We're talking to Gary Bolles as part of an upcoming report we're producing with Callaghan Innovation on New Zealanders' attitudes towards entrepreneurialism and business failure and we'd love to hear from you. Please fill out our short survey here. It will take five minutes tops, and you'll be in the draw to win one of two Tissot T-Race Touch watches in green and orange (RRP $995)!
The presentation you're giving at Project Connect next week and at the Callaghan Innovation events in Wellington and Christchurch is called ‘How to Thrive in Disruptive Times’. To cut right to the chase, how does one survive in the midst of all this disruption?
If I could predict the future I would have already retired to my own small island. But I first came to Silicon Valley 30 years ago and that longevity has given me the opportunity to see a number of cycles in the way that technology has infused itself into our society, our lives and our businesses. So I think that there's no question that the pace of change is accelerating, but some of the basics that we rely on as to how we continue to adapt to the various changes are fairly consistent. So I didn't have a crystal ball, but I do have some thoughts as to some of the ways that we have been able to not only survive disruptive change but to thrive, as individuals, as small businesses and as large businesses, and as governments.
I'm actually in Boston working with Singularity University on an event that focuses on the future of manufacturing and a variety of speakers have been to New Zealand before and their premise, which I believe, is that we're in an era of exponential change, so what's different now is that the confluence of automation and globalisation, the way that technology is so rapidly changing, that new technologies are being developed and brought to market, and the reduced friction in globalisation and the ability to find markets across borders and that pace absolutely accelerating and is only going to accelerate faster.
So what does that mean, both for individuals trying to make a living and for companies trying to either establish themselves or survive changing waters?
Let's start at the individual level. I started out as a career counselor when I was 19, I worked in the family business – my father writes job-hunting books. What I learned was a number of takeaways. The first was that when individuals go through an inflection point in their life – especially when it comes to their jobs or their careers – the best possible way they can be equipped to adapt to a career change is a self inventory, a process of understanding more about what makes you unique, what are the skills, talents, interests, personality traits, and so on that if you had perfect knowledge of yourself and the situation in which you'd thrive, you'd be much better prepared to be able to navigate any change because you'd be able to recognise and create opportunities because you'd be equipped with a greater understanding of how you'd be effective. Unfortunately, often our school systems, the ways we train people, we don't prepare people for this self-inventory and we send people out into these inflection points without that understanding.
So the first is understanding what makes you unique and what skills you have that you love using. The second is understanding the types of situations and environments in which that unique set of skills and interests would be best applied. What are the places where you'd match up with opportunities? The Silicon Valley label for this is 'optimisation' – what are you optimised for? Where would you be most effective?
The third is the how, the mechanics of finding or creating that opportunity. In the past, the typical approach to employment, especially in a large employer, a long-term employer would provide you a job for decades so a lot of the mechanics of finding or creating your own work opportunities was not as necessary, you don't need to be quite as proactive.
The way that our economy is changing simply ramps up the need to be much more adaptive, to understand your skills better to be able to figure opportunities to use those skills and to be much more entrepreneurial and proactive in searching more and creating work than you did in the past
But in this new era, where in the United States 42% of Americans now characterise themselves as at least part-time free agents, as people that are doing independent work for part of their work portfolio, which is projected to hit 50% over the next five years, which is a breathtaking change. So people have to become much more entrepreneurial, so the way that our economy is changing simply ramps up the need to be much more adaptive, to understand your skills better to be able to figure opportunities to use those skills and to be much more entrepreneurial and proactive in searching more and creating work than you did in the past.
What’s the biggest force driving that change? Is it automation? The gig economy? The GFC?
There's a variety of different drivers and together they're undeniable. The first is that, especially with larger employees, the implicit contract between an employer and an individual, which used to imply that you would have a long-term job, has eroded. Fewer and fewer large businesses feel they have the obligation to maintain that relationship.
The other is that increasing automation allows businesses to make much more flexible decisions about how and where work is accomplished. Automation and globalisation work hand-in-hand, one without the other wouldn't make anywhere near as profound an impact as they do together. The fact that an employer can decide that a certain kind of work should be done in one geographical location versus another, it's automation that reduces the friction in being able to do that and increases the capability that allows people to be able to collaborate across borders and therefore change the calculus that a company goes through when it tries to determine what kind of labour it needs and where it needs that labour.
It's automation that reduces the friction in being able to do that and increases the capability that allows people to be able to collaborate across borders and therefore change the calculus that a company goes through when it tries to determine what kind of labour it needs and where it needs that labour.
Another really substantial influence is that during the great recession, employers gained a significant amount of leeway in how they could decide the skillset that was needed for a particular kind of work and the way they would compensate for it. At least in the US, there was a significant increase in unemployment and as businesses started to hire back up they were able to hire at a substantial discount to the compensation they paid before. From 2008-2014, the average job in the US, the compensation was about 15% less than before. And that's a breathtaking drop and has contributed to some of the perception that many in the middle class are making less than their parents did.
And all of these factors, married with the significant shift that technological platforms bring and the way they allow the need and the worker who is meeting the need, the ways in which those platforms work to enable workers to find work also have a pretty significant impact in terms of the compensation of workers. The inevitable result is wage compression. When you get two independent workers each competing to do a task for a lower price, the result in aggregate is that a larger number of people are making less money. Now, that's better for some of those workers than not having any income, so there's certainly a net benefit for the unemployed but it's not a net benefit for workers with higher skillsets who are only able to find work in the gig economy. That may be good for bridging the gap between job but it’s not, in many cases, providing a living wage.