Tupperware CEO: Why Job Creation As We Know It Is Over
For the past five decades, from after World War II until the turn of the Millennium, the U.S. relied on companies to create jobs and grow the economy. However, the days when job growth outpaced population growth are over. Government data show that during the past year, U.S. population growth outpaced jobs growth by more than 1 million. Several factors have changed the way we view employment, but there are two big variables that deserve attention:
The most obvious one is technology. It’s clear that manufacturing jobs are vanishing. More than 4.5 million of them disappeared in the U.S. during the past 20 years alone. And where new manufacturing facilities are being built today, they create far fewer jobs than in the past, because of robotics and automation. That’s true in the United States, and it’s true abroad. It’s not much different for so-called “knowledge workers,” whose job involves handling or using information, such as software engineers, physicians, pharmacists, engineers and scientists. Artificial Intelligence systems and Big Data analytics are already replacing many rules-based jobs, such as accountants, lawyers, mid-level managers, and even doctors.
The second factor has to do with demographics. Millennials have entered the workforce, a generation with very different expectations for their work-life balance. Their career choice is not based on finding the right employer to stay with from graduation until retirement. They want to be in control, do their own thing, work at their own pace.
Both trends undermine the traditional approach to tackling issues like unemployment and poverty, because the focus on “creating” or “bringing home” jobs becomes an outdated metric for job creation.
We simply must reboot how we think about work. Yes, the digital economy may have destroyed many jobs that we thought would be around forever, but at the same time, it has created incredible new opportunities. The barriers preventing you to “do your own thing” are coming down – both for start-ups and for those who joined the gig economy, for example by driving an Uber or securing jobs through TaskRabbit. The “burn rate” – the cost of hardware, software, and manpower that killed plenty of start-ups at the turn of the century – has all but vanished. Many in the U.S. now have access to technologies that can power the gig economy – whether it’s cloud computing, mobile devices, platforms like Google and Apple, or services like Uber and Airbnb.
This is not a “first world” thing. Emerging markets are going digital at an amazing speed. Just look at mobile banking, where countries in sub-Saharan Africa account for as many as half of all mobile banking accounts, way ahead of Europe and North America, which make up less than 10%.
So where does that leave the future of jobs? There has been plenty of talk about the “gig economy.” Most people, however, misunderstand the term “gig” – either because they are too wedded to the corporate mindset, or because they fail to appreciate how dramatically our economies and societies are set to change. “Gigs” are not low-paying casual jobs; rather, the gig economy is a return to how people worked before the dawn of the corporate age some 200 years ago, when hierarchical companies became the organizing principle.
In the gig economy, people do their own thing, but to succeed they must collaborate closely with others – including traditional companies – to deliver value and generate income. To understand the power of the gig economy, just see the energy and passion in co-working spaces like WeWork. For many millennials, this feels natural. For many people in their 30s, 40s and 50s, however, the transition will not come easy. They face a fundamental change that scares them; the economic and political turmoil of the past few years is proof of that. I know: the transition won’t be easy, and as a society we must find solutions for people to replace the benefits offered by traditional full-time jobs, such as health insurance and 401ks.
As traditional jobs disappear, the default reaction of politicians is to invest in education and training. I’m all in favor of this, but it can’t be the only solution. It will create some jobs, but won’t put an end to poverty. Rather, it risks leaving millions of people behind, especially those who don’t have access to formal training like a STEM education (Science, Technology, Engineering and Mathematics).
To help people without an income, we have to build bridges that allow them to create their own gig. As we know from the Tupperware experience, we can create huge opportunities by offering basic things like microfinance, training, and coaching.
Currently, around 80% of all new businesses in the U.S. fail within the first five years. However, we can sharply boost this rate of success if we give people proven templates that help them build their own business. At Tupperware, with our sales force of more than 3 million people, we often see the power of this approach, especially for women living in emerging economies.
Mandated “job creation” will not abolish poverty, but simply trap people in dead-end roles. Instead, we need to give people the tools and skills they need to strike out on their own.
Rick Goings is chairman and CEO of Tupperware Brands Corporation.