education, who experience the greatest uncertainty in finding a job and job security (Armano & Murgia, 2015: 106). For instance, 40 per cent of the graduates in Spain are in poorly paid jobs one year after graduating (Standing, 2014a: 67). The new generation of European university graduates have not been able to realize the future they had envisioned at the outset of their studies (Mason, 2012: 71). They have also taken out loans which they had planned to pay back when finding a job after graduating; this proves difficult when their present income is much lower than they had planned for (Standing, 2014a: 68). This frustration easily leads to anger and rebellion against the establishment (Mason, 2012: 71-80), i.e. the political, economic, intellectual and cultural élite. These indebted students on low incomes also belong to the emerging group of debt-laden home owners. One of the consequences of the situation described is the obedient and disciplined worker hired on a part-time basis and on contract (Lazzarato, 2012: 7).

You’re free as long as you can pay your debts, writes Lazzarato (2012: 31). Thus, the underemployed are willing to do any jobs that are available (Coates & Morrison, 2016: 187-217). Those who are highly educated are also willing to do non-paying jobs, so they can get a ‘foot inside the door’ of large companies — for instance, by means of non-paid or poorly paid ‘internships’ (Perlin, 2011: 36). These young people had been promised that when they graduated their dreams would be realized (Ainley, 2016: 1-3). In other words, they have been grossly misled; one might even say that a whole generation has been deceived, says Ainley (2016). If and when these young people are given contracts, they are often of only a few months’ duration. When their contract runs out, they have to go back to the unemployment office (Armano & Murgia, 2015: 102).

These highly educated young people see their expectations shattered. Although their contracts may give them a high degree of autonomy, their future income is uncertain. Consequently, one might characterize this autonomy as ‘fake autonomy’ (Armano & Murgia, 2015: 106). This may be explained by the fact that these workers have limited access to welfare benefits, because these benefits are often dependent on being permanently employed.

8 The workplace of the future The underpaid

Every country in the world has its underpaid workers. In the USA, many of the underpaid can be found in the Rust Belt. Historically, these workers can trace their roots back to the days of the New Deal. The lives of these workers have become insecure through work flexibilization, which is a direct consequence of globalization. The underpaid in the American Rust Belt have been unable to compete with the lower wages of Chinese and Mexican workers. Consequently, jobs in the Rust Belt have disappeared or become insecure. At the same time, the power of the unions has been diminished (Varga, 2015: 46). Similar developments have also been taking place in all the other industrialized countries from the 1970s onwards.

Through globalization, the underpaid have joined the ranks of the precariat. They feel betrayed by the political and financial élite. They are desperate and angry, but have nobody else to vent their frustration and anger on than the élite, who have warmly expounded on the benefits of globalization, free trade agreements, and the free flow of capital and labour. Among others, this concerns workers in the American Rust Belt, Wales, Greece, Spain, Italy, France and other countries (Abrahamson, 2004). The underpaid can also be found in the service sector in big cities (Abrahamson, 2004: 49); their wages have been forced down in the competitive world of globalization. These workers are often immigrants or domestic migrants who take poorly paid jobs. In the EU, social dumping has greatly contributed to swelling the ranks of the underpaid.

The knowledge entrepreneurs

The third type in our precariat typology is the knowledge entrepreneurs. These are people with a higher education, but who cannot get or do not wish for permanent employment (Ikonen, 2015: 84). They belong to the so-called ‘self-employed society’ (Ainley, 2016: 38). They often have short-term contracts, making their conditions of employment temporary and uncertain (Du Gay & Morgan, 2004). They are freelancers who are independent and work whenever they want or need to. As a rule they don’t belong to a trade union. In the USA alone, this group of workers constitutes as many as 54 million people.'* There are many websites that cater to the employment needs of freelancers, such as Field Nation, Upwork, HourlyNerd, Toptal, Work Market and PwC Talent Exchange, to name just a few.’

Many of the knowledge entrepreneurs can be found in big cities (Abrahamson, 2004: 49), where they often operate as ‘the company of one’ (Lane, 2011). As a tule, they are often employed on temporary and insecure contracts. Their dreams are often linked to becoming innovation workers and knowledge workers, and hopefully thus becoming one of the salaried élite (Standing, 2014b: 14). Becoming a knowledge worker or innovation worker is the knowledge entrepreneur’s opportunity for upward social mobility.

On the personal level, the uncertainty of contract work requires a great deal of stamina and self-discipline (Ikonen, 2015: 83—90). The hypothesis is that the more insecure and less predictable the future, the more people will aim to become knowledge entrepreneurs because they can thus take responsibility for their own future by establishing businesses. However, only a few can make a living out of working as a knowledge entrepreneur. Therefore, they alternate between their own businesses and temporary contract jobs in large companies (Ikonen, 2015: 83). For some, the solution is to move to the big cities because the opportunities for temporary contracts are better there (Ikonen, 2015: 84-85). Domestic migration, however, is not an option for everybody (Tolonen, 2005). This may be partly explained by the fact that, when life is uncertain and insecure, having a local home-base reinforces one’s identity and security (Bolanski & Chiapello, 2017).

The knowledge entrepreneur has to deal with areas of responsibility that were formerly the responsibility of the employer, such as working hours, taxes, social security costs, responsibility for job security and so on. The point being made here is that knowledge entrepreneurs do not necessarily have the freedom normally associated with entrepreneurs. This is where the term ‘entreployee’ (Pongratz & Voss, 2003) may be justified. The knowledge entrepreneur is both an entrepreneur and an employee (Pongratz & Voss, 2003: 6-8).

The vagabond workers

The vagabond workers are relatively well educated, but they often have a disability or are migrants. They take on low-paid jobs, but are nevertheless satisfied because the alternative is so much worse (Banki, 2015: 66).

The vagabond workers distinguish themselves from the working poor with their higher level of education. However, there are also many migrants among the working poor with a low level of education.

The work situation of the vagabond workers is characterized by a very high level of uncertainty. They are often in a waiting position. They are waiting for new contracts, waiting to ‘advance’ to becoming knowledge entrepreneurs and waiting for their children to join the salaried elite. However, the opportunities for upward social mobility are very low for this group (Standing, 2014b: 166).

After World War II, wages and wage increases constituted the strongest “contract” between employers and employees. This led to stable conditions and a working class that accepted flexibility of employment conditions and global competition, because expectations of better pay could always counterbalance the disadvantages of work flexibilization (Rothkopf, 2009, 2012). Most political parties in Europe and the USA have accepted and worked for this social employee contract, thus reinforcing this development, which has also been supported by the middle class.

All members of today’s precariat are motivated by the dream of joining the salaried élite (Coates & Morrison, 2016: 23-59). The salaried élite are made up of people with secure, highly paid, permanent jobs. They continue to believe in the social contract between employer and employee. However, our point is simply that the salaried élite will also be crushed and decimated by the millstones of globalization (Standing, 2014b: 14-28).

The vagabond workers are low paid and often hired on contracts that favour the employer to the disadvantage of the worker. These contracts, which Standing (2014b: 165) calls ‘zero-hour contracts’, provide extremely high flexibility of the work situation for employers. In addition, the vagabond workers are often excluded from the social benefits that the salaried elite, the knowledge entrepreneurs and the underemployed have established.

The sub-research question we have examined in this section is: How does the precariat constitute an aspect of the Fourth Industrial Revolution?

After World War II and up to today we have witnessed a development that may be described thus: from jobs without education, to education without jobs. Previously, education provided a gateway to the middle class, whereas the situation today suggests something different. This situation may be summarized in the following statement: ‘Globalisation is making the middle class of the “old” industrialised nations poor, whereas in the world’s emerging industrialised nations, we are witnessing the opposite trend — the middle class is growing strongly.’