By Harvard Business Review
Jobs in retail, transportation, manufacturing, and agriculture are highly vulnerable to technological change.
Retailers such as Macy’s and The Limited are closing hundreds of stores and cutting tens of thousands of jobs as people buy more and more products online, and others are testing robotic assistants or planning for autonomous stores. Over 33 companies are now working on autonomous vehicles, which will soon replace transport jobs. Robots have probably taken about 85% of the 5 million manufacturing jobs that have disappeared from the United States since 2000. Automated farming is also quickly advancing.
While our first instinct might be to help employees find new jobs, what we really need to do is help companies shift into new markets focused on human services and adopt new business models that will allow employees, customers, and communities to benefit from technological change.
First, companies, especially those with big brick-and-mortar stores that are being pinched by online retail, can turn their strategically located buildings into stores that benefit communities. This is already beginning to happen. For example, Walmart now offers optometry services, beauty salons, and restaurants. But why stop there? Why not also offer classes in yoga, fitness, cooking, nutrition, or well-being at an affordable price? Or child care, elder care, psychological services, rehabilitation, or meeting space for community groups? This would create new sources of revenue, improve communities, and offer new jobs and skill sets to employees who used to ring cash registers, stock shelves, or mop floors.
Another way to redefine the terms of the automation debate is to provide stock to employees, something many of the world’s most innovative companies already do. This practice helps companies recruit and incentivize workers. It also offers a buffer against the downsides of technological unemployment for employees.
Many people think stock only works with entrepreneurs and tech industry workers. However, a number of companies in the food industry, including Chobani and Starbucks, are leading the way in proving this model can work with factory and retail workers. In 2016 Hamdi Ulukaya, founder of Chobani, decided to give 10% of his yogurt company in stock to his 2,000 employees. He likely made several of them millionaires, and the rest received stock options worth about $150,000 each — a great deal of money for factory workers in Idaho and central New York, where the average cost of a home is $153,600 and $85,800, respectively. While this kind of approach helps employees prepare for technological unemployment by simply transferring more wealth to them and increasing their economic security, it is particularly valuable if a company plans to automate its jobs.
If an employee holds stock in a company, and is replaced by a robot, they may actually benefit from the robot taking their job and doing it better, since their stock’s value will increase as the company becomes more successful. Imagine if Uber gave out stock to its drivers today — several years from now, if Uber becomes a successful autonomous car company, its former drivers would gain financially. Stock options allow workers the possibility of becoming future owners and beneficiaries of the robots that replace them.
Some of the most innovative companies today are using technology to create win-win business models that allow their customers to generate income. For example, Tesla plans to let its customers to rent out their vehicles to pay off car loans and earn extra cash. Similarly, homeowners who have bought solar tiles will be able to sell energy back to power grids for additional income once they pay off their loans, which can take from eight to 11 years.
ReGen Villages, known as the “Tesla of Eco-Villages” is planning to apply this same model to village communities, where residents will employ technology to grow their own food and produce their own energy and water, and can sell excess goods to help pay off their original housing loans or generate additional income. ReGen is building its first village in the Netherlands, with plans to expand across northern Europe and the world.
As these business models scale and go mainstream, they will help create an economy that generates a bigger pie for everyone.
This transition won’t be easy, of course. Company leaders will need to invest time and money in studying their industries and how they will be impacted by technology. This includes not just understanding how competitors might use new technologies to create competing products and services more efficiently at lower cost but also exploring new business models and corporate models. While past business models succeeded by extracting value from employees and customers, future business models will succeed by partnering with employees and customers to create new wealth together.
In addition to traditional companies, we need those building the innovation economy to step up. For example, the growing ecosystem of incubators, accelerators, universities, institutions, investors, and others who support the startup ecosystem need to reach out to some of the more traditional players — such as the Teamsters, United Farm Workers, other labor unions, and big-box stores — and bring them along. Shouldn’t the next autonomous truck company be cofounded by technologists and truck drivers? Shouldn’t next-generation autonomous farms be cofounded by technologists and farmers?
Many argue that the workers, many of whom don’t have college educations and have worked in repetitive jobs for their entire lives, will have a hard time transitioning to the innovation economy. That isn’t true.
In Werner Herzog’s 2016 film Lo and Behold, Reveries of the Connected World, Stanford professor Sebastian Thrun shared that when he opened up the enrollment of a computer science class on programming self-driving cars, the top 412 grades went to non-Stanford students — a startling fact echoed by many other technical MOOCs. While universities are very important in educating and training future entrepreneurs (and I am not advocating for entrepreneurs not attending college), we must realize that there are potentially millions of underemployed people who could make the leap if the right doors opened.
There is also evidence that people who work repetitive jobs can make the transition to jobs that require completely different skill sets. For example, the nonprofit Truckers Against Trafficking engages those in the trucking industry in social entrepreneurship to help end human trafficking. Green for All and DreamCorps have helped some of America’s most vulnerable people transition into cutting-edge jobs in solar technology and coding, respectively. The Prison Entrepreneurship Program helps prisoners create business plans and relationships with business leaders, so that they can work as entrepreneurs once they leave prison. The leaders of these initiatives saw no limits to human potential and worked to create the uncommon partnerships and alliances necessary to help people succeed.
As we add more technology to our lives, we must continue to invest as much, if not more, in our human potential. It’s only our imagination about what we can do that is holding us back.
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