As artificial intelligence and social robotics begin to replace tasks and jobs originally held by highly-trained humans we are entering the uncharted waters of the fourth industrial revolution, or “second machine age”. The new machines are very much unlike their predecessors because of they are able to learn. They can thus evolve over time to become better and increase their performance. Optimists suggest that by taking over cognitive but labour-intensive chores the intelligent machines will free human workers to do more “creative” tasks; and by working side by side with us they will boost our imagination to achieve more, using their power for detail, ability to rapidly analyse massive data, and lack of psychological bias. Pessimists point to job losses, unemployment, and social unrest. But what is often missing from the current debate are the social and economic roles of companies as employers. How will automation affect the organization, and indeed the nature of the company in the 21 century?
The massive urbanization that resulted during the first industrial revolution destroyed the social fabric of the European countryside that was weaved around village communities over many centuries. With time, companies replaced those lost social institutions of the past; they became something a lot greater than the mere organization of labour, capital, machines and know-how. People would work for the same employer over many generations. Worker unions and associations evolved to provide workers and their families with a stake and a voice in the future of the company. And governments passed labour laws that aimed to protect the new economic, as well as social, contract between employer and employee. The advent of the assembly line in the late 19 and early 20 century extended this trend even further. In this “second” industrial revolution the company was the rational way to organize production in order to maximize resource. Work was organized around jobs that were made up of a variety of tasks. The manager was invented. Jobs became careers. Workers expected to spend most, if not all, their working life with a single employer, slowly climbing up the “corporate ladder” and then enjoying a secure retirement and a pension.
This model for work changed with computers and the Internet. As the world became wired and the economy globalized we witnessed the “nikefication” of companies and jobs. Companies could now deconstruct their operations and relocate them to geographies that allowed them to benefit from low labour costs or other tax benefits. The “third industrial revolution” disrupted the traditional relationship between employer and employee. As companies moved manufacturing offshore local communities that relied on generational employment were hit hard. An example of this devastation is Detroit. As car manufacturers moved production out of the city Detroit’s population fell from a high of 1,850,000 in 1950 to 700,000 in 2013. The current presidential race in the US - as well as the result of the EU referendum in the UK – is very much framed by the social and political reverberations of companies moving jobs abroad. And regardless of what populist politicians promise, things will not, and cannot, go back to the “way they were”. If anything, we are fast moving towards a future where companies will mutate into something completely different.
Companies are already changing. Instead of employers they are becoming the nexus of contracts. We have entered the era of “uberization”, where digital platforms allow buyers and sellers to transact like never before. Companies are now becoming these platforms, providing the technology and security necessary to facilitate transactions. At the same time, work is disaggregating into activities that allow the implementation of talent-on-demand strategies. It is nowadays very rare to find an experienced professional who has been in a single company for most of their working lives. According to the Bureau of Labor Statistics the average worker currently holds ten different jobs before the age of forty. The Bureau projects that people will hold a dozen or more in the future. A more reasonable projection is that most people will increasingly not have any full-time job, but work as free agents for most of their working lives. Machine intelligence will require the successful knowledge workers of the future to upskill their game in order to remain competitive. Research also shows that professions requiring human communication are likely to remain in the realm of human rather than machine workers.
Perhaps the most profound change of the fourth industrial revolution will come from the transformation of companies, as they cease to be social institutions and become virtual digital platforms. With the employer-employee relationship becoming a relic of the past humans will need to discover new ways to collaborate and organize their productive output. We may see a counter-urbanization movement unfolding, as contract work by remote replaces the daily commute to a city centre office; or new forms of economic organization around a shared economy that by-passes the traditional banking and financial systems. One thing is for certain: as the 21 century advances nothing will remain business-as-usual.