Displacement and Globalization

From the dawn of human civilization the dominant “organizing principle” for everything done that is considered of value is the production of something to be consumed, traded, or sold. The definition of what is worthy work, the merit of an individual doing such work, and the potential for an organization to focus the efforts of many to accomplish great deeds are based on producing something deemed of value as the outcome. However, the underlying theme of the Industrial Age is the displacement of people from paid work by technology. From the time of the Luddite uprisings nearly two hundred years ago to last decade’s Unabomber, Ted Kaczynski, and his manifesto entitled, Industrial Society and Its Future and The Culture of Fear as described by Barry Glassner in his book by that title, recent history is replete with examples of worker displacement and its negative consequences on the self-image and self-worth of the individual in modern society.

In keeping with this primary theme, a stream of profound developments over the past 40 years and continuing into the foreseeable future, information and communication technologies are challenging conventional wisdom about what constitutes paid work in a global economy, how such work is packaged, and who has the opportunity to do it. The first wave of work redefinition and reductions-in-force occurred in the 1980’s as data collection became automated. As this was concluding, the stage was already set for the second wave of redefinition and reductions beginning in the late 1990’s and early this decade. This wave was fueled by the advent of the PC and its distributed information-generating capabilities in a globally networked environment.

Even now, the foundation for the third wave of redefinition and reduction is rapidly coming into place. Pushing this wave forward are irresistible, knowledge-building forces driving technologies to integrate so effectively and efficiently that their collective capacity and capability equal or exceed human performance—a point termed human equivalence. Regardless of when, exactly, this point arrives, as it nears people will be relieved of a significant amount of work associated with making things. As a result, nothing short of a sea change is impacting almost every dimension of human existence marking the final chapter of the Industrial Age.

Accompanying this climatic conclusion of the Industrial Age is the birth of the Knowledge Era wherein the value of human effort is no longer pegged to productive output. A new economy is emerging that establishes responsiveness, flexibility, and creativity in relationships between and among people as the metric around which human endeavor is determined, measured, and compensated. Whether termed the relationship economy, as proposed by Bruce Morgan in his book, Strategy and Enterprise Value in the Relationship Economy, or the support economy as suggested by Shoshana Zuboff and James Maxmin in their book, The Support Economy: Why Corporations Are Failing Individuals and the Next Episode of Capitalism, clearly we are in the midst of dramatic change.

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Globalization is a natural outcome of second wave progress. Enterprises invest as quickly and deeply as they can in those technologies that improve performance in consistent, timely deliveries of quality, reliable products and services. Still, due to inadequacies or cost that precludes existing technology as the solution, inefficiencies persist in the production environment requiring people to do paid work in order to bridge. Increasingly, this remaining paid work is outsourced to the lowest cost labor provider wherever in the world those labor sources might reside. As technology continues to evolve and is adopted, a more favorable cost-benefit scenario is established that insources work —but without the people. As the diagram above suggests, the relationship between technology adoption work flow is akin to an infinity symbol, as technology goes in, work is outsourced and the number of people doing paid work is reduced, more technology goes in and the same work that was previously outsourced is insourced, but with much less paid work required.

This cycle is repeated over and over in quicker loops as technology gets faster, smaller, more integrated— and more human-like. The globalizing labor force promotes top-down behavior. From the macro economics view, value chains drive cheap labor and automation. The net result is profit for companies and readily available goods for the individual. The increasing displacement is driving a bottom-up phenomenon. From the micro-economic view people are ill equipped to adapt to the increasing rate-of-change.

The transition from an Industrial Age drawing to a close to a Knowledge Era rising from the ashes affects every aspect of our lives. Despite the harsh realities posed by displacement and globalization, this trend hastens the advent of a new economy based on relationships of people to each other rather than things. These relationships are the building blocks for healthy communities and successful families. There is a lot to look forward to!

Originally posted to New Media Explorer by Steve Bosserman on Friday, August 26, 2005 and updated on Saturday, September 24, 2005.