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As we approach 2020, profound socio-political, economic, technical and environmental changes are affecting the world of work. These changes and the accompanying challenges will impact on the roles, skills and significance of management in both theory and practice. The key challenges and opportunities may be categorised as the impact of Industry 4.0 (Fourth Industrial Revolution, 4IR, FIR, or simply 4.0) on workplaces, jobs and skills; the rise of the gig economy; and finally, the expectations of Millennials.
Of all these challenges, Industry 4.0 has the potential to have the most enduring and widespread effects on present and future organisations, workplaces, employment conditions, jobs and employees’ skills requirements. This technological ‘revolution’ is the digital transformation in society and business which involves an interface between technologies in the physical, digital and biological disciplines (Schwab, 2015). Emerging technology – such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage and quantum computing – represent just the tip of this technology iceberg. Significant workplace changes and the potential to replace low- and medium-skilled jobs by robots are anticipated (Ford 2018). It is likely that all industries and most occupations will be transformed by Industry 4.0, with increasing job opportunities in creative work, human-centred and skilled trades jobs (Schwab 2015).
How prepared are Australian governments and managers for Industry 4.0 then? According to some current research, it seems not very well. For example, in our region, China, India, Indonesia, Malaysia, Singapore, Taiwan, Thailand all have national plans or programs to address the labour market and workforce implications. Australia does not, nor are there significant industry conversations about the tsunami which is about to confront our economy and its organisations. Our own preliminary research through focus groups has revealed a variety of perspectives on these issues:
‘I think a lot of organisations aren’t even in this space at the moment, you know, the vast majority of them; so, they understand it's coming but they don't realise it's here, just not in these organisations. It's a big step from technology to artificial intelligence and machine learning and Internet of things, and there is not really an appetite at the moment’ (Perth manager).
‘So, we haven’t seen like jobs being replaced by robots, but its roles are morphing to include technologies and basically every role now includes some element, whether it’s a cleaner or a security guard, we know – like, they’re all just embracing it’ (Sydney manager).
‘There are, without doubt, going to be some roles that will require some upskilling in other areas because automation means that their specific skillset may not be required anymore, but that’s certainly not within our company’ (Melbourne manager).
‘I keep scratching my head and going why are people doing accounting degrees, like, seriously? Do you not know by the time you’ve finished degree that job is not going to be there?’ (Brisbane manager).
Only eleven percent of the managers surveyed reported that their organisations had achieved Industry 4.0 status. A report from The Economist’s Economic Intelligence Unit (EIU) seems to confirm this, ranking Australia eleventh on its Automation Readiness Index, behind South Korea, Germany, Singapore, Japan, Canada, Estonia, France, the UK and US (EIU, 2018).
The challenge for Australian managers in order to reap benefits from Industry 4.0 are first, to understand the nature and likely impacts of these significant technological changes; second, to develop flexible long-, medium- and short-term strategies and plans to accommodate them based on available data; and third, to collaborate with line and human resource managers, outsourced and in-sourced service providers and (where appropriate) unions in order adapt their organisations to these new realities*.
The gig economy
In many ways, the rise of the gig economy represents both a return to the pre-first industrial revolution era and a transition to the new post-fourth industrial world of work, made possible by the confluence of new technologies; the decline of adversarial industrial relations traditions and practices; and perhaps most importantly, the working preferences of Millennials. The 'gig economy' refers to an economic system that uses digital platforms to connect workers with consumers and clients (Harris, 2017). It has been predicted that more than 7.6 million US individuals will be involved in the gig economy by 2020 (Sharpe,2015), with similar proportions in the Australian labour market in well-known companies such as Deliveroo, Uber and Uber Eats, amongst many others. A recent Australia Human Resource Institute (AHRI, 2017) provided a representative management perspective:
‘With that gig economy and people working in different ways and different locations, flexibly, working from home, all of that, how do we coach our managers to be able to facilitate that and make sure that we’re still keeping track on that performance because we still need our people to perform and have the right output?’
The study further suggested that only 11% managers were well-equipped to manage the employment conditions and performance outputs of their contractors. In addition, there has been considerable social and political unrest about the status of gig economy workers and their access to reasonable employment protections.
Millennials, or those employees born in the late 1980s or early 1990s (often also called Generation Y) have been broadly described as ‘digital natives’ as they are children of the digital age brought up with mobile phones, tablets and the Internet. While it is a relatively crude and unreliable classification, the technological familiarity, fluency and literacy they bring to their employment seems to be reflected in their attitudes to work, their skills, job preferences and motivators. Thus, they are likely to be more comfortable and flexible with the new technologies associated with Industry 4.0, more educated than their forebears, more flexible with respect to how and when jobs are conducted, more motivated by intrinsic than extrinsic factors (especially work-life balance, challenging projects, teamwork), clearer and more demanding about their individual benefits and responsibilities.
For example, Millennials generally prefer jobs which require highly-developed skills; crave ongoing performance feedback, flexibility, autonomy and personal development; and are more amenable to project work such as provided by the gig economy. They are also considered to be keen to work for companies which reflect moral and ethical values such as environmental responsibility, social equity, diversity, corporate social responsibility and poverty amelioration, amongst other broad global issues. The challenge, and the opportunity, for all organisations is then to develop organisational cultures which optimise their capabilities; provide learning and development opportunities; encourage autonomy, flexibility, teamwork and appropriate career options; and both intrinsic and extrinsic (individualised) recognition, rewards and benefits.
In summary then, your management mission in 2019 and beyond (should you choose to accept it) is to build organisations which can respond quickly to the above challenges by (a) embracing new technologies such as those inherent in Industry 4.0 rather than ignoring or repelling them; recognise that the gig economy will inevitably grow, and devising plans to incorporate it into your future business strategies and plans, and (c) cherish and maximise the different capabilities, competencies, skills and work preferences of Millennials so as to rejuvenate your organisational cultures, structures, systems and processes in the new world of work!
AHRI (2017), AHRI Future of Work Survey Results, Melbourne: AHRI.
EIU (2018), The Automation Readiness Index: Who is ready for the coming wave of automation? ABB).
Ford, M. (2018), Architects of intelligence: The truth about artificial intelligence from the people building it. New York: Pacht Publishing.
Harris, B. (2017), Uber, Lyft and regulating the sharing economy, Seattle University Law Review, 41(1): 269-285.
Schwab, F. (2015), The Fourth Industrial Revolution: What it means and how to respond. Geneva: WEF.
*(If you would like to contribute your perspectives to our research study, please access our link at https://rmit.au1.qualtrics.com/jfe/form/SV_2ab546uXrDaSARf and complete our confidential online survey).
Disclaimer: The thoughts and opinions expressed here are those by the contributors alone and do not represent the views of any other organisation, the forum moderator or that of Aei4eiA.
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Professor Alan R Nankervis
Professor of Human Resource Management in the School of Management, Curtin Business School, Curtin University, Australia
Alan has more than thirty years’ academic experience at three universities in Australia, and in the UK, Canada, Malaysia, Indonesia, Singapore and Thailand, together with consultancies in Indonesia, China and Thailand. He was the Director of the Sydney Graduate School of Management, Research Director and Head of HRM at Curtin University. He is currently the Chair of the Australian Human Resources Institute’s (AHRI) National Program Accreditation Committee.
Alan has published more than 150 books, book chapters, international journal articles and conference papers for publishers such as Routledge, Palgrave Macmillan, Cambridge University Press, Pearson Education and Cengage Learning; and journals including Personnel Review, Thunderbird International Business Review, Asia Pacific Business Review and Asia Pacific Journal of Human Resources. His research interests include the links between performance review and firm performance, comparative Asian HRM/Management, services management, and skills development in the Asia Pacific.
Alan’s most recent book is New Models of HRM in the Asia Pacific (Routledge), co-authored with Professors Malcolm Warner (Cambridge University), Fang Lee Cooke (Monash University) and Samir Chattejee (Curtin University).
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