labour pains - EIU Perspectives - The Economist

LABOUR PAINS

COMING SHIFTS IN THE WORLD OF WORK A report from The Economist Intelligence Unit

Commissioned by

Labour Pains Coming shifts in the world of work

Contents About the research

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Executive summary

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1. An altered balance of power

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On-demand workers in demand

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Harnessing tensions

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Technology watch for the workplace

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2. The on-demand workplace

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A responsive workplace

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Get moving

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3. Will the workplace be too intelligent?

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Limits to leisure

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Is privacy dead?

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Modernising data protection

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Conclusion: Where tech leads, will others follow?

© The Economist Intelligence Unit Limited 2017

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About the research Labour pains: coming shifts in the world of work, written by The EIU and sponsored by Standard Chartered Private Bank, is the second report in a series entitled “Better Life Breakthroughs”. The aim of the series is to analyse innovations that have the capacity to extend and enrich life, create new experiences and improve society in general. For those with the means to incorporate cutting-edge technology into their lives – thereby experiencing the future before it becomes mainstream – the impact may prove more revolutionary than anyone can imagine. From advances in computing, financial technology, medicine and healthcare through to commercial space travel and artificial intelligence, these developments will likely be driven in their early stages by globally and intellectually curious consumers. The first report in the series examined technology advances that are creating new investment opportunities for high net worth investors. This report explores how the work environment may change under the combined impact of technology advances, shifts in workforce demographics and attitudes, and new thinking on workplace organisation and design. The report draws on detailed desk research and in-depth interviews with the following specialists and executives (listed alphabetically by last name):

n Sean Hsu, president and CEO, Netcom Africa n Robert Mankin, partner, NBBJ n Jeanne Meister, founding partner, Future Workplace n Jeremy Neuner, consultant n Eric Phillips, partner, NBBJ n Carlo Ratti, director, MIT Senseable City Lab; founder, Carlo Ratti Associati n T Singaravelan, co-founder, Evercomm n Ray Yuen, workplace design leader, Woods Bagot We would like to thank all the interviewees for their time and insight. The report was edited by Naka Kondo and written by Denis McCauley. The EIU bears sole responsibility for the content of this report. The findings do not necessarily reflect the views of the sponsor. n


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Executive summary The media and popular literature abound with visions of work in the future. Some are dystopian, foreseeing a workplace where software and machines perform most tasks and humans are thin on the ground. Others are benign, anticipating that current modes of work will survive well into the future, and that new technologies will make work and the workplace a more enjoyable experience than today. However, even those of the latter, more optimistic bent acknowledge that the path to the work future will be strewn with difficult realities that employers and employees will need to face up to. Does the inexorable expansion of the digital economy portend a shift of the balance of power in the workplace? Will the rise of an on-demand workforce further upset this balance? And how will the relentless march of today’s emergent technologies, including artificial intelligence (AI) and others impact the work environment? This report explores these forces and the challenges they will pose to businesses, as well as how some companies are responding today with an eye to the future. Our analysis is based in part on insights gained in a series of interviews conducted with individuals whose job it is to think deeply about modes and places of work: futurists, architects, technologists, entrepreneurs and corporate executives.

The report’s conclusions include the following: n Managing tomorrow’s workforce will be a balancing act. Employers will go out of their way to accommodate the skilled talent – including on-demand workers – they need, for example by seeking to make the workplace a more pleasurable environment, as well as providing green spaces and other elements that contribute to employee health and well-being, all in the expectation of greater innovation and productivity. These may not result, however, if employers fail to address other challenges that are certain to arise, including that of strains developing between permanent and on-demand staff. n New tensions will need to be smoothed. To try and ensure that corporate culture doesn’t suffer from the presence of a less-tethered category of talent, employers will look to equalise the treatment of both categories of worker to the greatest extent possible. Full-time employees, however, will worry about their longevity, particularly if their contract colleagues possess more advanced technology skills. The former are also likely to resent some of the flexibility enjoyed by on-demand workers, for example when it comes to remote working opportunities.

1 The World’s Cities in 2016: Data Booklet, United Nations. Available at: http://www.un.org/en/development/desa/population/publications/pdf/urbanization/the_worlds_cities_ in_2016_data_booklet.pdf

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n The work-leisure balance is likely to shift back again. Some experts also worry that too pleasurable a work environment will become detrimental to productivity, if protective bubbles form that lead to insularity from their customers. There will be a backlash against leisure and fun amongst some employers if productivity and innovation gains fail to materialise. n Some new technologies will be transformative, and also painful. AI-based automation, intelligent sensors and augmented reality, among other technologies, will give both employers and employees capabilities to operate in new ways. Productivity, creativity and safety should all benefit, but deft change management will be required, and employee worries about displacement by technology will be an ever-present source of workplace tension. New roles will open up for employees, some of which will emphasise their unique human abilities in communication, interaction and creative thinking.

for protecting individuals’ data will force companies to modernise the data practices used by all employees. n Work innovation will not be confined to technology companies. The technology sector is today the focus of most experimentation with new modes of working and workspace design. However, other sectors – notably financial services, healthcare, retail and logistics – are experimenting no less actively with technologies likely to shape work in the future, including artificial intelligence, networked sensors, augmented reality (AR) and others. As the boundaries between the technology and other sectors fade, the sources of work innovation in the future are likely to be more varied. n

n Privacy will become a relic of the past. The future ubiquity of networked sensors and other emergent technologies means that privacy will be severely diminished in tomorrow’s workplace. Sensors, for example, will enable much closer monitoring of employee performance. Even skilled, indemand workers will recognise diminished privacy in the workplace as a necessary tradeoff. Separately, tougher legal requirements


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An altered balance of power If there is one business endeavour that will remain well into the future, it is the relentless pursuit of better innovation. How to foster the more frequent generation of ideas that will lead to unique new products or services, or even change business models? How to create the conditions for the serendipitous encounters that often generate such ideas? Where to find, and how to hold onto, the type of talented people that can deliver more and better innovation? These are questions businesses will continue to seek answers to in the coming years to ensure their organisations remain fit for purpose. Few would have predicted five years ago that by 2017 organisations would have installed more than 8bn intelligent sensors in their buildings, equipment and other assets, making a reality of the Internet of Things1. Not many would have predicted then that AI techniques would already be underpinning popular services, such as car sharing apps or financial “robo-advisors”. While the accelerated adoption of today’s emergent technologies will undoubtedly help drive such innovation, these increasingly compressed technology absorption cycles also pose companies a difficult workforce challenge. Business leaders worry that they will be unable to hire the skilled people they will need in the future, in different parts of their organisation,

to master these and other technologies and deliver better innovation. Almost eight in ten CEOs in a global survey conducted earlier in 2017 by the consultancy PwC cite constraints on the availability of key skills as the biggest threat to their business today2. Many expect such skills gaps to remain a fact of business life well into the future.

On-demand workers in demand The “on-demand workforce” – sometimes referred to as the “gig economy workforce”, the growing legions of people leaving fulltime employment to work as contractors and free-lancers – will offer businesses a partial solution to this dilemma. Companies are availing themselves today of the opportunity to contract talent for finite periods of time to perform hardto-fill digital and other skilled roles, including website designers, software developers and other technology specialists as well as professionals with broader experience in marketing, finance, legal and other disciplines. The scope of the ondemand workforce is expanding to take in higher level roles such as part-time chief marketing officers and even chief executive officers. Firms are able to do the same today for jobs at lower skill levels, examples being Uber taxi drivers

1 “Gartner Says 8.4 Billion Connected ‘Things’ Will Be in Use in 2017, Up 31 Percent From 2016”, Gartner press release, February 7, 2017. 2 PwC, “The talent challenge: Harnessing the power of human skills in the machine age: 20th CEO Survey”.

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Chart 1: US workers in the on-demand economy (m workers) 9.2

2021 2020

7.7

2019

6.7

2018

5.8

2017 2016

4.8 3.9

Source: Intuit and Emergent Research

and TaskRabbit tradespeople. This is not a new phenomenon, but on-demand workers will be a much more prominent feature of the workforce structure in the years to come. According to one forecast, this category of workers will exceed 40% of the US workforce in 20203. The on-demand trend will not be confined to rich-world markets. Ray Yuen, a Beijing-based principal at Woods Bagot, an international design practice, believes that talent wars, particularly for skilled digital specialists, are even hotter now in developing markets than in established markets. Sean Hsu, president and CEO, Netcom Africa, a Lagos-based telecoms service provider, says that companies like his are making use of on-demand talent today, via online platforms, to obtain expertise they cannot obtain locally. Unlike in the US or Europe, however, he believes it will be several years before on-demand talent

becomes plentiful on the ground in sub-Saharan Africa; contracting will remain predominantly an online model, connecting African employers with overseas talent. Elsewhere in the world, the growth of the ondemand workforce will pose as many challenges as opportunities for employers. For one thing, the large contingent of workers at higher skill levels is likely to parlay its knowledge and flexibility into stronger negotiating power with employers. “The pendulum is swinging from the employer to the on-demand worker,” says Jeanne Meister, founding partner of Future Workplace, an HR advisory firm. “Today’s technology platforms are making it easy for such workers to find the jobs that most leverage their skillsets.” Not all on-demand workers will be in the driver’s seat. Low rates paid by employers, pressure to

3 Intuit press release: “Research Shows That 3.9M Americans Now Work On-Demand Jobs, Majority Do So Part-Time to Supplement Income”, February 21, 2017; and “The gig economy workforce will double in four years”, Recode, May 25, 2017. © The Economist Intelligence Unit Limited 2017

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work difficult schedules, a lack of benefits and zero-hour contracts (no contractual guarantee of work being assigned) will remain a reality for some types of on-demand workers – even in some skilled technical roles – into the future. Their valued independence will also be balanced by a lack of protection, as employers can end contracts and short-term engagements as quickly as they begin them. A British economist, Tim Harford, acknowledged in a recent FT article that parts of the on-demand economy could be ruled by a few monopoly employers that dictate exploitative terms for those workers they contract. But, he added, “it is not too hard to imagine a world in which skilled workers wrest back control using opensource software agents, join electronic guilds or unions and enjoy a serious income alongside unprecedented autonomy”4. They will use, amongst other tools, future versions of today’s more successful free-lance platforms, such as Toptal, which specialises in software engineers and digital designers, and Upwork, a network (formed from a merger of two free-lance platform pioneers, Elance and oDesk) that matches IT professionals as well as writers, creative designers, marketers and others with companies. A related dilemma for companies will be how to foster a cohesive culture when part of their skilled workforce are less tethered to their employer than their colleagues are. According to Ms Meister, businesses will need to apply the same performance criteria, reward and recognition systems, training and development

opportunities, and coaching and mentoring programmes to their on-demand workers as they do to full-time employees. “The additional training is a new type of cost that employers will have to take into account,” she says. Jeremy Neuner, a workplace consultant and author (and co-founder of NextSpace, a US co-working facility), agrees that contractors and free-lancers will need to be developed and compensated much as full-time employees are, to maximise cohesion and productivity. His vision of future workforce organisation, whether at an information, service or manufacturing company, is that of a series of concentric circles. “The inner core are the essential people with the essential tools they need to get done what the company needs done. That’s surrounded by concentric circles of support people and ideas people and even some leadership people that may not need to be in the inner core; they perhaps should a bit detached from it, precisely because they don’t want to get too siloed.” The inner core is likely to consist predominantly of full-time employees, but on-demand workers will be prominent in the concentric circles surrounding the core. Even if they populate the outer circles, they need to be “kept happy, healthy and productive”.

Harnessing tensions Still, employing a large contingent of skilled on-demand workers will inevitably create tensions within teams. Even if they continue to enjoy better compensation, permanent

4 Tim Harford, “Think like a supermodel if you want to win from the gig economy”, FT, July 14, 2017.

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staff will wonder whether their jobs are at risk as the ranks of on-demand hires grow. Generational differences will add to the tensions, as technology savvy millennials and the digital natives of Generation Z – comfortable using digital platforms to contract themselves out – will dominate the ranks of on-demand workers. Another source of tension, says Ms Meister, will be the flexibility many on-demand specialists enjoy to work remotely, particularly if companies continue to pull their full-time employees back into the office to work on traditional schedules5. In developing country environments such as Africa, says Mr Hsu, inter-cultural differences will add another layer of tension, since most on-demand talent will continue to consist of Europeans, Asians and North Americans. Authors writing in the Harvard Business Review in 2016 stated the expectation that managers would anticipate such tensions and find ways to avoid creating winners and losers. For example, managers may need to go to extra lengths to assure full-time employees that contract workers are a supplement and not a replacement for the former. They should also, the authors say, explain the strategic benefits that on-demand talent brings to the business – in the form, for example, of expertise with new technologies – rather than cite cost savings6.

older generations of employees, says Ms Meister, and they are starting to request their own customised benefits to help cover their children’s university fees, and other benefits targeted to older workers. “We are certain to see more customisation of benefits between categories of employees in future years, including personalisation to individuals’ circumstances,” she says. Sabbaticals used by employees to upgrade their skills are also likely to become a feature of individualised benefit portfolios. Mr Neuner believes a big part of the answer to smoothing tensions between their full-time and on-demand workers, and between their older and younger ones, is choice. “Companies will come to recognise that different sets of their employees have different preferred work modes at different points of their day, whether focused, collaborative or social. Managers will need to allow their employees to determine what they need to be most productive and where that will be.” Naturally, he adds, with some parameters applied.

Ms Meister expects to see greater customisation of employee benefits in the coming years. Several companies in the US, for example, have begun helping young new hires to pay down their student loans. This is causing tension with

5 See, for example, “Employers IBM, Aetna, Best Buy cut back on work-from-home deals”, Wall Street Journal, July 27, 20107. 6 Jon Younger and Norm Smallwood, “Managing On-Demand Talent”, Harvard Business Review, January 28, 2016. © The Economist Intelligence Unit Limited 2017

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Technology watch for the workplace Asked to name the technologies that will do most to change work in the next decade, the experts we interviewed all point to AI, networked sensors and augmented reality above others.

Networked sensors

Artificial intelligence

n AI capabilities will take machine translation to new levels, having conquered shortcomings in recognising context and nuance in language. The advantages of multi-lingualism will not disappear but may recede in some support roles, such as customer service. n AI virtual agents will manage the IT service desk and will eventually become the principal interface between IT and technology end-users, using machinelearning capabilities to resolve issues on the spot. AI bots will also perform many more admin functions in HR, accounting and elsewhere in the back-office.

n Energy companies will monitor the health indicators of engineers working on hazardous sites with the help of sensors embedded in clothing, wireless devices, work tools and installed assets. Fleet managers will do the same for drivers via sensors embedded in these as well as vehicle seats and other components.

Chart 2: IoT units installed base (m units) 20,415

2020 2018

11,197

2017 2016

8,381 6,382

Source: Gartner, January 2017

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All are finding their way into the workplace today to one degree or another, but thus far in a limited fashion. Here are a few things they may be enabling five years from now:

Augmented reality

n Marketers and advertisers wearing ARcapable eyeglasses will be a common sight in offices as they visualise creative ads and other content they are designing for clients. n Mobile IT engineers will roam the floors wearing headsets enabling the visualisation of networks schematics as they install new hardware or configure new systems. n Shop floor workers will follow instructions appearing in their eyewear about how to assemble or repair machinery, and the specific types and sizes of tools and parts to use.

Tactile internet

n Surgeons will be able to perform surgery on patients, technicians to repair appliances for customers, and designers to manipulate models for clients, from distant locations thanks to advances in haptics, which create the sense of touch. The tactile internet will also leverage advances in AR and IoT sensors, as well as the advent of 5G mobile technology, which will enable the instantaneous response of remote machines to human movements. n


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The on-demand workplace “Organisations must innovate faster in order to compete in today’s economy. But the talent that enables them to think differently is hard to find. Workplace design, when combined with other

“The current workplace, as we know it, is a poor way of bringing people, ideas, talent and tools together,” according to Jeremy Neuner: “We’ve taken the old factory model of aggregating people, ideas and the tools they need and brought it into the information and innovation economy. That model is not fit for purpose.”

tools, creates a unique and dynamic experience that attracts and retains this top tier of labour.” Robert Mankin, NBBJ

Many technology companies have taken that message on board and are designing futuristic workspaces that they believe will foster the greater innovation and creativity they are seeking, and will be a magnet for the best and the brightest, including on-demand talent or those seeking permanent status. It will take longer than five or ten years for their designs to become an economy-wide standard, but it is likely that many of their elements will be emulated widely in the foreseeable future.

A responsive workplace The main attributes such designs seek to foster may be summarised as flexibility, mobility, wellness and connection. All of them serve the overarching goal of building an attractive brand as employer. “Space promotes culture and employer brand,” says Ms Meister. “Companies want to create a sort of trophy workspace that communicates

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their vision, their values and their culture, that sparks innovation and collaboration and is known to be a very cool place to work.” The first attribute is flexibility, for both employee and employer. Carlo Ratti, director of the Senseable City Lab at the Massachusetts Institute of Technology (MIT), believes the future workspace will be digitally responsive: “Digital technologies give form to an endlessly reconfigurable environment. In the future, we can imagine an architecture that adapts to human need, rather than the other way around – a living, tailored space that is moulded to its inhabitants’ needs, characters, and desires.” Greater employee choice of spaces to work becomes a reality in this scenario. Most experts see almost no place in tomorrow’s office for the long familiar fixed work station, at least for those below senior management level. Technologies such as networked sensors and AR will make choice of workspace the norm, in which employees seek out available spaces to work depending on their need at a given moment. Employers will be afforded the flexibility to reconfigure their workspace to meet changing conditions, much more easily than is the case today. “Motion and traffic sensors will help


business owners understand the real value of their real estate, and how much of it is being utilised, which can really help their bottom line,” says Mr Yuen.

Get moving If today’s new designs are an indicator, physical mobility – employees moving around the floor and building – will be a greater feature of the future workplace. One objective of this, for some companies, is promoting employee health and wellness. Proponents of health and wellbeing programmes in the workplace believe they are a contributor to better business performance, and academic research appears to support that view. Two studies published in 2016 found that the shares of publicly listed companies with well-developed health and wellbeing strategies outperformed that of the S&P 500 over extended periods of time: in one study by 235% over a six-year period, and in the other by 325% over a 14-year period7. Eric Phillips, who is a partner of NBBJ, based in Shanghai, expects many employers to encourage greater mobility as part of their wellbeing strategies. “The most productive meeting you can have is a walking meeting,” he says. He refers to research conducted by John Medina, a developmental biologist, who maintains that people’s brains function at a higher level when they’re moving, retaining more information and being more proactive. “Getting people walking,” says Mr Phillips, “is not only conducive

to employee’s health but it can also increase their performance levels.” Tencent appears to buy into the mobility concept. Its new headquarters in Beijing features a continuous walking track that staff can drop down into if they need to have a meeting with a colleague. They can also use it to have a postlunch stroll amongst landscaped corridors. It is representative of the types of office designs China’s burgeoning multinationals are pushing, according to Mr Yuen. In part, this is to ameliorate the effects of poor air quality in the country’s big cities. “It marries the objectives of boosting productivity and improving employee health and well-being,” he says. It is also allied to the idea of encouraging more “connections” between employees, including the serendipitous type, in shared spaces, that lead to creative new ideas. “Different companies have different ways of creating common connective physical space,” says Mr Yuen. In the US, Google uses food as a connector with their cafes. Chinese companies are trying to do something similar but are more focused on well-being and health. Green spaces and gardens, fitness centres and yoga studios, childcare facilities and primarycare health clinics are finding their way into company offices today and will likely be a common feature at larger firms for the next decade. Convenience, wellness and leisure are all part of a formula, says Ms Meister, for “making the workplace a fun and creative place to be working.” n

7 Jessica Grossmeier, et al, “Linking Workplace Health Promotion Best Practices and Organizational Financial Performance” (235% between 2009 and 2015); and Ron Z Goetzel, et al, “The Stock Performance of C. Everett Koop Award Winners Compared With the Standard & Poor’s 500 Index” (325% between 2000 and 2014). Both articles appeared in the Journal of Occupational and Environmental Medicine in January 2016. © The Economist Intelligence Unit Limited 2017

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Will the workplace be too intelligent? “Engineers’ and technicians’ fears about AI will fade once they see it in action, and understand how it will improve, rather than replace, their jobs. But re-skilling will still be needed for many.” T Singaravelan, co-founder, Evercomm

Should the design concepts described above take hold widely and achieve their desired effect, the office of tomorrow promises to be a more interesting, productive and possibly even more enjoyable place to work. Even with all the green space and amenities, however, it is unlikely to be a low-stress environment. One strain will be the inevitable resistance to change that accompanies the adoption of new technologies. Good change management skills on the part of senior managers will remain at a premium. Another source of stress, palpable even now, is the fear that AI and other forms of automation will displace people from the jobs they’re qualified to perform today. In a study conducted by The Economist Intelligence Unit in 2016, 46% of business managers said they expect their own job to be performed by an AI-based technology within the next five years8. Many experts believe this fear is misplaced. Jeanne Meister maintains that the challenge for employees will not be having to find a new job, but rather upgrading their skills to perform different activities in the free time AI will create for them. “AI will augment more roles in companies than it replaces. Individuals in roles featuring some degree of administrative and routine work will have to be retrained or upskilled to figure out what are they going to do with the extra time they gain.”

8 Artificial intelligence in the real world: The business case takes shape, January 2016.

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Chart 3: Top ten skills employees will need to thrive in 2020 1

Complex problem-solving

2

Critical thinking

3 Creativity 4

People management

5

Co-ordinating with others

6

Emotional intelligence

7

Judgment and decision-making

8

Service orientation

9 Negotiation 10 Cognitive flexibility Source: World Economic Forum, “The Future of Jobs: Employment, Skills and Workforce Strategy for the Fourth Industrial Revolution”, 2016. The ranking is based on a global survey of chief human resources and strategy officers.

Learning to manipulate AI and other newer technologies will be important, but more vital in Ms Meister’s view will be improving inherent human skills such as communication, collaboration, critical thinking and relationship building. She offers the example of recruitment co-ordinators. “AI-based automation will take over a large amount of the routine and administrative work they currently bear. To make themselves more valuable to the company, they will need to develop, for example, storytelling skills and emotional intelligence to help communicate the company’s values to highquality talent in the job market.”


AI is unlikely to penetrate developing-country businesses as widely as in the rich world, but Mr Hsu echoes Ms Meister’s view about the enduring need for talent with soft skills. “We will be in desperate need of technologically astute people who can also solve problems, communicate well and be creative. AI won’t have those capabilities for at least the next ten years.”

Limits to leisure The lifestyle aspects built into tomorrow’s workplace also pose risks. For one thing, it is not difficult to envision some unintended consequences of the greater variety of opportunities for leisure and fun. Jeremy Neuner worries about a protective bubble forming around employees that leads to insularity: “This is a tricky balance,” he says. “You want your talented employees to be happy and productive. So an interest in their health and wellness is in a company’s strategic interest. But if these employers are so inside a bubble that they forget about the people who actually use their products, they can end up making products for the people inside the bubble.” Mr Phillips believes there may eventually be pushback amongst employers against singlepurpose leisure and amenities. “A balance has to be struck between fun and productivity,” he says. “Right now it’s tilting toward the former, but in five or ten years it will probably start

tilting back. At some point productivity will drop, because there’s a tipping point of how much fun and leisure can be had in the workplace. The solution is to create more sophisticated amenities—like maker spaces—that are fun, but also help employees to think creatively, which can better help them in their work tasks.” It will indeed be more a question of finding the right balance rather than a full-scale retreat from leisure and amenities. Academic research has found that workplace opportunities for relaxation up to a certain level results in greater productivity, but at higher levels has the opposite effect9. Mr Yuen of Woods Bagot agrees that some employers will re-think amenities and leisure but that, in the technology sector at least, they will be part of the workplace for a long time to come. “Teams will still be expected to work very long hours on projects, and supporting amenities such as space for relaxation, recreational activities, exercise and other downtime will be ever-present.” Employers in Africa will face a different dilemma in trying to improve employee productivity, according to Mr Hsu. Workplace leisure opportunities are not a priority for local employees. Most spend several hours each day travelling great distances to and from work, enduring chronic gridlock on the roads. “In this environment, people just want to do their jobs and go home,” he says. “My priority would be to somehow make their journeys less painful.”

9 Although studies have been conducted on links between happiness and productivity, few have examined the impact on productivity of leisure or amenities. One that did, published in 2013 by two New York-academics, found that less than 15% of total work hours spent on leisure has a beneficial impact on productivity, while there is a significant negative correlation when leisure time exceeds 40% of work hours. Angela Lebbon and Dene Hurley, “The effects of workplace leisure behaviour on work-related behaviour”, Journal of Behavioral Studies in Business, 2013. © The Economist Intelligence Unit Limited 2017

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Is privacy dead? If you can tell employees that your use of their personal data helped make the company 15% or 20% more productive, they will be more understanding

Employees will also need to come to terms with more intrusions into their privacy. The flipside of having intelligence at your fingertips (or in your eyeglasses) is that your activities and behaviours are being monitored much more closely.

of the privacy trade-off involved, especially if they get rewarded for that productivity.” Jeremy Neuner

This is a trade-off employees will come to terms with, believes Mr Yuen. In China, for example, “young people today are used to people knowing what they’re doing, and they don’t care.” In the case of technology companies, he maintains, “employees won’t have a problem with it because they will have bought into that unique culture.” It is inevitable that there will be continuing tension created by ubiquitous monitoring of employees, but employers can alleviate it with greater transparency about how the data generated is being used. Mr Neuner believes employees will react positively to employers who are open about such monitoring. The latter will engender trust, he feels, through communication: “Here’s the data that we’re collecting on you, here’s how we’re using it, and here are the benefits we’re gaining from it.” Should that include an employee opt-in to company use of, for example, data about their health status? Mr Neuner believes it will not go that far. “But at least there will be greater understanding,” he says.

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Modernising data protection Change is coming in how businesses, in Europe and further afield, manage individuals’ data. The catalyst is the European Union’s General Data Protection Regulation (GDPR), which comes into force in May 2018. It prescribes a range of rules and internal practices that any organisation which holds data on EU citizens must follow; failure to comply will invite stiff financial penalties. Building the required safeguards will partly involve process changes to be implemented by IT, security and data management teams. It will also entail modifying existing data protection practices on the part of employees. Whether through systems or human action, organisations will be responsible, amongst other things, for: n Conducting privacy impact assessments ahead of any project that involves processing of individuals’ personal data and/or its sharing with third parties;

In this light, data protection may pose a particular challenge for businesses with a large contingent of on-demand workers. These will be prominent in data engineering, data analysis, user experience, customer service and other marketing roles, all of which involve the handling of large amounts of customer data or interaction with customers in relation to their data. They will need to be fully covered by the required data protection training and awareness programmes, and stipulations may need to be written into their contracts to ensure their accountability. In some cases, the data safeguards employers develop for on-demand staff may even need to be stronger than for full-time staff, given the former’s independent status. When penalising companies for breaches of the new rules, European courts will not distinguish between the categories of worker who committed them. Employers thus need to ensure their data protection practices are fully adapted to changes in workforce organisation. n

n Identifying the origin of all customer data they collect; n Providing detailed information to individuals, on their request and in good time, about how and why their personal data is to be processed; n Establishing clear accountability for data protection, with certain organisations required to appoint a dedicated data protection officer.


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Conclusion: Where tech leads, will others follow? Technology companies feature prominently in the examples we have provided of futureoriented work thinking, and for good reason. The industry is the source of some of the most innovative, and often disruptive, business models of the past two decades, in addition of course to the technologies that companies in other industries have used to transform themselves. Because of its dynamism, the tech industry may also feel talent shortages more keenly than other industries, giving them greater motivation to experiment with work modes that will be appealing to the best of the on-demand workforce. All the experts interviewed for this project, however, observe that firms in more traditional industries are moving in the same direction in terms of workforce and workspace organisation. The borders separating industries are in any event fading: In ten years it will be difficult to distinguish a technology firm from one providing healthcare or financial services. Even now, observes Mr Yuen, there is a significant blurring of the financial and technology sectors, thanks to the impact of big data. In that situation, it will be difficult to say which sector is leading the rest in integrating new modes of work and workplace designs.

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It is not difficult to envision scenarios in which companies in traditional industries become leaders in introducing new ways of working. After all, the tech industry may be the source of ground-breaking new technologies such as networked sensors and AI, but it is “old-world” industries that are taking the lead in deploying them. With the possible exception of driverless cars, the earliest pilots of AI have been taking place in the financial sector, especially investment management, and in healthcare. AI already has a home in the medical sector, where machine-learning software powers advanced diagnostics tools used by doctors, and self-learning robots are being piloted in supporting roles in the operating theatre. Energy companies, consumer goods manufacturers, logistics firms and engineering firms are making widescale use of networked sensors today, some of them in combination with AI and AR. Given the growing influence of smaller fintech, health-tech and energy-tech start-ups on their respective industries, we should expect to see experiments in workplace innovation expand well beyond the technology sector in the notdistant future. n

While every effort has been taken to verify the accuracy of this information, The Economist Intelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this report or any of the information, opinions or conclusions set out in this report.

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