Dean Barber

Archive for July, 2017|Monthly archive page

The Future of Everything

In Corporate Site Selection and Economic Development on July 23, 2017 at 4:23 pm

For many of us, our last names reveal the work of our ancestors.

Common Anglo-Saxon names like Baker, Brewer, Butcher, Carpenter, Cooper, Mason, Miller, Sharp, Smith, and Tailor were all trade names, which required craft and expertise acquired over years and passed down through generations.

My last name is Barber. Back in the Middle Ages, Barbers did far more than haircutting. They also performed surgery, bloodletting and leeching, enemas, and teeth pulling, among a host of other things that would probably turn your stomach.  Gosh, I’m glad I didn’t live back then.

The Industrial Revolution wiped out these identities. And today, many of the factory and office jobs that replaced farming and craft trades are themselves disappearing.

We Don’t Know

Much of what I write about in this blog concerns the future of work. I will be the first to admit that while I ponder on the future, I don’t know, nor does anybody else, what lays in store.

I frequently joke that if I called myself a “futurist,” I could charge considerably more than I do now as a consultant for economic development organizations and companies on corporate site selection.

We all hope that the Digital Revolution, like the Industrial Revolution before it, will create as many jobs as it destroys. We sense that big changes are in the air and that dislocations are inevitable. Report after report, and this blog, say as much.

But will automation and artificial intelligence result in a fundamental rethinking of our relationship to work and to one another? How will we change?

The Predictions Differ

The World Economic Forum’s study into The Future of Jobs (2016) estimated that 65 percent of children entering primary school today will work in job types that don’t yet exist. 3.5 times as many jobs could be lost to disruptive labor market changes in the period 2015-2020 than are created.

The study saw job losses in routine white-collar office functions but gains in computing, mathematics, architecture, and engineering related fields.

Some believe that we could see 80 percent or more of current jobs disappearing in the next 20 years, whereas a McKinsey Global Institute report last year found that only 5 percent of jobs can be fully automated by adapting currently demonstrated technology, although for middle-skill categories this could rise to 20 percent.

A Complex Relationship

With all due respect to the World Economic Forum, McKinsey (a group I respect and often quote) and any and all of those who might hazard a guess on the future of work, history teaches us that it’s hard to predict how technological change will unfold.

The relationship between automation and employment is complex. When automation replaces human labor, it can also reduce cost and improve quality, which can increase demand and theoretically create new jobs.

Many assume that it’s going to be people or robots, all or nothing. I don’t quite see it that way. I tend to believe that advances in artificial intelligence will focus more on specific tasks rather than entire jobs. In that scenario, robots will mostly augment rather than replace humans. But what the hell do I know?

Four Futures of Work

Instead of obsessing on predictions, a group called Shift: The Commission on Work, Workers, and Technology, a joint project of New America and Bloomberg, took a different and I think more valuable approach. In its executive summary, the Commission opened with a line that will stick with me forever:

“The future of work is the future of everything.”

Convening more than 100 leaders from multiple sectors, including labor, civic, religious, academic, entrepreneurial, and more traditional business perspectives, the group was asked two basic questions:

(1) Will there be more or less work in the future? (2) Will work continue to be in its traditional form, full-time jobs, or separate into more “task” work (like short-term contracts, part-time gigs, or other alternative arrangements)?

The Commission distilled the common themes from these visions, some positive and some negative, and came up with four basic scenarios, four different futures of work. So what are these different futures? I quote from the Shift report.

Rock-Paper-Scissors Economy: Less work, mostly tasks.

“A community-based, local, and sustainable economy that prioritizes work in person to-person interactions. Advancing automation, in combination with a slowing of the overall economy due to rapidly aging population and a declining birth rate, leads to the elimination of many full-time jobs.

“Available work has been reconfigured to a task-based format; many people piece together their income — and, if they can, benefits — through a series of temporary gigs, identified by digital platforms and facilitated by smartphones.

“The winners are those who provide an experiential service based on a human interaction, activity, or skill, like cooking coaches, gardeners, and eldercare providers. Losers are those whose identities were so wed to a particular job that they opt out of the labor market instead of adapting.

“Of those open to entrepreneurial activities, many join the maker economy and produce organic goods in and for their neighborhoods; more people derive a sense of purpose from contributing to their families, their “contingent families” of friends, and their communities than from their jobs. Free time, once scarce in an economy that pushed people to work ever-harder to sustain high levels of consumerism, becomes a marker of status in an economy in which people work less.”

King of the Castle Economy: Less work, mostly jobs.

“A corporate-centered economy in which economic life is organized around large, profitable companies and those they employ. Increased automation keeps corporate productivity levels high but employment levels low, dampening consumer demand. This leads to less dynamism in the economy and decreased innovation overall as people become worried that leaving a full-time job means they won’t find a new one.

“Lower employment levels generate lower tax revenues and corporate philanthropies take over former city and state functions in the places they operate. Geographic and political tensions rise, and society splits into three clear social classes: those who work in high-tech jobs at large, profitable companies (and successfully defend their jobs, and generous benefit packages, from qualified outsiders); those who have full-time jobs protecting the people and assets in the corporate class, who struggle to assemble health-care and retirement benefits; and those who perform on-demand work when it’s available.”

Jump Rope Economy: More work, mostly tasks.

“A portfolio approach to work in which people build reputational rankings with each task they complete, combining multiple income streams to allow for a career that’s self-driven, entrepreneurial, and constantly changing. An aging workforce that stays engaged, combined with millennials seeking flexibility as they reach their peak parenting years and high consumer demand as a result of full employment, pushes the market into more discrete, task-based jobs.

“Technology assists in efficiently cataloging the different tasks that need doing and helps people develop and monetize their skills, which are always shared on social networks — every keystroke is public. The economy is buzzing, so people can be selective about what they do and can replace traditional corporate-provided benefits. As a result, most people do what they enjoy most of the time and are always on the lookout for the next opportunity.”

Go Economy: More work, mostly jobs.

“A technology-driven economy in which people embrace connectivity in every area of their lives and look for ways that machines can extend their capabilities through data-platforms, electronic devices, and virtual reality. Automation takes over almost all routine, data-processing jobs, freeing workers to focus on creative, strategic thinking.

“As people realize the ways in which AI can help them, they increasingly take risks in their jobs which results in more innovation. Benefits become progressively more generous over time, and eldercare becomes as standard a company benefit as childcare.

“Online retailers hire and train lots of warehouse robot monitors, lawyers take on many more cases as AI takes over the paperwork of discovery, and scientists and intellectuals use AI to file and monitor patent applications. Jobs multiply as new and novel platforms are invented on which to build new ideas.”

The Shaper of Cities and Regions

So there you have it, four different futures of work as envisioned by the Shift Commission. The group concluded that each could work out well for America, or poorly, depending on how we respond.

The commission found that most people want certainty more than making more money, more than doing work they feel is important and meaningful. They value stability of income, health care (Republican Party best be careful), retirement, and the other benefits we have come to expect.

Economic developers should take note that the future of work will shape cities and regions, and that the different futures might affect some areas in different ways than others.

It is very possible that I have provided you more questions than answers in this blog. Perhaps that is my aim.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Dallas. BBA helps companies and communities. Mr. Barber is available as a keynotes speaker and can be reached at dbarber@barberadvisors.com

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The Price of Prejudice Looms Large in Texas

In Corporate Site Selection and Economic Development on July 15, 2017 at 11:49 pm

Newton’s third law is: For every action, there is an equal and opposite reaction. This is a truism in the world of physics.

In the world of business and politics, for every action, there is a reaction, which may get loud, public and ugly. And so it is happening in Texas, where I live.

The Texas Legislature meets on Tuesday, in a 30-day special session called by Gov. Greg Abbott, who has laid out 20 issues that he wants state lawmakers to tackle. Included in the governor’s agenda is a North Carolina-style “bathroom bill,” which would limit which restrooms transgender people can use.

The “bathroom bill” failed to advance in the last regular session, which was marred by a shoving match and threatened gunplay. (In their infinite wisdom, legislators did pass a bill allowing feral hog hunting from hot-air balloons.)

A Full-Page AD

IBM, the tech giant that employs more than 10,000 people in Texas, is taking out full-page advertisements today (Sunday, July 16) in The Dallas Morning NewsSan Antonio Express-News and Austin American-Statesman opposing the legislation which the company says discriminates against transgender Texans.

“As one of the largest technology employers in Texas, IBM firmly opposes any measure that would harm the state’s LGBT+ community and make it difficult for businesses to attract and retain talented Texans,” reads the IBM ads. “We urge Gov. [Greg] Abbott and the state legislature to abandon any discriminatory legislation during this special session and ensure Texas remains a welcoming place to live and work.

“No one should face discrimination for being who they are.”

Tech Companies Take a Stand

IBM is not alone in its opposition. In May, other top leaders in tech companies with a presence in Texas sent a letter to Gov. Greg Abbott urging him not to pass discriminatory legislation.

In addition to IBM Chairman Ginni Rometty, the letter was signed by Facebook founder Mark Zuckerberg, Apple CEO Tim Cook, Amazon CEO Jeff Wilke, Microsoft Corp. President Brad Smith and Google CEO Sundar Pichai. The leaders of Dell Technologies, Hewlett Packard Enterprise, Cisco, Silicon Labs, Celanese Corp., GSD&M, Salesforce and Gearbox Software also signed the letter.

“As large employers in the state, we are gravely concerned that any such legislation would deeply tarnish Texas’ reputation as open and friendly to businesses and families,” the CEOs wrote in a letter dated May 27.

The Fallout Has Already Begun

A recently released report by Texas Competes, a coalition of nearly 1,300 employers and chambers of commerce, shows the “bathroom bill” debate generated $216 million in negative publicity for Texas from Jan. 10, 2016, through May 22, 2017.

“HR executives and business leaders voice concern to us when headlines about discrimination dominate the news about Texas,” said Jessica Shortall, managing director of the organization, in a statement. “We cannot maintain the pipeline of talent needed to fuel this state’s economy in the face of national coverage that tells young workers that Texas is in the business of discrimination.”

No Events For You

Both the NFL and NBA have put Texas on notice that the state will be overlooked for future big events if lawmakers pass the bathroom bill.

The American Association of Law Libraries said it can no longer host events in Texas, “due to recent moves by the Legislature to discriminate against LGBTQ people.” The event, which draws 3,000 attendees, has been held in San Antonio twice and is being held in Austin this week.

In a letter last week to Austin Mayor Steve Adler and Tom Noonan, president and CEO of the Austin Convention and Visitors Bureau, AALL President Ronald E. Wheeler Jr. wrote, “We cannot stand by as Texas enacts legislation that discriminates against this vulnerable community.”

The Chamber Speaks Up

Also last week, the Dallas Regional Chamber sent a letter to Abbott and Lt. Gov. Dan Patrick a letter expressing opposition to the legislation. Business leaders from North Texas plan to rally against the bathroom bill at the Capitol when the special session convenes.

“When the Texas Legislature reconvenes in Austin next week, we will continue to stand firm against any discriminatory legislation during this special session — and beyond — that could seriously hinder our ability to attract more companies, jobs, and talent to the Dallas Region,” stated the letter from Chamber President and CEO Dale Petroskey and board chairwoman Hilda Galvan.

Some of Texas’ biggest cities, including Dallas and Austin, have anti-discrimination ordinances that extend protections to transgender people in public spaces.

Billions at Stake

If the Texas bathroom bill became law, the reductions in travel and tourism activity would cost the state almost $3.3 billion per year as well as the loss of over 35,600 full-time jobs, according to the Perryman Group, an economic and financial analysis firm based in Waco.

In an April 24 report to the San Antonio Area Tourism Council, the Perryman Group also estimated annual losses of $176.4 million in state revenue and $84.3 million in local fiscal resources. Eventually, those numbers would grow, to $5.5 billion in gross product per year, almost 59,600 jobs, $295.2 million in annual lost state revenue and $141.1 million in foregone local fiscal resources.

A Pile of Manure

House Speaker Joe Straus, often credited with keeping the bill from becoming law in the last regular session, took a hard swipe last week at his fellow Republican leaders, comparing Gov. Abbott’s special-session agenda to a “pile of manure.”

Straus says Texas is sending the wrong message about its priorities with proposals such as the bathroom bill championed by Lt. Gov. Dan Patrick.

The World According to Patrick

Heavy on hot-button issues which appeal to his evangelical and tea party base, Patrick rejects any and all warnings about the potential cost to businesses, the economy and the Texas brand.

Last year, Patrick said he would not shop at Target after the retailer announced a policy to let customers use the bathroom that corresponds with their gender identity. Patrick criticized those boycotting North Carolina after it adopted a bathroom bill, writing in a Facebook post on April 24, 2016.

“I’m totally disgusted with the threats from sports teams, entertainers, and some major corporations who want to punish cities and states who want to keep men out of ladies rooms,” Patrick wrote. “The world has gone mad, and we must stand and fight.”

Straus is Disgusted

While Patrick is clearly an ideologue, House Speaker Straus is a traditional Texas Republican in that he is moderate and business-oriented. He has openly criticized fellow Republicans for focusing on a bathroom bill instead of putting more than a billion dollars into public schools.

Not only does Straus believe the bathroom bill is bad for business in Texas, but he also has moral objections.

Author Lawrence Wright wrote in The New Yorker that Straus told him about a senator coming to his office with a proposed compromise just before the bathroom bill collapsed in May.

“I’m not a lawyer, but I am a Texan,” said Straus, according to the magazine. “I’m disgusted by all this. Tell the lieutenant governor I don’t want the suicide of a single Texan on my hands.”

And Now My Take

Texas holds a special place in my heart. The Lone Star State means freedom, unending opportunity, personal liberty and a people who value hard work and enterprise.

Taking away freedom and liberty goes against the very promise of Texas, which is precisely why I choose to live here. As Sam Houston said long ago, “Texas has yet to learn submission to any oppression, come from what source it may.”

I think an editorial from the Houston Chronicle said it best, “No one should mess with Texas. Most especially, its politicians.”

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Dallas. BBA helps companies and communities. Mr. Barber is available as a keynotes speaker and can be reached at dbarber@barberadvisors.com

A Calm, Stable, Predictable World of Work is Not Happening

In Corporate Site Selection and Economic Development on July 9, 2017 at 2:29 pm

A world in flux, of great uncertainties, characterized by deep tectonic shifts in advanced economies, affecting the future of work. This is the world that we are living in.

We know that automation, robotics and artificial intelligence offer higher productivity, increased efficiencies, safety, convenience, and economic growth. But these digital technologies raise questions about how people will come out on the other end. Everyone will not go home with a prize.

Technology has been reshaping the workplace since the Industrial Revolution. In 1900, 41 percent of American workers were employed in agriculture, but by 2000, automated machinery had brought that number down to just 2 percent.

The difference today is the speed by which digital technologies are developing, which can disrupt jobs, skills, wages, and the nature and future of work. We might prefer a world of work that is calm, stable, and predictable but the reality is far from that, leaving many angry, confused and depressed.

I watched the angst play out this past week on television, images of mostly young protesters, identified as “anarchists” by some, battling it out with police at the G-20 Summit in Hamburg, Germany.

Without being there and wading into the crowd of an estimated 100,000 protesters to ask questions, I can only surmise that most blame governments, global institutions, corporations, and establishment “elites” around the world for causing or allowing their limited income-earning opportunities.

The very thought of having the G20, a small group meeting behind closed doors, making decisions that affect the entire world, provides plenty of fodder for the protesters. Many see capitalism itself as the main culprit.

And to some degree, I actually get that. Keep in mind that household incomes in advanced economies have been stagnating worldwide for decades, and there are increasing skill gaps among workers.

In the United States and the 15 core European Union countries (EU-15), there are 285 million adults who are not in the labor force—and at least 100 million of them would like to work more.

Collapse of the White, High-School-Educated Working Class

In this country, we are seeing a dramatic rise in “deaths of despair” from drugs, alcohol-related liver diseases and suicide among middle-aged, less educated whites who face tepid demand for their limited skills and stagnant wages.

I spoke last week to an economic developer, a friend, from Ohio whose community has been wracked by hundreds of opioid overdose deaths.

“This is real and we need to get a handle on this. We cannot ignore it,” he said.

A recent analysis by Princeton economists Anne Case and Angus Deaton paints a portrait of a gradual “collapse of the white, high-school-educated working class after its heyday in the early 1970s,” whose health, mental well-being, and attachment to the labor force have become successively worse for people born after 1945, they said.

In 2015, the two researchers discovered that death rates had been rising dramatically since 1999 among middle-aged, less educated white Americans, reversing decades of longer life expectancy.

By contrast, they found that the mortality rate has continued to decline for whites with college degrees, but also for blacks and Hispanics, who face many of the same income struggles as less educated whites.

So why a rising mortality of working-class white adults? It appears to be rooted both in worse job opportunities and increasing social dysfunction, following generations of relatively stable lives that involved job advancement and an expectation of living better than one’s parents, the researchers said.

“It seems to be about accumulating despair,” Ms. Case told the Wall Street Journal in March.

Wages aren’t rising with age now as much as they once did for high-school-educated white men, and the jobs available to them have changed with little upward mobility.

“The company man job has gone away for working-class people,” Mr. Deaton said.

A Corrosive Impact

Now, I realize that linking protesters at the G20 in Hamburg with decreased mortality among the high-school educated whites in America may be a stretch for many of you. It’s a bit of stretch for me as well.

But still I believe it so. A 2016 McKinsey Global Institute report, Poorer than their parents? Flat or falling incomes in advanced economies, finds that between 2005 and 2014, real incomes in 25 advanced economies were flat or fell for 65 to 70 percent of households, or more than 540 million people.

To suggest that the economic and social impact of that is corrosive is an understatement. We are seeing the ramifications play out in Hamburg and in Appalachia and virtually all points in between.

This is especially true in rural America, where opportunities are limited and where an embitterment has taken root against the federal government on the widespread belief that Washington has forgotten them. (I’ve seen this in countless communities and have written about it in past blogs.)

Yes, globalization has brought numerous benefits, including lifting millions of people in emerging economies into the consuming class (China in particular). But it also has eliminated millions of good-paying manufacturing jobs in this country, and make no mistake, we’re still reeling from it.

Men Not At Work

Curiously, many men have taken themselves out of the workforce, essentially given up on looking for work. Despite the low unemployment rates across much of the country, one in seven, (or 15 percent) of American men between the ages of 25 and 54 currently aren’t working—and this number has been on the rise for decades.

In a 2016 report, President Obama’s Council of Economic Advisers examined the declining labor-force participation rate and suggested that a drop-off in good jobs for low-skilled men was part of the explanation. The theory goes that these typically less educated men don’t find it worth their while to seek out bad jobs.

Employers Want Skills

What is clear is that having strong back and a good attitude is no longer enough. Employers want people with skills. A man with only a high school diploma is twice as likely to be out of work as a man who has a four-year college degree.

That is not to say that all young people should go to college and get a bachelor’s degree. People can get the needed skills through vocational training for a rewarding career, but only if it is offered, which is a sticking point in many, particularly rural places.

The lack of vocational training in many places only exacerbates the problem of men dropping out of the workforce. As I mentioned in my last blog, It’s Time to Appreciate Apprenticeships, I have been to community colleges in small towns where the only vocational classes being offered were in cosmetology.

Many experts disagree on what automation, artificial intelligence and machine learning will mean for the workforce, the economy and our quality of life. This much we do know, that for the first time, digital technologies could affect prospects for everyone in every demographic and skill level.

It will change how we work. The most pressing question is whether people will have the needed skills to perform the jobs that do remain.

Big Questions, Few Answers

Few “futurists” imagine a future with large, dependable employers that can help American workers secure income, health care, and retirement. That does not seem to be in the cards, which means the central role of employers needs a re-examination.

If large employers are no longer islands of security and stability (and they are not), what will replace them? Do we owe each other a pathway for a meaningful life of work?

These are big questions for society to grapple with that only now we are beginning to face. I am not certain what the world of work is going to look like in the future. (I have some ideas, as I believe the future of work will shape cities and regions.)

Predictions about the future of work is a fool’s game. We should remember John Kenneth Galbraith’s reminder that, “We have two classes of forecasters: Those who don’t know — and those who don’t know they don’t know.”

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a location advisory and economic development consulting firm based in Dallas. BBA helps companies and communities. Mr. Barber is available as a keynotes speaker and can be reached at dbarber@barberadvisors.com