Predicting the Aftermath of the Financial Asteroid Generally known as COVID-19

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Predicting the Aftermath of the Economic Asteroid Known as COVID-19

September
25, 2020

7 min read

The opinions expressed by the entrepreneur's contributors are their own.

This article was written by Duncan Robins, a member of Entrepreneur NEXT supported by the Assemble Content Team. Entrepreneur NEXT is our Expert Solutions division that leads the future of the work and skills-based economy. If you're struggling to find, review, and hire the right experts for your business, Entrepreneur NEXT is a platform that allows you to hire the experts you need, exactly when you need them. From business to marketing, sales, design, finance to technology, we have the top three experts ready to work for you.

When the asteroid COVID-19 hit the global economy, the market was in the middle of a protracted, painful transition from the industrial era. This asteroid will cost the world economy between $ 10 trillion and $ 15 trillion. It will also accelerate us as we move into the next era, the digital age.

Times change.

The physical infrastructure was the backbone of the industrial age. The management relied on rigid organizational structures and required repetitive production from a loyal Baby Boomers workforce.

However, times are changing.

In the digital age, the companies that dominate their industries and niche markets will almost certainly do so through the adoption of technology. They will not ask their millennial workforce to be loyal to vacant jobs that require redundant labor – instead they will ask for agility and creativity. To bring about this radical change, companies need to rethink every aspect of employee-employer relationships in the boomer era. They also need to force politicians to reconstruct funding mechanisms for government programs as their formerly community-focused companies and marketplaces disintegrate.

Technology-based Distributed Services Organizations ("TEDS" for short) are likely to dominate the post-COVID market. These agile and efficient organizations and their ecosystems will thrive in the digital age. Their backbone will be the digital platforms that connect their distributed employees, support their marketplaces and enable their market-oriented applications.

These platforms also enable the ubiquitous use of automation, robots and A.I. (in physical and digital form). You can expect these tools to evolve and optimize throughout the digital age.

They came. They saw. They conquered.

TEDS represent a new form of organization that will probably dominate global markets for years after the end of the industrial era. The most successful of these units will share many of the same organizational characteristics. You will be:

1) Be technology capable

2) Distributing labor

3) Mix physical and digital assets in your service offerings

4) Be extremely agile and efficient

We know this because the current incarnation of TEDS includes not only giants like Alphabet (Google), Amazon, Facebook, Apple, Uber and Airbnb, but smaller startups like Assemble Technologies as well.

These beasts and babes not only want to disrupt markets and industries, they want to dominate them too. Many of these current businesses and their ecosystems include a platform, marketplace, and application (app) or software-as-a-service (SaaS) offering. The most successful have already figured out how distributed labor and physical assets can be integrated into novel legal structures. They use this advantage to achieve maximum mobility and efficiency and to offer their employees new possibilities and flexibility.

The biggest TEDs have grown into voracious organizations devouring markets and industries at a fantastic rate. Remember, in 1995, 12 years after AOL started, the top 15 Internet companies were worth $ 17 billion. In 2015 – 12 years after Facebook launched the social media platform – the top platform companies (the forerunners of TEDS) were worth a whopping $ 2.5 trillion. Before COVID, economists predicted that the digital share of the global economy is expected to increase from 15 percent in 2015 to 25 percent in 2020.

They predicted the possible beginning of the digital age.

The biggest problem entrepreneurs have in common today is finding, reviewing, hiring, and maintaining expertise.

Millennials will choose their future.

Although TEDS seems to have the upper hand over its workforce today, the balance is quickly being restored. Millennials will be a powerful drag on TEDS as they become the majority of the workforce, the consumer market and the voting public. You will surprise many musty politicians, officials and community leaders what they are calling for and how active they will be.

Most freelance millennials won't compete for employee status. According to surveys, most millennials prefer freelance independence. 42 percent of Millennials participated in the gig economy in 2018, and many more are keen to do contract work in the near future. Successful millennial freelancers don't necessarily want to become employees. However, they are interested in benefits that are currently employment tied, including:

1) Job-related training

2) access to health care

3) Tax Incentives for Investing in Retirement

However, none of these benefits need to be linked to a relationship between employer and employee. If millennials find their way, it won't be long now.

This is because freelancers are very politically active. Eighty percent of freelancers expect to be able to vote in the upcoming election, almost twice as many as non-freelancers. Over 80 percent of full-time freelancers would cross party lines to support candidates who solve their needs. They also vote with their wallets and feet, support organizations that align themselves with their values, boycott those who don't, and move into communities that support their "work as life" decisions.

Darwinian evolution – blooming post-asteroid.

In order for businesses to survive and thrive in the post-COVID digital age, most will need to align with one or more TEDs by joining their ecosystems. Alignment will give these organizations a chance to struggle, but they have yet to evolve. You still need to use new platforms and digital tools to achieve agility and efficiency and survive.

Unfortunately, when physical connections to customers were digitized earlier, companies are increasingly dependent on the ecosystems of their TEDS.

While there will be many legal and political efforts to slow the rise of TEDS, most attempts will be unsuccessful in the long run. Companies trying to adapt should not be distracted or lulled by those efforts. Rather, they should stay focused and determined to adjust to the future of work.

The new future.

TEDs are in stark contrast to hierarchical organizations of the boomer era. They are redefining the worker-employer paradigm in such a way that courts, lawmakers and officials around the world have difficulty applying outdated laws, guidelines and practices. Questions that used to be straightforward will be difficult to answer.

For example, what is the relationship between an organization and the employee? Or what is the legal relationship between each of these units and the customer? Are the workers independent contractors, sole traders or employees? Are the guests or passengers the workers' customers or the company's customers, or both?

We expect five trends in the workplace in the future:

1) Workforce and technology will change as physical robots and digital bots become ubiquitous.

2) The definitions of “employee” and “job” become blurred when organizations incorporate more flexible personnel models.

3) Organizations and the nature of their work are driven more by teams and their digital collaboration tools than by centralized, corporate-controlled physical spaces and organizational structures.

4) Upskilling and reskilling programs are becoming competitive advantages for organizations that are required but also sought after by their competence-based employees.

5) Traditional pre-tax employee benefits such as healthcare and 401K are decoupled from jobs.

The future of work looks bright for many workers. Millennials will enforce improvements in the quality of "work as life" and will gain more independence and flexibility through the use of their skills and expertise. More people will have access to a more liquid labor market that will be more performance-oriented and "color-blind".

However, governments need to work with TEDS to develop updated training and education programs and provide additional technology for ailing communities. This will bridge the digital divide (a massive and growing social and economic challenge) for the benefit of all.

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