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The Information Age Reverses the Industrial Age
Sleeping next to a snoring dog ensures better sleep.
So says evolutionary biologists who argue that for millennia, snoring dogs meant safety. If your dog was not worried, you didn’t have to be either. Meanwhile, the opposite is also true. If a dog is barking, even if it is down the street, it elevates our heart rates faster and higher than an alarm clock. This, too, is an evolutionary trick. If the dog is worried, we better be worried as well.
Today, however, no one wants a snoring dog in their bedroom. What changed?
The world we live in today is not how it has always been. In fact, the ways we live and work often run contrary to our evolutionary traits.
In our current Information Age, our models of work and community are changing. It is a fast, unnerving change for many, but maybe, just maybe, our lives are realigning with how we are designed to live.
This all sounds theoretical or nonsensical, so let’s get specific and start by looking at work.
A Brief History of Work
For thousands of years, entrepreneurship was the profession of most people. Small-scale farmers, blacksmiths and shop owners spent time outdoors, working hard, but on their own schedule. They collaborated with their family and nearby friends, or clan members in many cases.
Suddenly, things changed as the Industrial Revolution enabled massive collaboration with thousands of employees working on a single task. This revolution brought workers into dark, crowded factories with no natural light and a work schedule dictated by the blow of a whistle. People couldn’t cope.
In London, factory workers who grew up and had evolved as agrarian workers dealt with the dramatic change with gin. Lots of gin (see Hogarth’s painting of Gin Alley).
According to Clay Shirky, in his book Cognitive Surplus, gin carts filled the streets of London where depressed workers drank themselves into stupors because they were unable to adjust to their new lifestyle.
In the 18th century there was an epidemic of gin drinking in England. Rot-gut gin was destroying lives and families. Gin shops sold their product for one penny a pint. People died in vast numbers from cirrhosis of the liver. In London there were twice as many burials as baptisms. William Hogarth’s savage portrait of Gin Lane in 1751 stressed the terrible dissolution of the time: a house is falling down, a corpse is being put into a cart and a woman is so drunk that she is dropping her baby over a railing.
Over time, people did what they do best: they adjusted. We learned to live in close quarters and changed our lifestyles to fit the whistle. Soon, the education system was changed from an apprenticeship model to the straight rows and classroom bell that we know today. After all, if society needs factory workers, society also needed an education system that prepared them.
These changes served most people quite well through the 20th century. The firm grew larger and improved coordination led to huge achievements in production.
Now, however, the world is again changing. Businesses, often referred to as “the firm” in research (more on that later), are shrinking. Now we can collaborate with someone in our home community one day while working on a project with someone located on the other side of the world the next. Location independence means “firms” can be temporary. Many people now enjoy the ability to choose what to do, where to do it and when to do it. Stuffy factories (or offices) are increasingly a thing of the past.
The world now needs fewer workers and more thinkers. Instead of specializing in a specific skill, we now need polymaths, able to solve problems and collaborate with others depending on the project.
It is not hard to see the trend. Instead of waking up to punch in at work and doing the same task every day, the future offers a morning where we log in to see what tasks need to be done. We then choose what we want to work on and with whom we want to collaborate. Instead of the same group of people working together every day, we are a collection of individuals who come together as needed.
In a world when people have choice to work and live where they choose, bold ideas are required. Not every task will be fun or easy, but if there is a higher purpose or a grand vision, collaboration and innovation will follow.
This change is jarring, especially to those who grew up in the Industrial Age. We don’t see gin carts in the streets today, but we do see students leaving the education system to start their own businesses or people who have worked for years in a corporate setting wanting to leave and start their own project or business.
Our communities need to see and respond to this need. After all, if people can choose where to live and work, that means they can choose where not to live and work.
The Growth of the Firm
People are a business. A business doesn’t exist without its employees doing the work and helping it grow.
It may not seem like a novel concept, but it took until 1958 when Edith Penrose published The Theory of the Growth of the Firm for this idea to really take root. She separated the idea of “the firm”, or a business, from the people that made up that business and argued that myriad economic theories of the firm didn’t really explain how firms grew.
“All the evidence we have indicates that the growth of firms is connected with the attempts of a particular group of human beings to do something.” (Introduction, Theory of the Firm.)
Looking forward to the future of the Information Age thus requires us to think about people. Large businesses will surely exist, but throughout the Industrial Age, the point of joining a firm was to do something.
Now, we can do something without a traditional firm.
Growth for the sake of growth
As a business owner, I am accustomed to summarizing the success of my business at conferences with a simple statement: “We have a team of 10.”
It’s an archaic mindset, but it is common to equate size with success. The larger the company, the more successful it must be. The Information Age challenges business owners and individuals to think differently. If the goal of work is to “do something,” can we measure success by the outputs instead of the inputs needed (like number of employees)?
For many, this means completely cutting ties with a traditional firm. With the ability to connect and collaborate with anyone else with an internet connection, the input is transient. We can work one day with a virtual team of hundreds and the next day complete our own, individual project.
Similarly, if the goal is to do something, or to put it another way, create work that matters, we have more options as individuals. In the Industrial Age, resources were scarce and controlled. It would be difficult in the Industrial Age to solve communications challenges if you did not have access to the resources and talent at Bell Labs. If you wanted to improve transportation but didn’t have the patents and equipment of General Motors, it would be an uphill battle. The best talent in the world worked for some of the largest firms in the world and that’s it. There was little opportunity (or even legal right) to share and build side projects. Instead, they did what they were told and innovated within a firm.
As Penrose noted, innovation within a firm is limited.
Human resources required for the management of change are tied to the individual firm and so are internally scarce. Expansion requires the recruitment of more such resources. New recruits cannot become fully effective overnight. The growth process is, therefore, dynamically constrained. (NY Times.)
Growth in the Information Age
In the Information Age, collaboration is often easier outside of the firm than inside the firm. Ideas can be quickly shared and teams can form for a project and dissipate when the work is complete.
Entire products, such as the Linux operating system on a large scale and smartly designed power strips on the small scale, can be built collaboratively by people who never meet or even know one another. Yochai Benkler, a Harvard Law School professor, calls projects that create open source outputs and welcome participation with decentralized participant-driven modes of work “commons-based peer production”. (Benkler, Yochai (2006). The Wealth of Networks. Yale University Press. pp. 73–74. ISBN 978-0-300-11056-2.)
Benkler wrote, (and, of course, open-sourced), the book Wealth of Networks. In it, he highlighted two reasons peer production is better than a firm for creating work that matters (Benkler, Yochai; Nissenbaum, Helen (2006). “Commons-based Peer Production and Virtue”. The Journal of Political Philosophy. 4 (14): 394-419. Retrieved 22 October 2011.)
- Information gain: Peer production allows individuals to self-assign tasks that suit their own skills, expertise, and interests. Contributors can generate dynamic content that reflects the individual skills and the “variability of human creativity.”
- Great variability of human and information resources: leads to substantial increasing returns to scale to the number of people, and resources and projects that may be accomplished without need for a contract or other factor permitting the proper use of the resource for a project.
In essence, collaboration enables the greatest number of smart people to work together to solve problems. If the goal of the firm is to do something, peer production often does it better.
Firms are thus under intense competition from a nameless foe. As the other 60% of the world’s population begins using the Internet, there are more collaborators and more expertise. Given the choice of joining a hierarchical firm with strict rules on innovation or making the rules on one’s own, many will choose the latter.
There are some issues of efficiency in which the firm still reigns supreme, such as branding of a well-known firm or the ability to assign (or force) resources such as money and people to solve a specific problem. Most of these benefits, however, are under attack as peer models become commonplace and have an easier time raising money (often from peer-based funding platforms) and building a name for themselves. If AirBnB can “usurp the InterContinental Hotels Group and Hilton Worldwide as the world’s largest hotel chain — without owning a single hotel” as Fast Company noted, what firm is truly insulated from the shifts of the Information Age?
Not All Dinosaurs are Extinct
We learn as children that dinosaurs are extinct. I spent my childhood playing and reading all about these mysterious creatures. We forget, however, that when we look up, we see dinosaurs. Many of the birds in our skies are direct descendants from those lumbering beasts.
In the Information Age, not all dinosaurs will go extinct. A large number of people will probably choose to continue working for a firm. Some firms, like contractors, police officers and chiropractors, may be insulated from the changes due to geographic limitations or monopolistic markets. Many firms, however, are fast becoming dinosaurs. They are at a disadvantage in an age of collaboration. As peer-based models of work and production gain acceptance, the trend will only accelerate. This means big changes for employees and employers and should force us to rethink how to do work that matters.
How the Information Age Changes the Employee
Technical skills are the current belle of the ball. As America tries to compete internationally with other manufacturers and searches for ways to create jobs, technical educations are a natural solution. They immediately provide employable skills.
That model was perfect for the Industrial Age, when people needed to learn one task extremely well and be able to perform that task day in and day out. It is still important for communities who have a specific employer who needs employees to fill their cubicles, assembly lines and offices. The straight line from education to employment replenishes these firms with talent and keeps communities growing.
Learning a skill that guarantees a job feels secure, except that those jobs are under threat by the pace of change. The skills needed to “do something” are changing at an increasing pace.
This change is not an overnight phenomena that will suddenly destroy all technical jobs. Instead, continuous learning and multi-disciplinary learning is needed to keep up in the Information Age. Fortunately, learning has never been easier.
Thanks to technology, we have access to the entirety of the world’s knowledge in our pocket. Most of us use it to watch cat videos. Some, however, visit the Khan Academy, Code Academy or YouTube where they can learn the skills needed to do the work that they want to do.
For individuals who learn a skill like programming online, it is often easier to find their own job rather than finding a firm who will believe that they are qualified. Firms may not have the resources or ability to vet candidates with non-traditional education so they rely on diplomas to do the work for them. In the Information Age, more people will be learning skills on their own. It follows that many of these individuals will find work on their own as well.
Employee Freedom in the Information Age
An employee’s freedom is determined by their skills and their network.
Someone who has a single skill can still wake up in the morning and go to the firm and do great work. However, if the nature of the work changes due to automation, artificial intelligence, outsourcing or other shifts, they are no longer needed.
Someone who is a polymath and a self-directed learner, can acquire the skills they need to make the thing they want to build. They can look at the world and find problems that need to be solved or people who are looking for help in solving a problem. Then, they can apply or acquire the skills needed to make a difference.
For many workers, this is already their reality. They wake up in the morning and decide what they want to work on or who they want to work with. They search online or check their email and choose the project they are most interested in. It could be their own project or helping someone else. They take time off when they want, they switch locations when they want and they know that they will be compensated based on the problems they solve, not based on showing up.
We see this focus on problem solving at an annual event we host called Startup Weekend. Startup Weekends are held around the world, and it is a 54 hour competition to build a business. When the weekend starts, people who have an idea of what they want to build stand up and answer three quick questions:
- What is the problem you want to solve?
- What is your solution to the problem?
- Who do you need to help build your solution?
Employees increasingly ask themselves these three questions when deciding how to build something that matters. If the answer to number three is not a large firm, employees can strike out on their own and find whatever they need for number three. It may be that a project needs a designer for a day or a developer for a weekend. In a firm, someone who contributes one day a year would never be hired. In a peer-based model, a person can contribute one idea for one day and still be an essential part of the solution.
The challenge for an employee is finding these connections to help solve big problems. Thus, as Porter Gale says, your network is now your net worth.
A person who can find, connect and share ideas with a diverse group of people has a better chance of finding the skills and inspiration they need to create valuable work. Someone who is less connected has fewer opportunities.
A worker is best served by both increasing their knowledge and building a network of collaborators. Someone with a single skill will have a harder time building a network while a polymath can connect and help more people in different ways, growing their network and at the same time their net worth.
The network effect grows these efforts exponentially. As someone builds their network and collaborates with others to solve big problems, they have more opportunities to continue doing so.
Employers in the Information Age
Just as employees have increased opportunities as their network grows, employers have increased competition as the network grows.
In the traditional Industrial Age model, an employer based in a community without other firms has an advantage. Any workers who don’t want to or can’t move has to work for that employer. However, if in a community with multiple employers, the firm that treats a worker best will attract more employees. This forces all the firms to pay better salaries, offer better benefits and, hopefully, create better work.
In the Information Age, our community is everywhere. Our firms are competing with every firm everywhere. Some firms have the luxury of being insulated from the competition if what they do cannot be done remotely. Examples include local contractors, health facilities and gardeners. Most products and services, however, can just as easily be built and provided from anyone anywhere. This means a firm needs to provide incentive for an employee to not only to choose their firm over other firms, but to choose a firm over working for themselves.
The best way an employer can compete is to create work that matters in a model conducive to employees well-versed in the Information Age.
If employees do not feel that they are contributing to solving a bigger problem, they will search for a problem to solve and can easily find collaborators to help them do just that. As my brofounder, John Meyer says, “Want to keep Millennial employees? Show them the future and how they will help the company get there.”
Communities in the Information Age
Just as the workplace is quickly evolving, so too are communities.
If workers can choose where to work, they can just as easily choose where to live. Jobs are not the main attraction for residents, quality of life is. Businesses can no longer expect talent to come to them, they have to go to where the talent is (either virtually or by actually relocating). Communities can no longer depend on an employer bringing in new residents, instead a community has to work to attract residents.
These workers who choose where to work and live make up a part of what Richard Florida calls “the creative class,” people engaged in creative problem solving from artists, to high-tech manufacturers to entrepreneurs. The creativity extends beyond just tech workers and now includes talent in everything from manufacturing to finance. The Information Age demands innovative ideas across industry.
Over 1/3rd of Americans are a part of the creative class with the percentage rising dramatically, up from 24% just 25 years ago (Florida, 45).
The Rise of the Creative Class offers new opportunities for rural businesses and communities and new challenges for those stuck in the Industrial Age mindset. Communities that attract the creative class with diverse ideas, people and social offerings will thrive in the Information Age, regardless of size or location.
People don’t move for jobs. Jobs move for people.
A community with skilled citizens can attract businesses. Businesses that move for people are more likely to stay and invest in the community. After all, a vibrant community retains talent, so it is in the business’ interest to make the community great. The future plan for communities should be grassroots development focused on people and entrepreneurs. Communities can attract people and jobs will follow. A business can attract creative employees and work and collaboration will follow.
Diverse communities are creative communities.
New ideas and perspectives speed innovation and improve work.
Communities that embrace diversity will thrive and will be more interesting places to live. Businesses that promote gender equality and include workers with different backgrounds, are better, more profitable workplaces.
It’s not hard to make the connection. New ideas and perspectives force us to rethink how we live and work. The more we rethink, the more likely we come up with a better method.
People choose a community based on social offerings, openness and aesthetic.
People expect basic services wherever they go, but they move to a community based on its “soul.” Uniqueness, history, openness and wide-ranging amenities will retain and attract creative, diverse talent.
That is the result of a 2011 Gallup Organization and Knight Foundation study that interviewed nearly 43,000 people in twenty-six communities over three years. What it means is that throwing more money or more job opportunities at a person will not necessarily make them work for you or move to your community. Instead, corporate and community culture must be considered and prioritized. The person has to feel that they will belong and enjoy both their professional life as well as their personal life.
There’s a reason tech companies offer ridiculous benefits like free haircuts and laundry or why remote workers often choose to live in expensive, hip neighborhoods. As the work/life balance is blurred, people choose a positive living environment instead of just a work environment.
Create an environment that is welcoming and you will attract more creatives.
An Opportunity for Rural and Small
Most of the news we hear regarding technology and population trends feels like a death sentence for rural America and small business. The headlines shout that if you can’t keep up, you’ll be left behind.
Fortunately, the Information Age is changing business and community and provides an opportunity for rural communities and small businesses. The world’s talent is now available, regardless of location or size. The elements that make someone want to work with you are not simply monetary. They are based on openness and feeling like a part of the team or community.
Your business and community can create this environment, no matter the size or budget. Focus on attracting diverse, creative talent to take advantage of the trends changing the way we live and work.
Embrace the Information Age
Thanks to doors, locks and electronic security systems, we no longer have to rely on sleeping dogs to alert us to danger.
Most businesses, communities, employers and employees have forgotten how to live in a world of choice. We master one skill and and are perfectly trained for the Industrial Age.
But, the Industrial Age is over. We are now living in the Information Age.
We can cling to the past, or prepare for the future. For many, the revolutionary changes are a challenge.
For this new era, gin, however, is not needed. By focusing on attracting customers, employees and residents with work that matters, anyone can thrive.
The future is all about doing something, creating work that matters. There are big problems that need solving. Now, you are the one called to solve them.
Thanks for reading our article on the future of work. We write about big ideas in business and work, including how to hire and motivate Millennials and more tactical articles on how to best use digital marketing.
Photo: Sara y Tzunki