Copyright Ian Pearson, BT Futurologist

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Why we'll all be self employed

Feb 2001

Self employment will steadily increase over the next decade or two, and gradually become more profitable, while at the same time becoming less stressful. The engine behind these trends is the roll-out of e-business technology, or more specifically, e-commerce. But such tools are mainly designed by and for large companies, so why will they benefit the self-employed? Why will most people become self employed? Let me explain.

E-commerce is all about streamlining the marketplace, cutting out the middle-man, putting customers directly in touch with suppliers, and generally automating the sales and procurement process as far as possible. In a typical large company, about a third of the employees are connected to this marketplace process in one way or another - accountants, auditors, sales staff, procurement executives, marketers, and armies of clerical people. Many of the tasks in these areas will be automated in the near future. The people who used to do these automated jobs must re-skill if they want to continue working. Fortunately, each new wave of technology creates lots of new jobs as well as eradicating old ones, but for many people, re-skilling will be a chore. Technological change is accelerating and will do so for decades to come. We will simply have to get used to it. Other areas of e-business follow similar trends.

Most successful companies recognise the acceleration of change, and want to be nimble so that they can react fast enough. They do not want large numbers of permanent staff, particularly in administrative and support roles. The days of large departments will soon be over. As an example, BT has over 100,000 employees but no personnel department - the personnel department has been outsourced to a company that also provides it for many other companies. They will automate as far as possible those functions that are common to each client company.

If I were to set up a company tomorrow, it would have no personnel, accountancy, or legal departments. I would have a very small core of key people who define the very nature of the company and who are the source of its competitive edge. I would back them up with as much machine intelligence as I could. Everything else I would try to outsource. My company might effectively be quite large in overall ability and population, but most of the staff would be bought in on demand, just for a particular task or project. On a mature internet, it will be easy to do this, since other companies will capitalise on this market by providing world-class support functions on request. An entrepreneur with a good idea will be able to grow extremely rapidly in such an environment.

My company would be mostly virtual. And here lies the key point. These other support companies will be virtual too. The majority of people in this environment would effectively be self employed, selling themselves project by project to whomsoever offers the most fun or the highest reward. Even the personnel company only employs a minimum of full time core staff, while it perfects its automation software. My company benefits by virtuality, the employees benefit because I have to pay them more to ensure I get the people I need. And because we will make extensive use of high level machine intelligence, together we can create a great deal more, to mutual advantage. This is the logic behind phase one of the virtual company. It's already happening. Let's hope it works.

Machine intelligence is the fuel in this e-business engine. And it is getting better each day. Machine intelligence itself can be seen in two quite different ways. It de-skills jobs by allowing more junior people to do them, assisted by smart machines. But from another point of view, it upskills people, allowing them to do more difficult tasks. The first of these viewpoints is far more common, but is less useful. Assuming a deskilling of jobs, but keeping everything else constant, would yield the undesirable consequence of gradual wealth reduction. . If we assume that everyone still wants to work, and that they are made capable of higher grades of work by virtue of machine assistance, then the economy as a whole benefits. On average, we're better off. A much more attractive viewpoint, enabled by there being no fundamental caps on the economy, at least in the short term.

As this machine intelligence improves, it will gradually take over more and more tasks, requiring fewer people in each role. New technologies make new markets, so more new roles. But as the economy continues to expand, we will notice a new phase of virtuality. The next wave of automation will primarily affect management and professional grades in companies. Eventually, we will get to the point where our business environment is so smart that it automatically identifies market niches and opportunities, and automatically negotiates with individuals' software agents to fill those niches and exploit those opportunities. We'll all have software agents by then to advertise our skills, assets and availability. This second phase of virtuality will be dominated by virtual co-operatives, groups of free-lancers working together in competition with older virtual companies. Virtual co-ops will be administrated mainly by software. With no shareholders or management overheads to pay, and computer-speed co-ordination, they will usually win when competing against virtual companies, who themselves are much more efficient than industrial age companies.

So the future of self employment looks good so far.

Personnel, Training and records

At this point I got bored. One day I may finish this. Sorry!