March 2022 – Curious about change

Commercialisation of earnings?

It’s a horrible phrase so I’ll try to explain the thinking. I started the above diagram about 6-7 years ago and I’ve been adding to it ever since (and it’s nowhere near complete as it will continue to grow and change. It represents three shifts which are occurring at the same time, and which the Covid appetite for freedom has really accelerated, although these are not new.

Firstly, there has been a desire for more work-life balance for years (I’m tempted to say decades) with people looking for ways to make their day less structured and prescribed. That’s the ovals here – with the outside the least structured, ie you can do the activity whenever you like (and in many cases it doesn’t take that long!).

Secondly, and I think this is at the heart of the revolution I’m seeing is the shift towards bringing in money in new and differing ways. If the industrial revolution was about what work we were doing, this revolution is about how we, as individuals, finance the cost of living. So I’ve identified (thus far at least) 4 buckets of activity which people are using to bring in money. The first is employment – that’s pretty familiar to most although it too is changing. The second is talent leverage – that’s where the familiar concept of entrepreneurs sits – people who use their own talents to create a business. But it is now so much more. The third is asset leverage – think Uber or Airbnb or Ebay. Making money from things that you items that you have and you either no longer want/need or you are underusing. The fourth is investment – which again is not new, but how it is being done today, and who is doing it has changed hugely.

The third shift is that increasingly a portfolio income – made up of several of these at any one is becoming more common, and has been enabled by the ability to many of these in what used to be ‘leisure time’, or at least without them consuming the whole day. And this fits neatly into what Lynda Gratton and Andrew Smith in their book/site 100 year life suggests – that we need to think about work in a completely different way. Not a single career, but something which flexes with our point in life, and the life style we want and can afford. Employment has usually in the past been seen as secure – and that will be key for parts of our life. Freedom to travel, to develop and explore is much more of a characteristic of those in their late teens, twenties and increasingly healthy 60’s-80’s. There is so much scope here for choice.

Which brings me onto the big driver for all of this – connected technology. Those labels in brown are those which are only possible at scale through connective technology – internet and mobile to date but with more to come. And the caveat remains that this is not available to all – the key will be making those choices available across society as a whole, not just those with the relevant financial cushion.

Commercialisation of earnings power

So when I refer to commercialization of earnings power, what do I mean exactly – well looking back to the industrial revolution, that was done by the employer – individuals went to work but the terms on which that work was rewarded was set by the employer. Although with the advent of unions, regulation and employment laws that balance had shifted somewhat, the basic tenet that employers set the nature of the commercialization (especially how work was done, where, when and for what price) had not really changed.

The exception was to some extent self-employment – but here again market expectations and regulation of many trades, professions or activities meant that the individual had limited control over the commercialization of their time and activity. Enter technology and now suddenly all kinds of activities (many of them closer to ‘fun’ and certainly well removed from employment) become the basis of commercialization – trading on eBay, renting out on Airbnb, esports, vlogging. In every case a platform has enabled the activity without (in many cases) setting the terms of ‘employment’. The net result is that many individuals are discovering that they can commercialise their own earnings power. And that sense of freedom is not just about money or income – it’s also about how and when ‘work’ gets done.

Now this is not all sunshine – those platforms which dictate terms to their users eg Uber (akin to the old employment status, irrespective of whether the law deems them to be employers) are not offering the same degree of commercial freedom. But the areas where personal commercialization is feasible are growing all the time. Fancy yourself as an investor – check out the crowdfunding platforms. Want to build your gaming expertise? Enrol on an esports degree course.

So what’s the big driver for this growth in technologically driven opportunities? Well essentially its that sense of freedom and being able to choose what, how and when you do earn. And before Covid, the opportunity for people to look at all of this and engage was limited for the majority – who commuted or were at least office bound during the working week. All of these opportunities felt like hobbies or things to be slotted in when other commitments had been dealt with. What Covid did was highlight the opportunity for freedom – and make the prospect much more attractive.

The world of work

100,000s leaving their existing work to seize new opportunities, moving from long established homes to fresh and different surroundings, abandoning traditional support networks and employment, leveraging new technologies and infrastructure. Ok, so this is another post on the Great Resignation – right?

Well, no actually – all of these things were equally true about the great migration to the industrial mill towns in the nineteenth century. The start of the industrial revolution looked, in many ways, remarkably similar to today – albeit the drivers were a little more desperate. But it’s worth thinking about the parallels because it took (if you start with the population moves and reckon that the rise of the welfare state and the origin of the NHS are somewhere towards the end) well over 100 years for all the ramifications to work through. Those years saw:

Massive technology introductions, most of which were unimaginable in their final impact when first seen – canals, trains, electricity, cars
Societal upheaval from a primarily rural economy to a global industrially based empire with education, household size and composition, democratic engagement and worker organization all changing along side
Huge inequality resulting – from the Carnegies to the poorest chimney sweeps boy, with attempts to redress this covering everything from the philanthropy of Saltaire or New Lanark to workhouses
Above all, the rise of globalization and the international connectivity of trade, politics and it seems, almost inevitably, war

With hindsight, we now recognize this as the industrial revolution. So what, if we think of today’s context, might posterity recognize as beginning today? I would argue it is the commercialization of earning power – an ugly phrase admittedly, but like the world in 1800, we have no experience of what’s coming, and hence limited language to match it.

The Great Resignation or the Great Reset?

This absolutely hit the mark for me – resonates with so much I’ve seen, heard and read and I agree with the findings. But, I think there is something else going on here which Coivd-19 has accelerated hugely. About 7 years ago I did a presentation to a group of senior HR executives at one of their annual events and mentioned that “employees are consumers – just wearing a different hat’. What I went onto say was that in the mobile era, consumers had (in reality in some cases and in perception in others) taken much more control of what and how they buy – online, via apps like Instagram, through influencers, by click & collect – the changes are endless and have only continued since that talk. But the underlying shift is essentially a move of the power towards the individual consumer and away from providers and sellers.

So much has been written about the massive numbers of people thinking about or indeed quitting their jobs. But there is less consensus and less debate on the drivers for it – frequently it’s narrowly focused on the benefits / drawbacks of working from home vs the office. There is talk of purpose, culture or values (or perhaps the lack of them) within corporates, a lack of flexibility in working from home, or uncertainty over what hybrid working will mean. But maybe, just maybe it’s all of those and something a little bit deeper and simpler – maybe we just want control of our lives back, in the same way we feel more in control of buying things. For some people (and many more than previously) they no longer want to accept that their earning capability is dictated by their employer.

That’s always been the dream for many – and entrepreneurs talk about it a lot although in many cases, it means long, long hours, high risk and a high potential failure rate. But Covid-19 highlighted the profile of that ‘freedom’ in a way that simply had never happened before, Suddenly the structure of the daily commute fell away, the school run became a home schooling planning session (a mixed blessing!) and the joys of gardening became apparent.

All of which sounds idyllic – and it wasn’t, and isn’t, for many. BUT, the glimpse of something else that is possible, a recognition that 10 hour plus working days, long commutes, on call 24/7 is not necessarily the rest of our lives, has created a restlessness, a dissatisfaction, a desire to try something different. The rise of alternatives to fulltime paid employment isn’t a bed of roses, and if left to evolve, may indeed lead to huge progress, but also huge inequality. There are lots of examples in the gig economy where that shift of power to the individual remains illusory. And it’s not for everyone – but, as this data from GoRemotely shows, the rise of the self-employed, either as a full-time or part-time occupation is global and increasing.