Layoffs are taking place all over Canada. Even once safe government jobs are safe no longer. For those under 25, the chance of getting a job at the foot of a career ladder is slim. If you are over 50 and get laid off, your chance of getting another permanent job is remote.
All these trends are global as well.
So what is going on and what can we do about it? Do we simply try harder or do we try something different? For the jobs are not coming back!
This chart shows this trend. Back in 1800, 80% of people in America worked for themselves. The rise in industrialization created the Job as the new normal. By 1980, the apogee of the Industrial model, 80% of us had jobs. But look now at what has happened in only 40 years. 40% of us now work for ourselves.
Why did this happen? Why have the jobs gone away? A global market for labour means that all jobs, blue collar and white collar, are part of a global workforce. The lowest cost wins. Secondly the issue is technology. 20 people working on classified ads at Craigslist took out 20,000 jobs in newspapers. Once technology can you replace you, your job will not come back.
We live in a time, just like the 1800′s, when the agricultural revolution was pushing people away from the land and to the cities. The old way of earning a wage is ending. We are being pushed out of the job world. Then, we went to the cities and the new factories. Now we have to find work for ourselves.
What blinds us to the opportunity is our nostalgia for the job. Our failure to see this new reality means that we often remain stuck in wishing for the job to return.
But there is a brand new world out there full of opportunity. For those that can see it.
The Real New Economy
The end of the job is not doom and gloom – provided your ambition is not to get your job back. If instead, you wish to “Make a Living”, then this is what is emerging as the real new economy.
For technology works both ways. Just as technology is taking away your job it is also giving you a new way to make a good living.
What is new, since 1980, is that there are tools available for the self-employed that enable us to be more productive than many that have a job. Even better, we can now afford tools today that only a large firm could have had back in 1980. Even better, now we can get connected over distance and time for close to free.
In 1900 most business was small personal and local. It could not be connected. This model was supplanted by the one we know well. Where scale was monolithic and based on the idea of the machine.
Now the small and personal can be connected. This gives it the power of theNetwork Effect. We are going back to future. The skilled artisan is returning. But now she has the same access to tools as the great monolith. And now she has access to the network that will give her much more power than the monolith ever had or could have.
In this new context, the very small, or the self-employed, need not be on the scrap heap, provided the have the right mindset and the right support.
The “Right Mindset” is to not look back to the job but to look forward to being an artisan again.
And what makes this all work is the Network. On our own, even with all the wonderful new tools, we are still weak. It is the network that makes all this opportunity possible. (See more on this process here)
Is this just an idea and a hope? No we are far along the road. If you don’t see it clearly yet, please let me help you see. Look over my shoulder and I will point the emerging new to you.
The Pattern and Trends
Trend #1 – Small Business is very small. It is much smaller than we think.
This is the real picture of the size of business on PEI where I live. All over the world, the very very small is where most of business is. In Holland 60% of all businesses have only 1 employee. About three-quarters of all U.S. business firms have no payroll. Most are self-employed persons operating unincorporated businesses, and may or may not be the owner’s principal source of income.(US Census)
As we look out across society, the ultra small is the predominant form that business takes. We pay the very small little attention. After all the small is so small. But what is new about small is this.
Like planetary dust, these tiny organizations are aggregating. The small is getting very powerful by the power of the network.
As the tiny specks that might be a one or a five person business aggregate into networks, they become powerful. They become worthy of our notice.
Trend #2. They are creating informal networks of support for themselves. Take a look at the Film Factory link here and see how the PEI Film Community is working together to help each other do more than any one of them could do on their own. Their intent? To be able to make a full length feature film as a matter of course. In other words to have the power of a medium sized studio.
Before the advent of the network and the new tools this could never have happened.
As well as groups of people in the same field joining networks of support. Millions of freelancers are joining together in Co-Working sites.
If factories and offices are physical symbols of the Industrial Age, then Co-Working Sites are the physical symbols of the Network Age. In 2004 there were none of these. This map shows the scale of Co-Working in the world today. More appear every week.
Now hundreds of these Co Working sites are joining a global network of Co Working sites.
Co-Working is more than the offer of a cheap and social workplace for the Freelancer. They are now at the heart of the development of the vital new power and innovation networks. A Trusted Space gives rise to Community. And then Community gives rise to Innovation. Innovation to Power.
Trend #3 They are forming formal Networks and Aggregation to create and to capture larger markets – Networks are also creating new markets. For instance, an entirely new food system is emerging. This new system is itself based on very small units that do not depend on oil or external inputs.
Rowe Farms in Ontario is a network of farmers who are pasturing animals and selling direct via farmer’s markets and online. Pastured meat is a powerful new method that is based on how the great plains worked. Ro
tations of animals graze in small herds. Here is a link to the model. Producers sell directly or into local networks of markets that sell directly. Grass fed meat is exploding as a market, as more people become aware of the risks of eating food produced in the industrial system.
“The number of U.S. farmers raising grass- fed cattle doubled from 2007 to 2008 and again from 2008 to 2009,” Hartman said. “Regionally, there isn’t enough grass-fed beef to meet the demand.” Will Harris, a member of the American Grassfed Association’s executive committee, estimates about 1 percent of the beef produced in the U.S. is grass-fed (though it is most likely higher, since not all grass-fed beef farmers. (link)
Many Farmers who abide by the rules of the new food system are informally aggregating on sites like Eat Wild. They have a much better chance of reaching the market this way than on their own.
Aggregation is part of this network trend. We see it most clearly in the craft sector.
Until now, crafts were a sideline. But now you can make a living from your crafts. Provided you play be the new network rules and belong to an aggregator. Community Aggregation sites like Etsy and Ravelry are enabling those in the Crafts and Knitting world – millions of members – get the value of an aggregated online market. Many can now earn a living from what was perviously only a hobby. This would have been impossible without this kind of aggregation.
Like the pasture based farm system, a craft system is driving a wedge into the commodity alternative. When goods are commodities, many want things that have meaning. Your choice for your niece is a toy from Walmart or a hand made toy. More and more choose the toy with meaning.
(We will explore the Market for all of this in the next section: Trust – The New Market)
Trend#4 They are sharing expensive capital items
Collaborative Consumption. There are new networks emerging that are reintroducing trust into society. This then is helping us to share goods and services as we might have before industrialization split us up. Many are putting their apartments up for rent on sites like Airbnb. This way you can get some income for your place and you can also find a good place to stay when you travel. Now you don’t have to own a car – you can car share like this. Bike sharing inLondon and in Montreal has become the new normal.
Trend #5 They are able to get very powerful tools that give them a level playing field with large companies. With Skype and related tools, global communications are all but free. In film any person can afford an editing suite that only ten years ago would have been the preserve of a studio.
Coming soon with 3D printing, it will be possible to custom make manufactured goods with the same ease and at a price that a self-employed person can afford. Many think that this will herald a new industrial revolution.One where the work goes back to the home and where mass customization replaces mass production.
Trend#6 – Open Source- Making the new cheap and good. While the Industrial model fights for more copyright, the real new economy offers more and more for free using the Open Source Model.
What this means in practice that new technology is available to the individual at a very low-cost. It also means that systems that use the open source model tend to be more robust than those made in a proprietary way. For Open Source is a Darwinian process where the good replaces the less good and where thousands work at this process of improvement.
What began in the software world is spreading to all parts of the economy. What is very exciting is how it is spreading to the 3D printing world. It has even been used to make a car.
Trend#7 Free Education and Free Advice on how to take charge of our Health – A degree is no loner a guarantee of a well paying job. Education and Health Care are the 2 most expensive services that we buy. As the costs now exceed what most can afford, new web-based alternatives are springing up. (Full account of this on the link)
In education, we see the Khan Academy emerging as a paradigm changing force.Many of the leading universities are also putting their best courses online. Outstanding learning opportunities are more and more available.
In health we see a revolution as great as the discovery in the 19th century when we found the root cause of infection. Pioneers are revealing that changes in diet back to a diet that fits our evolution prevent most of the modern chronic diseases. This is still very much in the pioneer phase but has the potential to protect people from both the diseases and the financial risks of the status quo.
Millions of people will both offer and receive advice in the new networked model. Billions of costs will be cut out of our lives and millions of revenues diverted to people who make a contribution to the new system.
Trend#8 – The Maker Household – As all these forces start to converge. the Home is returning as the centre of the “Economy” (oikonomia, “management of a household, administration”) where life and work come back together.
Trillions of costs then come out of the system. The need to commute will drop. Child care costs will drop. Clothing costs will drop. And life will return to where we live. The home and our local community will be restored. It will be a place where our children grow up with their parents again and where they participate in the full life of the family.
These trends intertwine into the pattern that empowers the ultra small business. So much so that it do what the Industrial Model did. It has the power to become the dominant paradigm for the 21st century.
As you can see, it has costs that cannot be matched by the old model.
What it also has is a new market that is supporting its growth from Pioneer to Mainstream.
Trust the New Market
This shift is being also pulled by a new market. Millions of people are looking for goods and services that they can trust. They are a minority now but their number is growing fast.
They are the people who are buying the goods and services offered by the tiny small businesses in the new networks.
Why are they doing this when goods and services are offered by large corporations and large institutions? The issue is Trust.
More and more people are asking what is in Processed food and what is being concealed by the makers? Do these drugs work? What are the side effects? Are we being told the truth? What paints are used on these toys? Is my son getting a good education for all that debt at university?
All economies are based in something that is scarce. At a time when goods and services are abundant what is scarce now is Trust. The daily news is constantly full of news about institutional failures of trust. The Occupy Wall Street movement embodies this sense that institutions are at best lost or at worst involved in some kind of conspiracy.
But I think that the real cause of this loss of trust is not a conspiracy but a systems issue.
Once an industrial organization, for profit or not, reaches a scale, it has only one real mission. That is it has to exceed its ever rising sunk costs. It will do anything to do this. This is why at a time when large business has never had such scale and when government has never been so large, that our trust in what they do and say is eroding so fast. It is also why they can do nothing to change this. For being so large, they have no choice but to look after themselves.
This is loss of trust and the vast sunk costs that support scale in the industrial model are what give the Networked Small and Personal the edge.
No one knows more about this loss of trust and how all is treated as a cost issue than the employees of the old system. If they are still employed, they live the rhetoric and grow more cynical every day. If they have been expelled, they know how the old contract has been broken.
But if all you know is the job, how do you get prepared to do well in the new networked world as a freelancer or as a very small business person?
The challenge is mindset. If you have been looked after in a job, what do you know of making your life on your own? Like riding a bike, no book can help you really.
Our advice is to join a co-working space. There you will have access to both the social aspects of a network and you will have the advice and support that you need to do well as a new immigrant to this New World of the Networked Economy.
By: Robert Paterson - http://smartpei.typepad.com/ – @robpatrob