The future of work is decentralised
The pandemic has shown that remote work is possible, the technology is available and most people actually enjoy it. There are a lot of benefits for both employers and employees, but what are the long term implications of working remotely? What happens when work gets decentralised?
Sydney, London or Berlin it doesn’t really matter, most cities have a business centre or CBD with lots of high rise office buildings. Weekdays they’re packed with people going to and from work. Employees will either commute or move close to work. You choose: pay a lot for a small apartment to be able to walk to work or sit in traffic for hours every day to afford a bigger place in the suburbs.
2020 changed work
Employers at first temporarily allowed working from home and now we see a trend of turning this into the new standard. It allows the city dwellers to move somewhere cheaper or bigger and frees the suburbans from commuting.
Employers of course profit too, they can reduce real estate costs, as less office space is required and reduce corporate travel, as more and more meetings are held remotely. Businesses can tap into a bigger pool of talent by hiring people from other cities all across the country.
Supply shock
A bigger talent pool leads to an increased supply of workers a business can hire. Increased supply drives down the price businesses need to pay for workers resulting in a pay cut for employees. Many will be willing to accept this for more free time from not commuting and lower cost of living from leaving the city.
But let’s think even further ahead; Since we work remotely, why limit the job search to a country’s job market and not expand it globally? The search criteria: same time zone, same language, same skills. Simple as that. Businesses could find even cheaper resources or get their employees to move to a different country to benefit from the lower cost of living or better taxes. An Australian employee might want to move to Indonesia, take a pay cut but still live well. An Indonesian with good English might start at an Australian company and make a good living staying in his home country.
Labor cost arbitrage
Global labor arbitrage is a phenomenon whose effects we all know, without knowing it’s called that way. It’s when a company outsources part of the HR department to a low wage country or decides to move production of vehicles to where labor is cheap. Work is arbitraged and thus distributed somewhere cheaper. In the finance world, arbitrage is when assets are bought on one market and sold on another, benefitting from a higher price on the market the assets are sold at.
After some time, arbitrage balances prices of assets across the globe. So a share of Tesla has roughly the same price all around the world.
Could this happen to salaries, when work gets decentralised by working from home? Equal skills, same timezone and language, why would a business pay more for someone in Australia just because he lives in Australia but never actually comes to the office? It could lead to wages being balanced out globally so that a Java developer in Indonesia can earn the same as a Java developer in Australia. They both have to work remote of course but if that’s a given, why not? Many open source software projects already operate with highly diversified teams all across the globe.
I don’t think this is something happening immediately, but it is absolutely possible we are heading in that direction already.
Decentralised learning
At first, only people from countries with education infrastructure and a job ecosystem will have a chance at global jobs. You might need proven experience in a certain field or a university degree. Over time, and one can see it starting today, education will shift to being more and more decentralised. Learning already takes place on YouTube, GitHub, blogs or just anything online — no university required. This levels the global playing field, giving equal access to anyone.
Most Unis already struggle to keep up with the rate of changing technology. You have to learn online to keep up to date (especially in the tech sector).
So if learning happens online and Universities lose relevance, what do you write into your CV?
Your Github account, if you code of course. Anybody with a computer and internet access can learn to code, join projects and start contributing and become part of a development team in the open source world. Good work here is often a ticket for further work or a fulltime job somewhere.
It doesn’t need to be coding skills though, it could be writing, design and many other areas. But how do all the others show what they are capable of?
Verifiable credentials
Proving you have a uni degree is simple. The university issues a certificate and potential employers can decide if they trust the university and you that the information is legit (blockchain would help here too, but hey, it works ok at the moment). When learning online however, there is no such authority issuing a certificate. Yes, you may have a MOOC issuing a certificate, but not sure if that will be accepted.
A first step is something like the Velocity Network; your employer generates cryptographic proof of your skills and they are saved on chain. You have a wallet with these digital credentials and can use it to apply for jobs. This covers your work experience, if you had a regular employment. It might even include MOOCs and other official online courses, which could issue a cryptographic proof of your certificate.
But still, this does not include all the online learning you might have done outside of your job. What about what you learnt on Twitter, in all the online articles and blog posts you have read and the podcasts you’ve listened to?Somehow learning, and the people who learn online, would totally benefit from a proof of skill.
Proof of skill
A place where what you learned and the topics you’ve worked on are verifiable. Proof of skill would reside on a blockchain and your learning and skills could be verified so you can use them as credentials to apply for a job. Skyllz had proposed to build a similar model where reputable members endorse skills (like on LinkedIn) of other users anonymously. The scalability of this approach might be the reason why the project seems dead.
You can’t just include everything you read and do, but have to somehow aggregate the information in order to endorse them. You have to somehow apply the skill for someone to validate them. Can we get around tests and exams to prove skills? I was not able to find any other projects in this area. It is definitely tricky to validate who has done what and where skills have been built, but solving this problem would add a piece to the puzzle of the future of work.
Conclusion
Proof of skill and decentralised learning could really amplify a global labor cost arbitrage and support the decentralisation of work. Laws, Visas, work permits and global taxation on the other hand, will certainly slow things down. I think the key thing is to stay flexible, be willing to adapt to change and utilise the technologies to make use of what you learn and are curious about.
The only way out after all, might be to just go back to the office:
