CHAPTER 2

Why the Jobs of Tomorrow Won’t Be Like Those of Today

If you are looking for a career where your services will be in high demand, you should find something where you provide a scarce, complementary service to something that is getting ubiquitous and cheap. So what’s getting ubiquitous and cheap? Data.

—Hal Varian

Google Chief Economist

Nobody can predict the future with any degree of certainty. One thing, however, is certain: The jobs of the future will not be the same as those of the past. To understand why, you have to first look back to the past—and then forward into the future.

Redefining U.S. Jobs

Like other countries, the U.S. economy is in a continual state of flux (see Figure 2.1). While the U.S. economy began as an almost exclusively agrarian economy, it began migrating to a manufacturing or product-based economy in the 1800s. This segment of the economy, however, peaked in about 1950, at which time services accounted for over half of all workers—a percentage that continues to surge.

Agriculture—the industry around which the country was built—now produces far more output than any time in its history, but employs just above one percent of all U.S. workers. Manufacturing employment, meanwhile, has been plummeting since its high point in the early 1950s. This sector, however, is beginning to pare some of its losses due to factors including international economic trends (exchange rates, wages, productivity, shipping costs, and so forth) and the emergence of advanced manufacturing.

Although both industries are subject to competition from imports, exports have helped shore up domestic agricultural employment by producing a trade surplus of more than $30 billion. Manufacturing hasn’t fared as well. Virtually all low-value and much of mid-value manufacturing, and even some of the most sophisticated manufacturing processes have moved offshore, primarily to lower cost countries. This is attributable to a combination of factors such as wages that have been an order of magnitude below those in the United States, the rapid growth of foreign manufacturing powerhouses (like Toyota and Samsung), and huge contract manufacturing companies (such as Taiwan’s 1.2-million employee Foxxconn, which assembles products for many of the world’s largest electronics companies).

And what about the talk of a U.S. manufacturing renaissance? The country is likely to see some growth in manufacturing as offshore wages increase relative to U.S. wages, shipping costs increase and as products (such as nanotechnologies and biotech products) become more sophisticated, and new technologies (more functional robots, 3D printing, etc.) both limit the demand for and dramatically increase the skills required by newly hired workers.1 And don’t forget fracking technology, which is directly increasing the need for energy industry workers and indirectly making U.S. manufacturing more competitive (due to a combination of lower fuel prices, reduced fuel transportation requirements, and lower priced petrochemical feedstock).

On the positive side, both the U.S. agricultural and manufacturing sectors will almost certainly continue to grow in dollar revenues. Although the number of agricultural workers will continue to fall, the absolute number of U.S. manufacturing jobs will increase over the next several years. This increase, however, will be from the depths of the Great Recession. After falling during and never really recovering from the 2001 recession, U.S. manufacturing payrolls then fell by another two million employees (15 percent of its total workforce) during the last recession.2 Gains, however, will be relatively small, and both industries will account for smaller and smaller shares of the total U.S. workforce.

The skills required of these workers will also change dramatically from those required of traditional farming and factory floor workers, where jobs are being redefined by technology (equipment and, increasingly, software and online services in both sectors, plus chemicals in agriculture) and international competition (which is helping agriculture as a result of increased foreign demand, and hurting manufacturing through the offshoring of jobs).

While many of the physical requirements necessary for agricultural jobs have been greatly reduced, those who hope to do more than earn a very basic living from farming must now be as much scientists and financial managers as they are farmers. The fate and changing skills requirements in manufacturing, meanwhile, are generally summarized by the wry joke about modern textile mills: they now employ only two workers, a man and a dog.3 The man is there to feed the dog, and the dog is there to keep the man away from the machines. Today’s manufacturing workers also need very different skills. Requirements for strength, the willingness to follow simple orders and to endure hours of mind-numbing manual labor are out. Today’s shop floor workers must be computer programmers, be able to anticipate, diagnose, and address diverse problems, and engage in dialogs with management as to ways to improve processes.

The U.S. as Service Economy

Regardless of what happens to agricultural and manufacturing employment, the U.S. economy is rapidly evolving into a service economy—
86 percent of all U.S. workers are in this area and it is growing.

But what is a service economy? What’s the meaning of a category that includes everybody from dishwashers to neurosurgeons? Everything from a taxi ride to buying a NetFlix subscription.

Since the term “services” is so inclusive, let’s divide it into segments to help understand what service jobs are and what opportunities they provide for you.

The Bureau of Labor Statistics (BLS) divides this huge market into 13 industry-based sectors. Its most recent compilation shows that government and retail/wholesale workers account for the largest slice of this service pie, with each accounting for more than 20 million jobs and 20 percent of the total U.S. workforce.4 These groups are followed by professional and business services, healthcare, leisure and hospitality (each of which employs more than 10 million people), and so forth.

More interesting than the numbers, however, are the trends among the various sectors. Just as the overall economy has undergone a long-term shift among different segments (among agriculture, manufacturing, and services), so has the service economy. In the early days of the country, the service industry consisted overwhelmingly of retail jobs. Segments such as government, finance, healthcare, and professional services were generally little more than rounding errors. Today, retail accounts for less than 13 percent. A 2012 article in The Atlantic looked specifically at the changes in employment in a number of segments over a recent 60-year period (1947 through 2008).5 Although their numbers do not quite correspond with U.S. BLS figures, the trends are dramatic and telling (see Table 2.1). Some segments experienced phenomenal growth, while some services—especially retail/wholesale and transportation—experienced big declines in their roles in the overall U.S. economy. Clearly, the rising services tide has not raised all boats.

Although all segments, other than transportation and retail/wholesale, have increased their percentage of the overall economy, a lot has happened since the 2000 recession, and especially since the 2008 Great Recession and its slow-motion recovery. Different service segments have fared very differently during this period. LinkedIn, for example, partnered with the U.S. Council of Economic Advisors to use its own data to assess the number of jobs gained and lost in a range of very diverse and highly specialized industry subsegments, ranging from newspapers to renewable energy. As shown in Figure 2.2, the two most recent recessions have produced some big winners and some big losers.6

The New York Times, meanwhile, examined the numbers of jobs gained and lost since the onset of the Great Recession, looking not only at the numbers by industry, but also by salary. The greatest percentage gains were concentrated in a number of expected fields (such as IT, healthcare, oil and gas exploration, consulting) along with some more surprising ones (pet grooming, sports promoters, and real estate property management). So too with the greatest percentage losers (construction, manufacturing, government, financial services, publishing sectors, architecture, and so forth).7

Some of these segments accounted for huge numbers (as well as percentages) of job gains (especially in healthcare, IT, and oil and gas) and losses (as in construction, manufacturing, government, and financial services) . The greatest absolute number of job gains, however, were in low-paying jobs, such as in home healthcare, temporary help and the largest of all, restaurants, and especially fast food restaurants. These are among the lowest paying of all U.S. jobs. The greatest number of losers, meanwhile, are, as will be specifically discussed below, concentrated in traditionally mid-skill, mid-pay occupations (especially construction and manufacturing). Many of these jobs are unlikely to ever be recovered.

As instructive as such analyses are, a true understanding of the dynamics of the jobs market requires deep analysis of smaller industries and subindustries. Consider manufacturing. Although most manufacturing segments have taken a beating during and after the recession, some segments have done quite well. While mining and other extractive industries took big initial hits, they have rebounded sharply, far surpassing their prerecession employment levels. Renewables and environment, meanwhile, produced a significant number of jobs and enjoyed, by far, the fastest percentage employment growth of any goods-producing sector.

The same types of disparities can be seen in services. Employment in some service industries, such as food service, leisure and hospitality, government, retail, construction, financial services, and government, has suffered the most during the recession. Some, such as food service and leisure, have rebounded nicely, surpassing their January 2008 levels. Others, like retail, financial services, construction, and government, have not come close to recovering their losses. Meanwhile, jobs in fields such as computer programming, nursing, business and environmental consulting not only did not decline but also have steadily increased employment during and after the most recent recession.

The Bureau of Labor Statistics, which pulls together the data from which all such historic analyses are based, also attempts to project employment trends into the future.8 It breaks estimates down not just by industry, but down to specific job titles (currently 580 of them). It projects the number of new positions that are likely to be created (currently through 2022), the median pay of these jobs, and the education and experience that are required for these jobs.

Such industry and subindustry breakdowns are, as discussed in Chapter 5, particularly valuable to those planning their careers. Since they show you not only where the jobs are today, but where they are likely to be tomorrow. It is, after all, much easier to get a job and build a long-term career in an industry that is actively looking for people than in one that is contracting. Growing segments also provide greater opportunities for promotions and raises than do slow-growth or declining industries. Plus experience in a rapidly growing industry can significantly increase your potential for finding new jobs in other companies, not just those in that industry, but in those that contribute to, service, or use that industry’s products or services.

This doesn’t mean that you can’t get a job in a declining industry. However, you must understand that your prospects of landing a position, your salary, and your future job prospects will probably be more limited than in a growing industry.

The Growing Skills and Pay Chasm

This type of industry-based view can certainly provide you with a valuable perspective on where the jobs of the future are likely—or unlikely—to be. Each industry, however, consists of hundreds of different jobs. A bank may have tellers, financial advisors, loan officers, investment bankers, financial analysts, IT specialists, janitors, and hundreds of other positions. Although you certainly want to know whether your specific target industry is likely to offer employment opportunities, you also have to understand which types of jobs in this industry offer the best employment prospects, growth potential, salary growth, job security, and so forth. This requires you to look at growth prospects of not just an industry but also of specific occupations. These prospects are changing in much more subtle, but in even more dramatic ways.

In the past, the job prospects, compensation, and job security offered by different occupations—from unskilled manual labor through ultra-high-skilled creative work and even corporate executives—fell on a rather steady continuum. This is no longer the case. The traditional distinctions, not to speak of the salaries, the benefits, and even the future existence of entire classes of jobs are growing into chasms.

Before getting into the prospects for individual jobs, it’s important to understand the nature of this divide and why it is occurring. Consider, for example, the very high-level distinctions among three classes of jobs:

1. High-skill/high-pay jobs, the top of the labor pyramid is occupied primarily by university and graduate school-educated professionals with specialized knowledge-based skills, such as business managers, executives, engineers, doctors, and lawyers.

2. Middle-skill/middle-pay jobs, the foundation of the middle-class economy consists of traditionally relatively well-paying and secure blue-collar jobs (such as construction and manufacturing) and white-collar jobs (such as office administrators and mid-level office managers).

3. Low-skill/low-pay “commodity” jobs, such as fast-food clerks, hospital orderlies, and security guards, typically employ lesser educated workers, generally require little training, and provide low pay and limited job security.

Each of these segments was relatively large and rapidly growing from post-World War II through the 1980s. All was well, or so it seemed.

The U.S. job market, however, was at the cusp of a fundamental transformation. The broad, multitiered job market in which people of virtually every type and level of education, skill, and talent could find a job had begun to disappear.

A 2010 study by MIT economist David Autor and the National Bureau of Economic Research (The Polarization of Job Opportunities in the U.S. Market) examined the nature and implications of this change.9 The authors divided the U.S. labor force into 326 occupations based on required skill and education levels. They then examined how the number of jobs in each occupation changed over a 40-year period. Although growth rates varied greatly year-by-year, the number of low-skill/low-pay jobs and high-skill/high-pay jobs both grew far more rapidly than that of mid-skill/mid-pay jobs (see Figure 2.3).

Then came the 2001 and 2007 recessions. These downturns, combined with the four key structural trends discussed in Chapter 1 (automation, globalization, flexible hiring, and unpredictable volatility), exacerbated these employment trends. While the overall number of most low-skill jobs (with the particular exception of home and healthcare aides, both of which grew dramatically) and high-skill jobs remained relatively stable between 2008 and 2010, increasingly routinized mid-market jobs—both blue-collar and white-collar—plummeted 12 percent.

The differences among job categories are echoed in these broad trends. Skilled trade, management, professional, and technical jobs have either held their own or grown slightly through and after the recession. The lower skill service jobs on the right-hand side of the chart also held their own. Mid-skill sales, administrative, production, and laborer jobs, meanwhile, were decimated by the recession and have recovered little during the slow recovery.

Wage growth between 1980 and 2005 (pre-Great Recession) showed a very different pattern. Average, inflation-adjusted hourly wages for high-skill/high-education/high-pay workers surged by almost one-third. Hourly wages for low-skill service workers grew at half that rate—
16 percent. Mid-skill categories again pulled up the rear, with machine operators and assemblers earning only six percent more. The wages for production and craft workers actually declined by four percent!

The recession hit the low- and mid-skill workers particularly hard as consumers cut back on discretionary personal service purchases (haircuts, restaurant meals, etc.) and as business investment slowed. Many laid-off mid-skill workers, not to speak of jobless college graduates, were forced into competition with lesser skilled workers for low-pay personal service jobs. The result: A sharp bifurcation of the U.S. labor market.

The Great Bifurcation

The Great Recession, especially when combined with the rapid growth in the automation and globalization of jobs, exacerbated the bifurcation process. Those who traditionally performed mid-skill jobs face the biggest and most jarring dislocations. Low-skill workers face the most pain.

The vast mid-market, in which millions of moderately skilled high school and college graduates had built rewarding life-time careers, is under siege. True, the number of such mid-market jobs will certainly grow as the cyclical recovery progresses. The problem is: the four big structural trends—automation, globalization, flexible hiring, and unpredictable volatility—promise to keep a tight lid on both the pace and the extent of the mid-tier jobs recovery. They will also keep a lid on the compensation and the security these jobs offer.

What will happen to those mid-skill/mid-income blue-collar and white-collar jobs that formed the foundation of great American middle class?

That future is already playing out. Even as the economy begins to recover, globalization (offshoring) and technology (i.e., automation) will simultaneously:

• Eliminate large numbers of routine, relatively low-discretion jobs; and

• Dramatically increase the skills required to perform the remaining available jobs, while dramatically reducing the number of workers needed to perform those jobs.

Think of how computer numerical control (CNC) machine tools eliminated the need for millions of assembly line workers and created new demands for computer-literate, numerically proficient operators. And, while some manufacturing jobs will return to the United States (although the vast majority will not return), the education and skills required for these jobs will be much greater than those for the jobs that had been lost. A 2014 Brookings Institution study, for example, found that while there only 0.2 job openings for every unemployed production worker, many companies still cannot find sufficient numbers of workers with required technical skills.10 This need for STEM skills in manufacturing will only increase. Ford Motors, for example, claims that its most critical employment needs are in software and systems engineering. No surprise since cars are essentially becoming computers. The Chevy Volt, for example, currently runs on 10 million lines of code—2 million more than the F-35 fighter jet.11

Technology will, as discussed below, similarly eliminate, create and reshape jobs in hundreds of other mid-skill blue-collar occupations, from quality assurance inspectors to truck drivers over the next couple of decades.

The same forces are affecting mid-skill/mid-pay office workers. For example:

• Secretaries, bookkeepers, switchboard operators, and proofreaders have already lost their jobs to automation (as in the form of word processors, spreadsheets, and voice messaging systems); and

• Accountants, financial and marketing analysts, and even some lawyers have had to learn entirely new skills to deliver value atop that now provided by computers (such as tax preparation software, web-based analytics, and e-discovery software).

Meanwhile, millions of mid-level office jobs, such as accounts payable/receivable, account reconciliation, and computer programming, are increasingly being partially automated. Many of those that are not automated are being moved offshore to be performed by much lower cost, and in some cases, better educated workers. Just as importantly, some of those nonroutine jobs that cannot be effectively automated or offshored are being outsourced to specialized domestic companies (who use fewer, more-skilled people to perform tasks for multiple clients) or to freelancers who are retained and paid (usually with no benefits) by specific assignment, rather than by secure, long-term employment.

Even mid-level supervisory and middle management jobs are being slashed as companies restructure work and flatten their organizations. This reduces the number of management layers and, therefore, the number of necessary supervisors and mid-level managers. It also changes organizations from traditional hierarchical command and control structures to more flexible organisms based on self-managing and, in some cases, virtual (consisting of members from multiple locations) and continually redefined teams.

As if these private-sector job losses weren’t bad enough, these displaced workers have been joined by millions of government employees and educators who fell victims to government spending cuts.

But not all mid-skill jobs will disappear. As David Autor and David Dorn explain in their August 25, 2013, New York Times article, How Technology Wrecks the Middle Class, we will always need a number of traditional mid-skill workers—building contractors, finish carpenters, electricians, plumbers, automotive technicians, customer service representatives, and so forth.12 Many new mid-skill jobs, especially in healthcare (medical assistants, all levels of nurses, and therapists), education (teachers, tutors), and artisan professions (artists, jewelers, chocolate, and cheese makers), will be created.

Many of these jobs, however, will require new technical skills and continual learning to keep up with changes that will reshape these jobs much faster than in the past. They will also require workers who take more initiative, are more self-directed, have better communication skills, and are more collaborative and more accountable than ever before. They must also understand how different organizational functions work together and often must be able to perform a broader range of higher level functions. Harvard labor economist Lawrence Katz, in an effort to emphasize the difference between these mid-skill professionals and the mid-skill workers of the past, calls these people the “new artisans.”13

In the end, large swaths of mid-skill, middle class jobs will disappear. These are primarily those based on routine mental and physical tasks in which the people stay in one place, such as at a desk or an assembly line station and with the advent of autonomous self-driving cars and trucks, even at a steering wheel. Those mid-skill jobs that require significant amounts of mobility, hand–eye coordination, empathetic human interaction, artistic expression, and discretionary decision making are less likely to be automated or outsourced.

This being said, opportunities will continue to exist, and will probably even grow, for many of the previously mentioned mid-skill craft workers and new artisans, for many types of teachers, virtually anyone in healthcare and for many business managers. This will be particularly true for those equipped with the self-management, communications and technology skills that will be increasingly required in all these jobs.

Most of these new jobs will require some form of postsecondary education. The Center of Education and the Workforce at Georgetown University estimates that two-thirds of all jobs that will be created in the U.S. will require some postsecondary education.14 These jobs, according to the BLS’s Occupational Handbook, will include 18 of the country’s 25 fastest growing occupations (those expected to grow 30 percent or faster through 2022).15

Three of these 18 high-growth occupations (information security analysts, interpreters, and event planners) typically require a minimum of a bachelor’s degree and eight others (genetic counselors, industrial psychologists, audiologists, etc.) require graduate degrees. However, the other seven (especially nurses and other medical technicians and assistants) typically require only an Associate’s degree or some other form of postsecondary credential. The majority of these high-growth fields will require far more technical or other highly specialized training, problem solving and complex communication skills, and much more individual initiative than was the case for traditional mid-skill jobs.

High-percentage job growth is one thing. The high growth in the actual number of jobs is another. A different cut at the same BLS databases shows 25 occupations that are expected to add a minimum of 50,000 new jobs (not to speak of the need to replace retiring baby boomers).16 Most (15) of these are lower level, low-pay services jobs that require only high school degrees or less. This is as would be expected since the number of jobs in a particular occupation is typically inversely related to the job’s level of pay. There all, for example, millions of retail sales clerks, but only a handful of cardiac surgeons.

This being said, six of the remaining high-growth occupations (especially different types of teachers, accountants, and business and IT managers) require bachelor degrees and the remainder (teacher assistants, hairdressers, and tractor–trailer drivers) require some level of college or postsecondary certificate.

A number of these degree-level (from Associate to Graduate) jobs, plus a number of others that require apprenticeships, not only offer strong employment opportunities but also provide psychic rewards, such as helping individuals, giving back to society, engaging and challenging work, and, in a few cases, very good pay. Nurses, for example, earn an average of almost $70,000 per year.

Then there are the types of high-skill advanced manufacturing jobs for which employers are finding it impossible to find sufficient numbers of qualified candidates. These positions include tool and die makers, precision welders, and industrial machine mechanics. And don’t forget the most in-demand manufacturing job of all—CNC machine programmers and operators: an associate or trade school degree-level job that often starts at over $50,000 per year plus benefits. Nor are such jobs unique. BLS expects technology-focused mid-skill jobs to grow by 17.5 percent from 2010 to 2020—about the same rate as high-skill jobs.

The Plight of Low-Skill Workers

Although many high-growth high- and mid-skill jobs offer opportunities for fulfilling work, job security, and good pay and benefits, the same can’t be said for the vast majority of low-skill jobs. True, the demand for many such workers is growing and there will be particularly strong demand in some large and high-growth areas such as retail, hospitality, office support, and, especially, all segments of healthcare. The vast majority of these jobs, however, will offer very low pay, few or no benefits, limited opportunities for advancement, and little job security.

Even worse, lesser educated entrants into the labor force will face growing competition from two new classes of higher skilled competitors who are forced to take lower skilled jobs. These include:

• Traditional mid-skill workers who lose their jobs, can’t qualify for or find comparable positions, and are forced to take lower skill, lower pay positions; and of course

• College graduates who don’t have the types of skills which employers seek to fill mid-skill positions.

On one hand, these people are becoming the new-generation of low-skill workers by default. As such, they will face many of the challenges of their less-skilled, less-educated counterparts. On the other hand, these people (especially young college grads) will have a big advantage over, and find far more opportunities than, their less-educated, less-experienced counterparts. As we have seen since the recession, they are often more favored in hiring, are given more responsibility more quickly, and are favored for entrance into store or branch management training programs. In other words, many can potentially work into the type of mid-skill, mid-pay jobs from which they were precluded upon graduation or after being laid off from their previous jobs.

This will leave many unskilled high-school graduates in an even worse position than they were in before as they face greater competition in being hired and fewer opportunities for advancement.

High-Skill Professions: A World of Possibilities

There’s no question: high-skill professions have the potential of providing you with some of the best employment prospects and greatest opportunities for both financial and psychic rewards. They will also provide you with some of the best opportunities for differentiating yourself on the basis of your talent or unique focus and will give you an opportunity to shape your own destiny and gain control of your own fate.

Sounds good, right? But what are these “high-skill” professions and what are their employment prospects?

Unfortunately, there is no single answer as the range of high-skill professions is huge. They run the gamut from data scientist to psychiatrist, and from fashion designer to professional athlete. Some may require a PhD; others a high-school degree, talent, and practice. Just as importantly for purposes of this book, their employment prospects, their salary ranges, and their long-term viability each range from wonderful to terrible. For example:

• Medical doctors, after eight years of postsecondary education (and probably hundreds of thousands of dollars in tuition, and usually debt), plus another four years of on-the-job training (internships and residency) will almost certainly find a job. Employment prospects, pay, and even job security, while generally good, vary greatly by specialty and location.

• Highly skilled software designers (especially those in high-demand fields such as mobile computing, wireless communications, and data analysis and visualization) will have their choice of well-paying jobs, or may even start and sell their own multimillion dollar company—even if they don’t have stellar academic credentials.

• Artists and athletes may have the potential of earning huge amounts of money doing what they love. But if they aren’t superstars (or at least stars), they may not even be able to get a make a living in their field.

True, not everybody can become a cardiac surgeon or a professional athlete. Yet it is possible to build a rewarding (both financially and psychically) career in virtually any high-skill field you can imagine. Who would have dreamed that you could create a global brand and lucrative career around the art of splashing paint on a canvas (abstract expressionist painter Jackson Pollock), by selling coffee at 10 times the price of other outlets (Starbuck’s Howard Schultz), or by reconceiving how people interact with computers, play music, or perceive telephones (Apple’s Steve Jobs)?

Virtually anybody with an idea, perseverance, and some basic combination of conceptual, creative, and interpersonal skills has the potential of building a rewarding career. No, you probably won’t end up creating your own billion-dollar corporation. The vast majority of determined, high-skill individuals, however, can build solid, well-paying, and enjoyable careers (and possibly make a fortune to boot) with a combination of passion, planning, skills, and perseverance. You can build these careers around virtually any type of skill or any type of vision. You can build them within an established company, by operating as an independent contractor or consultant, or by creating your own company around your own unique value proposition.

But whichever course you choose, building a solid, high-skill 21st-century career won’t be easy. It will require planning, preparation, and hard work—and the communication and interpersonal skills required to sell yourself and your value proposition; the resilience to bounce back from and the adaptability to learn from setbacks; and the perseverance to stick with it.

The bad news is that the vast majority of even college and graduate degree holders will face additional challenges. First, only a small percentage will begin their careers with the advantage of graduating from a top university or having a family with the type of connections to help get a high-potential position right out of school. And, as explained by professors Eric Brynjolfsson and Andrew McAfee in The Second Machine Age,17 the rewards of today’s workplace are already heavily skewed in favor of three classes of people—and against three others:

• Those who provide capital have the advantage versus those who provide labor;

• Those with unique, high-value skills versus those with lower and more commoditized skills; and

• Superstars with incredible talent, luck or both, versus everyone else.

The good news is that some of the very technologies that are destroying or transforming today’s jobs are creating new opportunities for re-leveling the playing field.

For example, it’s true that few people have immediate access to the capital traditionally required to build a business (much less to live off the investment income). But, as mentioned in Chapter 1, new technologies and online services have slashed the amount of money required to launch a new business, globalization allows you to build a virtual company and tap a global market, and more flexible hiring practices make it easier for contractors to sell services to large corporations. And if you do need more funding, new tools, such as microlending and crowdfunding, provide access to capital. As discussed in Chapter 8, you can even find someone willing to finance your education in return for a portion of your future earnings. And as discussed in Chapter 9, at least one entrepreneur will even fund your decision to drop out of school to start your own company—without even taking a single share!

Meanwhile, people now have many new and lower cost options for developing the type of high-value skills that are required to succeed. You can certainly learn them in traditional colleges and universities or apprenticeship programs. But a growing number of new alternatives for learning new skills or enhancing or updating existing skills are popping up such as taking online courses (so-called MOOCs), enlisting in a wide range of specialized boot camps, and increasingly earning certifications that demonstrate your mastery of these skills.

But what about becoming a superstar? How many people have the combination of skills and luck that is required to become a LaBron James, a Lady Gaga, a Mark Zuckerberg, or even a Barrack Obama? The good news is that you don’t have to be a superstar to build the career of your dreams. Virtually any skilled and determined professional with the required combination of imagination, perseverance, and resilience has the potential of building a stable and rewarding career around his or her dream.

As will be discussed throughout this book, specialization will be one of the keys to success in this new era. This, however, isn’t necessarily the type of hyper-specialization that we have seen over the last several decades, where an individual focuses on narrower and narrower niches within a sub-discipline. After all, most of today’s most vexing problems (world hunger, climate change, income inequality, and so forth), and their solutions, span multiple domains. The most promising form of specialization may well be interdisciplinary—the integration of two or more types of complementary disciplines (think, for example, of economics and psychology or power plant engineering and environmental science), such as where content, principles, and methodologies from traditionally distinct disciplines are combined and applied in new ways. Think of it as a kind of macrospecialization, versus the type of microspecialization that has become so common.

Virtually everybody now has the potential to develop some type of unique, specialized skill that will provide value to someone who is willing to pay for it. The trick is to identify and fully develop your particular skills, align them around a specific market need (either an existing need or one that you create), and establish yourself as the preferred and widely recognized provider of that type of unique value. And, perhaps, you can even figure out a way of aligning all of this around your own particular passion.

Sounds like a lot of work? It is. But as they say, if it were easy, everyone would do it.

The Offshoring of High-Skill Jobs

Chapter 1 identified globalization (which includes, but is not limited to offshoring) as one of four fundamental trends reshaping the U.S. jobs market. While the current and previous chapter focused primarily on the trend’s impact on low-skill and mid-skill jobs, they only tangentially mentioned some of the ways in which they will affect the jobs of high-skill professionals.

This is absolutely not to suggest that offshoring will play a limited role in this segment of the market. On the contrary, globalization has already begun, and will continue to transform some of the world’s highest-skill jobs. It will eliminate some jobs, create others, and transform many.

Offshoring and the associated trend of globalizing corporate operations (decentralizing and spreading corporate functions out among different counties in which the company operates) are already sending a number of mid- and higher level jobs to lower wage countries. For example, as I discussed in a series of my 2010 blogs, offshoring has long since evolved from jobs that consist of standardized, repeatable processes to the offshoring of entire business processes—not to speak of the responsibility for re-engineering these business processes to facilitate their being offshored.18

In addition, many large companies have been establishing foreign operations, and partnering or contracting with specialized third parties, to move a number of high-skill functions to offshore professionals. While this began with computer programming, it has since expanded to include functions including law (as in the drafting of contracts or briefs, and discovery processes), radiology, accounting, financial, market and Big Data analysis, architecture, and the design and operation of clinical trials for new drugs. Meanwhile, many technology-intensive companies (IT, pharmaceutical, and so forth) are establishing global R&D networks in which offshore PhD-level scientists and engineers are taking responsibility not only for supporting U.S. research operations and for designing products for local markets but also for leading some global, corporate-wide research initiatives. Networking leader Cisco, for one, not only does this, but has also created a corporate co-headquarters in India.19

The offshoring and global decentralization of mid- and higher skill functions will continue. This will simultaneously reduce the number of these jobs for U.S. workers and create new opportunities for those capable of working within and managing global operations. This being said, foreign companies who are expanding their U.S. operations will help to mitigate these losses by hiring U.S. professionals to work for their companies.

But as important as globalization is, in the end, technology is likely to play a much more transformative role in reshaping high-skill jobs. As MIT’s Andrew McAfee and Eric Brynjolfsson argue in their 2014 book, The Second Machine Age, offshoring prompts the re-engineering of business processes into smaller, more discrete tasks and thereby, makes it easier to create rules around these tasks—rules which can be programmed into computers.20 Outsourcing, they claim, “is just a way-station on the road to automation.”

Automation: The Elephant in the Middle of the Jobs Room

The entire question of technology’s role in redefining high-skill jobs, and especially in the need it is creating for high-skilled workers, is still subject to some debate. Most economists agree that the growing role of computers increased the need for high-skill cognitive workers (especially college graduates) over the last couple of decades. But, as suggested in a 2013 paper, The Great Reversal in the Demand for Skill and Cognitive Tasks, a few economists contend that these days are over.21 As they see it, computers are now ubiquitous and integrated into virtually all job functions, and the people who can program and work with them are already in place. The need for these cognitive skills, therefore, is declining. They claim that this is creating a “de-skilling process” in which the demand for college graduates is declining and forcing many into mid-skill jobs that do not make use of their skills.

It’s hard to dispute that de-skilling has occurred. It is, however, a bridge too far to link this to a reduced need for cognitive skills. After all:

• Just because a person has a college degree does not mean that they have the skills for which employers are looking; and

• The capabilities of computers, and the roles they can play in all types of job functions, are increasing so rapidly that employers will continually demand workers who are capable of capitalizing on these capabilities.

Traditional automation initiatives have largely been limited to repetitive, relatively low-value manufacturing tasks and to those administrative and low-discretion jobs that were based on the application of defined rules and processes to facts, such as the authorization of payments to suppliers and the processing of receivables. Automation of these and other low-skill tasks has come in the form of robots, ATMs, voice messaging systems, personal computers, and, increasingly, advanced technologies such as voice recognition and pattern recognition software. This, however, is just the beginning.

Automation, like offshoring, is moving way beyond these modest beginnings into a number of nonroutine (both manual and cognitive) tasks. Computers perform some tasks not only more cheaply than humans, but for some tasks, better and more reliably. They, for example, are already used to write basic newspaper sports and financial stories, perform some types of legal discovery, and have even been shown to be more effective than some experienced oncologists in detecting and diagnosing some forms of cancer.22 In some cases, they can even be more effective than humans, such as when compared to some teachers in determining exactly where a student is having problems and tailoring the lesson to that specific need.

The capabilities of these technologies, however, are expanding at an exponential rate. For example:

• Apple’s Siri is making great progress in understanding natural speech and in inferring one’s needs from previous patterns. It and other intelligent programs are already changing how we interact with banks, insurance companies, stores, and healthcare providers.

• Google’s autonomous car (which are likely to be generally available in the 2020s) can navigate traffic, avoid obstacles, and has compiled a better driving record than virtually any human on the planet. Even though it is still in trial, it has driven hundreds of thousands of miles without a single ticket. Although, these cars have been in two accidents, one was when it was being driven by a human and the other when it was rear-ended by another human driver.23 Daimler and other companies, meanwhile, have already begun testing autonomous trucks on Germany’s autobahns.24

• Rethink Robotics’ low-cost robot, affectionately named Baxter, can be “programmed” simply by moving its hand in the way that is desired. Household robots, meanwhile, can vacuum rooms while avoiding walls, furniture, and pets.

• Some new energy management25 and home security26 systems learn your habits so they anticipate your home heating needs and don’t set off false alarms. The energy system, for example, will learn and adjust temperature based on factors including your sleep patterns and room occupancy. The security system learns that you have a pet and what a pet does, or that you get up in the middle of the night to go to the bathroom.

• The Dalu Robot restaurant, in Jinan Shandong China, is developing a robotic system to cook meals and then deliver the food to the customer’s table. Momentum Machines of California is working on a “smart restaurants” robotic system that not only takes the order but then can create 360 gourmet burgers an hour.27

• The most impressive application of cognitive computing, meanwhile, has already made its television debut. IBM’s Watson—the computer system that handily beat the reigning Jeopardy champions, demonstrated its ability to not only recognize natural language but also interpret idioms, parse puns, sift through enormous volumes of data to identify clues, and then to evaluate all options to identify the most likely answer (or in the case of Jeopardy, the most likely question). And it did all of this in fractions of a second.

Watson is now moving on to more commercial endeavors. As discussed in my February 2011 blog, Elementary, My Dear Watson?, one of its first commercial implementations is likely to be as a tool to help doctors in diagnosing and in recommending individualized, best-practices treatments for illnesses—especially cancer.28 IBM is partnering with Memorial Sloan-Kettering to use Watson as a tool to help doctors research obscure combinations of symptoms, prioritize diagnostic options and present doctors with state-of-the-art best practices-based treatment options that are tailored to the individual patient.29

It is working with WellPoint to use Watson to help nurses make preapproval and utilization management decisions and with a number of financial services companies to use Watson to help financial service professionals determine which financial services are best suited to the needs of specific customers.30

In each of these cases, IBM is positioning Watson as a tool to help professionals rather than displace them. Displacement, however, is probably just a matter of time. Processing power, after all, continues to follow the course of Moore’s Law, with performance doubling about every 18 months.31 Today’s smart phones already have more power than last decade’s room-sized supercomputers. Meanwhile, the cost of memory and communication is falling even more rapidly.

Given the rapidly growing performance, not to speak of the rapidly falling prices of technology, software will become increasingly sophisticated. More importantly, the types of artificial intelligence (increasingly called “Cognitive Computing”) capabilities that are enabling Watson, Siri, autonomous cars, and intelligent robots are still in their infancy. Now that their capabilities are being proven in the market, companies and universities are pouring more money and focusing more resources into enhancing current and developing new capabilities. In January 2014, for example, IBM announced plans to invest $1 billion in its Watson program.32

Not only are computers gaining more “intelligence,” they also have access to and are capable of analyzing the implications of far more data than humans. These “Big Data” capabilities will dramatically improve their ability to perform functions including analyzing biopsies, prioritizing investments, developing web-based marketing programs, developing and tracking budgets, and identifying tax strategies.

Opportunities and Risks for High-Skill Workers

How far are computers capable of going in performing high-skill tasks? Which jobs are the most and least susceptible to being performed by computers? Two Oxford University professors examined exactly this question in a 2012 study, The Future of Employment: How Susceptible Are Jobs to Computerization?33 They calculated the prospects of automation for more than 700 occupations and have labeled roughly 47 percent of total U.S. jobs (the vast majority of which are low- and mid-skill) as “at risk”—or having the potential of being automated over the next decade or two.

McKinsey Global Institute anticipates similar scale disruptions. Its May 2013 report, Disruptive Technologies: Advances that will transform life, business, and the global economy, anticipates that by 2025 robots may replace 40 to 75 million industrial workers and that the automation of knowledge work could displace an additional 110 to 140 million jobs worldwide.34

Marc Andresson, creator of the graphical web browser and now venture capitalist, looks beyond the automation of individual jobs to the automation of entire industries. In an ominously named 2011 essay, Why Software Is Eating The World, he contends that software, especially in the context of Internet services, will continue to disrupt more and more industries and overturn more established industry structures.35

What does all this mean for high-skill jobs? Computers will absolutely displace some people in traditional high-skill professions—particularly those at the low end of the professional ladder. In some circumstances, these machines already analyze financial statements and web-based marketing campaigns, prepare tax returns, handle legal discovery processes, pick stocks, write basic newspaper articles, and even diagnose some illnesses faster and more accurately than humans. This is just the beginning. They will, for example:

• Play bigger and bigger roles and gradually displace professionals in all types of lower level research, analytical, and even some original writing jobs;

• Transform existing industries, as in the way that Professor Tyler Cowen explains how they are transforming some academic disciplines (such as economics, psychology, and marketing) from being theory-driven to being data-driven;36

• Change how people work with computers, such as by relying on computers for tasks such as analysis, for recommending options, and to make tactical decisions, while allowing humans to focus on strategy; and

• Create entirely new types of jobs.

In other words, professionals will have to “up their games” and change how they work with computers if they hope to remain viable in this new age. As suggested in books including Average is Over37 and The Second Machine Age38, high-skill cognitive workers will have to learn to partner with computers, rather than use them as mere tools.

Both books, for example, use an example of chess. Although even some home computer chess programs are now capable of beating the world’s top Grand Master champions, the combination of computers and mere mid-upper level human players combine in “freestyle chess” matches to routinely beat the best programs and Grand Master chess champions playing individually.

This partnering can take any number of forms. As discussed in more depth in subsequent chapters, two forms of partnering in particular will create huge numbers of well-paying job opportunities; those for people who:

• Create the technology-based solutions that businesses and consumers will use; and

• Understand how to use technology to provide higher levels of business value for their employers, clients, and customers. The most important and the fastest growth opportunities will be for those who can analyze and derive actionable intelligence from the vast quantities of data and information that are being created.

Although computers will certainly eliminate some and transform many other high-skill jobs, they will create yet others. This will certainly include jobs for people who design, produce, program, operate, and support the hardware and software. More importantly, people who can put these data to use by understanding what information is required and how to apply it to the needs of the business will find huge new job opportunities.

For example, a 2011 McKinsey Global Institute study on Big Data claims that the explosive growth of Big Data alone will lead to shortages of 140,000 to 190,000 data scientists plus an additional 1.5 million executives and analysts who are able to use these data in their businesses by 2018.39 A 2012 Harvard Business Review article agrees, calling data science “the sexiest job of the 21st century.”40 Not only will people with these skills be in demand, they will also command high salaries (often $90,000 or more for those with some experience) and play increasingly high-profile roles within their companies. McKinsey estimates that the demand for such people will outstrip supply by two to one.

The same will be the case who can use computers to design and facilitate the manufacturing of “products” including gene therapies, nanotechnologies, and all types of new technology-based offerings. The demand for people who can program and use computers to deliver business value is already evident. Those who have and apply such skills are already in great demand, and can command premium salaries.

As discussed in Chapter 8, students who graduate with STEM degrees get more job offers, earn higher salaries, are less likely to be unemployed, and are much more likely to get jobs that require a degree and are in their field than graduates in other fields. A 2014 Brookings Institution study, Still Searching: Job Vacancies and STEM Skills, found that employers pay those with STEM backgrounds an average of 21 percent more than workers without these backgrounds. And this demand crosses all types of STEM disciplines. For example, in an era when jobs—much less college-level jobs—are tight, the study finds that there five job openings for every unemployed computer worker, 3.3 for every unemployed healthcare worker, 1.7 for every unemployed architect/engineer and 1.1 for every unemployed scientist. Those with mathematics skills, ranging from actuarial science though finance and supply-chain management are also great demand.

Demand for STEM skills also extends into many non-STEM professions. Although there are only 0.7 jobs for every unemployed lawyer, lawyers with a specialty in intellectual property (for evaluating patents and so forth) continue to be in high demand. So too are office workers with quantitative analysis skills and social scientists skilled in programing and analytics.

Examples of jobs that will be created by computers go well beyond the private sector and academia. As discussed in Average is Over, the U.S. Air Force claims that it takes 168 people to keep a predator drone in operation for 24 hours and about 300 people for a larger drone.41 These numbers compare with the 100 or so people required for an F-16 fighter.

This, however, is only the beginning. We have already seen how traditional supercomputer-like capabilities have migrated from room-size to desktop, to laptop, and to pocket-size—and the capabilities they have enabled over a couple of decades. We are now seeing similar functionality beginning to emerge in smart eyeglasses. Soon, new generations of chips will be integrated into clothes, bridges, and even inside humans.

But as rapidly as computers are evolving to new form factors and functionality, the functionality and usage of the Internet is expanding even more rapidly. In the 20 years since the graphical web browser was invented, the Internet has evolved from a platform for delivering content to one for processing data (in the form of transactions), to enabling social connections, to the creation of the “Internet of things” through which, by 2020, an estimated 25 billion smart devices, each with its own unique IP address, will communicate with each other. Just as the emergence of the content web created Google, and the social web created Facebook, the Internet of things—not to speak of whatever comes next—will create new categories of companies and new categories of high-skill jobs.

Mapping Your Own Path to a High-Skill Career

In other words, computers and the Internet will create some high-skill jobs, transform most, and obsolete others. The future lies not in competing with or fighting these tools, but in complementing and partnering with them.

As explained by MIT labor economist David Autor

This ongoing process of machine substitution for routine human labor complements educated workers who excel in abstract tasks that harness problem-solving ability, intuition, creativity, and persuasion—tasks that are at present difficult to automate but essential to perform. Simultaneously, it devalues the skills of workers, typically those without postsecondary education, who compete most directly with machinery in performing routine-intensive activities.42

Google Chief Economist, Hal Varian’s career advise focuses on the output of these computers. As he puts it, “If you are looking for a career where your services will be in high demand, you should find something where you provide a scarce, complementary service to something that is getting ubiquitous and cheap. … Data.”43

But how can you best complement and partner with computers? What skills should you focus on to ensure that you will be one of those who will benefit from these increasingly powerful tools? I see three broad options. You can:

1. Design, produce, program, operate, and support these products.

2. Understand and develop the skills required to partner with them, such as the previously mentioned data scientists, analysts, and chess strategists; or you can

3. Build your own career around skills in which computers are not likely to master over the next decade or two. As I discuss in Chapter 3, these include, but are certainly not limited to, creativity, critical thinking, complex communications, empathy, sensorimotor skills, and management skills.

You will also have to recognize that as the capabilities and roles played by computers evolve (and as business needs and all types of technology, social, political, and economic, continually change), you will have to evolve and, in some cases, totally reinvent your own skills and your own brand. You can either proactively anticipate these changes and evolve yourself to take advantage of them, react and try to adapt to them, or become obsolete.

Keeping up with, much less keeping ahead of change, however, is becoming more and more of a challenge. After all, as McAfee and Brynjolfsson explain in The Second Machine Age, the steam engines that powered the first machine age replaced human muscle power and forced people to adapt by developing basic knowledge-based skills.44 And since steam engines doubled in performance every 50 to 70 years, they gave humans time to adapt—to learn new skills that allowed them to differentiate themselves from or to complement these increasingly powerful machines. Computers are moving well beyond becoming repositories of information to becoming sources of cognitive reasoning. Moreover, computing capabilities are growing at an exponential rate—doubling in performance every 18 to 24 months! This requires humans to develop ever higher level skills (and to continually evolve their unique professional brand around these new skills) at an exponential pace.

If you hope to stay ahead of, maintain your differentiation from, or continue to be an indispensable partner to computers, you will have to continually upgrade and adapt your skills, or even be prepared to totally change fields. And you will be far better positioned if you anticipate the changes and build the required skills slightly before they are actually needed. This type of proactive analysis requires additional skills.

But which skills are best-suited to delivering the highest level of value? What are the employment and career prospects around these skills? Which are likely to command the greatest premiums? And most importantly, what type of skills you will need not just to land and succeed in your first job, but over your entire working life, no matter which and how many different careers you eventually have?

While this chapter examined how the jobs of the future will differ from those of past, the next chapter assesses how the skills that will be required to succeed in 21st century careers will differ from those required in the past.