Virtual Team Technology

More change ahead as workers move into Knowledge Economy

Mike Meyers
Star Tribune
04/11/1999

If anything is clear, peering into the future of the American workplace, it is that the continued rise of service jobs at the expense of manufacturing work is not going away.

Projections for the fastest-growing industries in Minnesota may not say it all, but they say a lot.

Nine of the top prospects for new jobs can be found in the service industries -- an eclectic compilation that includes computer services, teaching adults and children, caring for the elderly and drawing plans for new homes and buildings.

Medical instruments and supplies represent the only manufacturing industry in the top 10 in anticipated job growth, according to Minnesota Department of Economic Security estimates.

The nature of the work force has been changing, as well.

At the turn of the century, 82 of every 100 workers were male; today, women make up almost half the U.S. work force. Women's increasing participation has helped the economy grow faster without widespread labor shortages, at least until the last couple of years.

The supply of women interested in entering the work force may be near its limit, many economists believe. But the changing nature of the work force has an interesting twist for the future. Women are staying in school longer than men, which should give them advantages in the Knowledge Economy of the 21st century, experts say.

As for the death of the office in the 20th century, Minnesota job forecasters aren't betting on it.

The demand for "management" and "public relations" workers will rise by 65 percent over the decade leading up to 2006, according to state projections.

One thing is certain, said John Fossum, industrial relations professor at the University of Minnesota's Carlson School of Management: Regardless of changes in technology and productivity, the demand for labor will rise rather than fall in the decades ahead.

In the United States, and especially in Europe and Asia where birth and immigration rates are lower, the number of people leaving jobs for retirement will outpace the new entrants to the labor force.

"Japan and the West will face tremendous labor shortages over the next 40 or 50 years," Fossum said.

The inevitable result, he said, will be a big drive to get more output from fewer workers, increase the skills of the labor force and step up the introduction of new technology to aid in the task.

Deja vu?

Somehow, the future sounds familiar.

For most of the past thousand years, the nature of work changed very little. Life was marked by physical toil from sunup to sundown, in field, farm or cottage.

Over the centuries, people most often ate what they killed, reaped what they sowed and wore what they wove.

But in the Industrial Revolution, cottage industry was replaced by a new kind of specialized organization -- factories that used energy from water, wood, coal or oil to power machinery that bent metal into myriad products. Whether a car or a shoe, the product was made the same way, a cooperative effort by people gathered in one place.

At its best, the Industrial Age created wealth that workers with little education could share. Henry Ford's pledge to pay $5 a day to assembly line workers was a phenomenon that drew thousands off the farm, and off the boats from other countries.

At its worst, the factory unleashed a new form of human oppression, ranging from child labor to the dirty, dangerous work that spawned labor unions in the early 20th century and the Third World apparel factories in the 1990s.

There are echoes of the peril and promise today.

The promise: The chance to be freed from jobs where brawn was more valued than brains. The assemly line has been in decline in the United States for more than a generation. Work more closely tied to worker skills -- the vaunted "service economy" -- now represents more than three in four jobs in the nation.

In the Knowledge Economy, the company that designs and holds the patent on a satellite telephone or a long-life car battery gets richer than the company that actually makes such goods. And a U.S. toy company that anticipates the taste of 11-year-olds next Christmas will become a hit on Wall Street. But no one will know the name of the company whose factory in the People's Republic of China turns out the toys by the boat load.

Nevertheless, the Knowledge Economy fails to get universal applause.

Computers' value

For instance, there are major questions about how much computers have contributed to work-force productivity. While early big-budget projects such as the transcontinental railroad and the spread of telephones took decades to be recognized as winners, the computer is taking at least as long, said Stephen Roach, chief economist at Morgan Stanley Dean Witter.

From 1987 to 1997, corporate America invested $1.5 trillion in computers and related technology, Roach said, but he has doubts about whether computer investments have paid off.

"I am the first to concede that the jury is still out on the service sector's technology bet," he wrote in a recent report to investors.

Or, as Robert Solow, a Nobel laureate economist at the Massachussett Institute of Technology, said in a widely quoted quip: "You see computers everywhere -- except in the productivity statistics."

The peril implicit in new technology: Any newfound freedom for workers could include hidden shackles.

The rise of the decentralized personal computer and the decline of the centralized mainframe eased fears of an Orwellian "Big Brother" watching a worker's every move. But, as it turns out, a company that tethers together personal computers in a network can monitor every keystroke made on a desktop -- from e-mails to mom to downloads of Dilbert cartoons.

The same technology can measure the output of sales reps taking classified advertisements, the number of tickets booked by an airline reservation agent or the dollar amount of pledges garnered by telephone fund-raisers.

Meanwhile, the kind of large-scale return to cottage industry that some experts predict, where people can work at home without a boss or a time clock in sight, is still beyond the horizon.

Accountants doing tax returns from mountaintop retreats remain as rare as traveling sales reps calling on customers by videophone. Indeed, rather than dispersing work to homes, much of the evidence suggests that technology has increased the pressure on workers to share the common space.

On a recent visit to Sun Microsystems, in California's Silicon Valley, Fossum, of the Carlson School, found the employee cafeteria stocked with well-prepared food and open at all hours. The idea is to keep workers in the building, rather than stuck in lunch hour traffic jams, he said.

Twin Cities skyline

Witness the changing skyline of the Twin Cities in the past 30 years. In the same era when technology has created the means of liberating workers from their desks, office construction has skyrocketed.

While factories once sprawled for acres in low-rise horizontal buildings filled with parts and finished goods, vertical office buildings now spring up, filled with ever-expanding ranks of white-collar workers, with computers tying them to the rest of the world and work cubicles linking them to one another.

To a degree, the workers may like it that way.

Economist John Schmitt says a study discovered that most of the New York City graphics designers using high-end computers for their work live within a mile or two of one another -- an area represented by only two postal ZIP codes.

"They like to see each other and talk to each other," Schmitt said. They, and others like them, seem to value an exchange of ideas more than the freedom to live 1,000 miles away from their company headquarters.

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