The Workplace of the Future

The Fourth Industrial Revolution, the Precariat and the Death of Hierarchies

Jon-Arild Johannessen

• Publisher: Routledge
• Year: 2018
• ISBN:
  9780429805349
• Edition: 1
• Topic: Volkswirtschaftslehre
• Subtopic: Wirtschaftsbedingungen

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.

1 The workplace of the future

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.¹

Robots,² artificial intelligence and informats³ 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.⁴

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 nano-robots and other disabled people will experience improvements. According to Ross (2016: 42), robotization is a global net benefit.⁵

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 ⁶ (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.

Figure 1.1 A typology of working life in the future.

The precariat

Description

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, 2015b).

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 (2014a: 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 we...