– Benefits are distributed, and still very generous for all
– Technology talent opportunities won’t reach a saturation point
– The highest value gains from technology services are yet to come
From Fixed Asset To Growing Equity
Traditional labor economics (in practice, if not in theory) treated labor like any other fixed asset: Fully depreciable over a fixed period of time, expected to yield diminishing returns—and like all fixed assets—something that could be disposed of at nominal junk value. Labor economics also assigned an unscientific book value to this resource that became a strong determinant of its future market value.
In retrospect, this encouraged tunnel-vision, operational thinking, conformity, and treating creativity as a form of altruistic expression. For jobseekers—particularly highly skilled and ambitious jobseekers who sought work in delivering IT transformation, advisory services and the like, this was a prison sentence their potential had no choice to serve.
Enter the age of the Talent Economy
Towards the second half of the 20th century, services started consistently outperforming manufacturing in terms of profitability, and investors started to notice. How could a firm with no oil (or any natural resources), little to no land, and a miniscule workforce—overtake established giants in energy, financial services and infrastructure? But it happened. And continues to happen. This gave a boost to healthy market competition, and consumers—emboldened by the new power of choice—responded positively. Human creativity, resourcefulness and skills were finally given the dollar premium they deserved.
Thanks to this recognition of human talent as an appreciable asset, with an assignable value, a new class of technocratic elite came into the spotlight.
The talent economy was formally born
What If The Talent Economy Is Just A New Monopoly In Disguise?
In the aftermath of the dotcom bubble, and Silicon Valley making headlines for all the wrong reasons, it’s easy to understand why the talent economy gets so much bad press: Detractors mainly argue on three points:
1- The Talent Economy is widening the income equality gap
2- Automation and Industry 4.0 will saturate demand for talent
3- The best is behind us.
Widening Income Inequality:
Let’s start with the first: It is true, skilled professionals will earn more than the unskilled. Tax structures will be redesigned to favor top talent, allowing such individuals to keep more of their earned income. And the unskilled will carry a disproportionate burden of the income safety net. Why is this good news?
We’re living in an age where basic skill acquisition is free, and where it’s the application of the skill that earns individuals a premium. In other words, investing in themselves is quantifiably the most profitable, risk-free financial decision human beings can make today. What’s stopping them?
Skills are also mobile. Unlike sculpting or music, which require considerably larger investments of time, innate gifts and physical commitment, responding to the demand curve of the talent economy requires none of the above. From entry level java developer jobs to those seeking amazon web services jobs, the talent economy literally has room for everyone ready to learn and work, anywhere in the world.
But will this crowd out the technology job market?
Some dissent focuses on how organizations will be at the mercy of a small, technological elite—who will drive their own value at the expense of the organization. In other words—a new kind of monopoly. Not true. The kind of technological skills needed in the talent economy have a low shelf-life, so a monopoly, if any, will be short-lived. According to The Digital Talent Gap, 29% of respondents believed their skillset would be redundant in less than 3 years.
Arthur Lawrence has been in the middle of this monopoly-breaking action: Less than 5 years ago, coding was king, and IT consultants with even basic development skills were very much in demand. Now, our clients demand blockchain analysts, and technology consulting assignments have started to include IoT projects.
In other words, the gains from IT transformation are economically distributed, and generous to all stakeholders. Perfect competition may be achievable at last.
Talent Saturation Point
In his article of the same name, Bernard Marr makes several important points on why ‘data is not the new oil.’ Revisited, these points apply as much to our approach to human potential.
#1 “Oil is finite, data is infinitely durable and reusable…and hoarding them will reduce their usefulness…. Data – particularly Big Data – also has far more variety than oil.”: Machines are finite, human ideas are infinitely durable and reusable.
#2 “Data can be replicated indefinitely and moved around the world”: As can human output
#3: “Data becomes more useful the more it is used…Once processed, data often reveals further applications”: The evolution of business intelligence into business analytics is a case in point. When standard business reports were ushered into the era or query drill-down (OLAP), naysayers saw it as the end of management information systems. But the opposite happened: to close the chasm between IT strategy services and business requirements, the demand for both– IT professionals with sound management training, and traditional management consulting service providers with a strong grasp of technology concepts grew.
We have seen this firsthand in Arthur Lawrence’s data science consulting and big data projects as well, where predictive modelling and optimization assignments have created—rather than eliminated—opportunities for statisticians and other ‘traditional’ experts.
Is The Best Behind Us?
Digital disruption does not mean jobs will disappear, or that machines will replace the human workforce in its entirety.
As one expert put it, “Jobs are not disappearing, tasks are.”
The compression of menial human work into autonomous, self-driven machine work actually means markets are ready to absorb skillsets which currently don’t exist or are in short supply, digital skills taking the front seat.
The global average reporting of digital skill shortage is 55%, with 70% of respondent organizations in USA citing a widening talent gap. Even for “hard” digital skills, like cybersecurity and cloud computing, the demand-supply gap is at least 25% per skill.
Unaddressed, talent shortage could reach $8.452 trillion in unrealized annual revenue by 2030 worldwide, of which $1.748 trillion would be in the US alone. Automation and data-centricity, therefore bring good tidings for organizations and the people who make them.
Much is to be said of how businesses can unlock the full potential of their people. It does help, however, to treat skills as a self-perpetuating starting point for more to come. The talent economy is an acknowledgement of the abundance of human possibility. Our responsibility lies in identifying ways to make its universal accessibility a reality.