In the Year 2020 . . . Workforce

As posted this past past Friday, each day this week I will be providing my take on the top 5 predictions for the year 2020 from Bob Lohfeld’s July 7th Washington Technology article aptly named 5 predictions for the 2020 market.

Today we tackle prediction number 2, the workforce.

Lohfeld’s prognostication: The workforce will be more diverse based on population shifts away from cities, and professionals will be employed in a virtual world without regard to where they reside. Baby boomers will be in their 70s and still actively engaged in the workforce either on a part- or full-time basis. New entrants into the workforce at the end of the decade are only 10 years old today. They have never seen a world without the Internet, expect the world to stream to them at light speed wherever they are, and have significant experience using collaborative software to complete projects.

Employees will work on global government projects where work is performed in virtual space and staffed by people from multiple countries brought together for their technical expertise, without regard to cultural or geopolitical backgrounds.

The workforce will be able to support the entire bid life cycle, instead of discrete segments such as proposals or capture. Technology proficiency will be mandatory, and those who are slow to adopt or resist technology entirely will face dwindling prospects.

Alright, a snappy generalization such as is warranted by Lohfeld’s prognostication regarding the future workforce in 2020 would be; In times of change, learners inherit the earth . . . while the learned find themselves beautifully equipped to deal with a world that no longer exists. Thank you Eric Hoffer!

While Lohfeld’s prediction regarding the workforce is technically accurate, its lack of depth and imagination is tantamount to the empty calories of a Three Musketeers bar . . . it tastes great but there is nothing to it.

Besides generational factors in which for the first time in history companies are employing as many as four different generations simultaneously, and the corresponding challenges this presents in establishing and maintaining a cohesive workforce (we will talk about this is greater detail later on in the post), the real issue centers on the Clark and Fourastie three (now four) sector hypothesis of how a wealthy nation’s economy evolves.

In preparing for my interview with Canada’s Minister of International Trade and Minister for the Asia-Pacific Gateway Stockwell Day, I did a considerable amount of research regarding the Buy American Policy and the repeated references to the Smoot-Stonehouse Act of 1930 which many cite as being the primary cause of the Great Depression.

Like all issues of significant complexity, there is not a linear explanation or answer that clearly illustrates a point A to point B conclusion. Multiple factors such as time, increased globalization, a weakened economy and political sensibilities can and do in fact intertwine into a convoluted landscape that for most of us takes a backseat to the basic and often difficult task of simply paying the bills and keeping a roof over our heads.

Be that has it may, the factors which influence the viability of a nation’s economy (and ultimately its workforce) are indeed very real, and obviously very important to each and every one of us. So understanding their impact on the overall economy can actually serve as a indication of future prosperity or decline.

This is where the Clark and Fourastie hypothesis comes into play.

Developed by Colin Clark and Jean Fourastie, the hypothesis includes the extraction of raw materials (Primary), manufacturing (Secondary), services (Tertiary) and knowledge-based (Quaternary).

Under a “general pattern of development,” a wealthy nation progresses through each phase. Effectively managing this progression is critical to what Fourastie referenced in his 1949 publication “The Great Hope of the Twentieth Century” as “the increase in quality of life, social security, blossoming of education and culture, higher level of qualifications, humanization of work, and avoidance of unemployment.”

While similarities with the tertiary sector are often made as they are either service-based or oriented, knowledge-based industries are incredibly important. This of course strikes at the heart of today’s post regarding the future workforce, as it is the reason why countries like the UK and India may be positioned to emerge as economic titans over the next decade.  It is also the basis for the concerns expressed by Arianna Huffington in her March 29th, 2010 article titled “When It Comes to Innovation, Is America Becoming a Third World Country?“.

Huffington; Is America becoming a third world country?

Let’s look at the United Kingdom. The Tertiary and Quaternary sectors represents the largest part of their economy, employing 76% of their entire workforce.

With India, the indigenous software engineering talent has made that country the off shoring destination of American high-tech firms, each of which have committed to investing $1 billion into its economy. The result of this boom is that India has seen double-digit wage growth for much of the 2000s. (Note: some may argue that a key part of this growth is due to the fact that wages were previously low and that for all intents and purposes had nowhere to go but up. This of course is an interesting discussion for another day.)

Conversely, the economies of Canada and the United States have to a certain degree remained dependent on the Primary and Secondary sectors.

You need not look any further than the automotive industry to see the potentially disastrous impact that an over-reliance on these sectors have relative to the impact on a nation’s economy.

In few places is the veracity of this observation better illustrated than in Central Canada, which is home to “branch plants” for major American and Japanese automobile  manufacturers.  This region of the country has produced more vehicles each year than the neighboring U.S. state of Michigan, which is considered to be the heart of the American automobile industry.

That said and even though Canada has in the past attracted manufacturers as a result of its highly educated population, lower labor costs and funded health care system, competing with shifting global manufacturing capabilities and lower cost models may be an impossible task.  A task made more daunting if you take into account the sentiments expressed by some senior auto manufacturing executives.

I am of course referring to GM’s former VP of Procurement and Supply Chain Bo Andersson’s speech at the 1st China International Auto Parts Expo in 2007 in which he stated that the “best market to sell cars and trucks in is North America, assuming you don’t produce them there.”  He also lamented the fact that GM is paying a “big number, a large number” for health care coverage for 1.1 million North American-based retirees.  (Note: here is the link to the August 11th broadcast “Intersecting Ideals: Why GM’s Supply Chain is in a State of Ruin,” in which I interview author and supply chain expert Bill Michels regarding the automotive industry and in particular GM.)

In short, the Primary and Secondary sectors are more conducive to a nation whose economy is in early development versus the mature North American economies.  The fact that according to Huffington we are falling behind in developing the prerequisite skill sets to compete in the emerging Tertiary and Quaternary sectors is very troubling.

Throwing the proverbial curve ball into the evolving workforce mix is the generational factors to which I had referred earlier, and the direct impact on professions such as purchasing.

While I must admit that I never gave much thought to the subject of generational differences in the workforce and in particular learning habits, the concept of generational divides entered my consciousness in 2008 when I spoke at a conference for a Canadian purchasing association in St. John’s, Newfoundland. (Travelogue: The hotel at which I had stayed provided an amazing view of the harbor and an actual iceberg which from what I understand, is a common sight for Canada’s furthest point east.)

It was at this conference that I sat in on a presentation by Jim Gray from Media Strategy whose session titled “The Generation Trap” was back by popular demand . . . at least that’s what was stated in the program.

During the session, Gray talked about the current day phenomena where “four generations work side by side in offices, institutions and manufacturing plants throughout North America.” This according to the speaker, “created a new workplace challenge – how to communicate effectively with the members of several different age groups.” It was really quite a fascinating 60-minutes. It was also what caused me to pay attention when Bill McAneny contacted me about his research in the area of generational learning.

I figured that as was the case with Gray’s communication challenges, similar issues might exist within the realms of learning – especially in terms of the increasingly diverse, and as Tim Cummins pointed out, globalized market.

In researching these as well as other questions which were posed to Bill McAneny on a segment on the PI Window on Business, there was definitely no shortage of reference material. This included Neil Howe’s and William Strauss’ Millennials Rising: The Next Great Generation, a book that was originally published in 2000, and to which one critic referred to as being “familiar territory rehashed, and the profiles and prophecies just too general . . . but it’s hard to resist this hopeful vision for our children and the future.” Sounds somewhat similar to IACCM’s Cummins’ remarks.

In his research, McAneny takes the Howe-Struass communication concept one step further in terms of learning, with the introduction of Generation Z who in the Contracting Intelligence October 19th blog post “Generational Learning: What is the Impact on the Purchasing Profession?,” were referred to as being “digital natives,” and an “introverted generation, with a lower attention span.” A kind of Reality Bites meets The Net mindset.

So what are the differences if any relative to how generations learn and interact, and how does it impact us in the real world in terms of increasingly blended workforces? Of even greater interest, how does it impact the purchasing profession and in particular contract negotiation?

One question in the context of Tim Cummins’ September 1st, 2010 post “The Power Of Negotiation” in which he provides the following feedback regarding one of my articles would deal with the issue of truth in the negotiation process:

“While broadly agreeing with the point that unprincipled negotiation will lead to disappointing results, I regret that I do not entirely share Jon’s perspectives on the question of lying. Sadly, this is not so much to do with the negotiators in sales or procurement – it comes from the top. For example, in its recent paper ‘A Conspiracy of Optimism’, the International Center For Complex Project Management identified the ‘conspiracy’ that leads executives on both sides of the table to ‘lie’ to their trading partners and to create a combined version of ‘the truth’ that leads to mutual delusion over what they can achieve, by when and for how much. Indeed, how truthful are any of us when we are seeking to impress someone with whom we want a deal or a relationship?”

Taking into account the optimistically bright view of the Howe-Strauss Y Generation, and the sullen isolationism of McAneny’s “Z” crowd, are lessons relative to negotiation going to remain constant re can “Y” learn to lie and, would “Z” even care?

Collectively questions surrounding the impact of how a nation’s economy develops and the manner in which multiple generations participate as part of the emerging global workforce are infinitely more interesting and meaningful than the accurate yet perfunctory prediction by Lohfeld as they demand real versus anecdotal answers.  Sorry Mr. Lohfeld.

Tomorrow’s post: Process

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Tagged: 5 predictions for the 2020 market, Arianna Huffington, bill mcaneny, Bill Michels, Bob Lohfeld, Clark and Fourastie, Is America Becoming a Third World Country?, Millennials Rising: The Next Great Generation, Neil Howe, Stockwell Day, The Generation Trap, three-sector hypothesis of industry, Tim Cummins, When It Comes to Innovation, William Strauss

Posted in: Commentary, Procurement Trends, Professional Development