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New economic and social models by Prof. Michael Bartz



“Digitisation is like a speeding train. Companies that proactively deal with change will survive and make a quantum leap towards growth”. A dialog with Prof. Michael Bartz.

 

In the scope of your professorship at the IMC University of Applied Sciences Krems, you conduct research in the field of New World of Work. What exactly are you working on and researching?

Since about 2000 we have found ourselves in a very accelerated Kondratieff Wave of Change.

The main development waves that have led to this are, firstly, broadband; the emergence of smartphones, tablets, extremely intuitive devices and thus the digitisation around the world. All these developments lead to changes that pervade all aspects of our social, private, public and business lives. At the IMC University of Applied Sciences Krems, we concern ourselves, among other things, with the rules governing these changes and the “New World of Work”. Moreover, in long-term studies, we measure satisfaction, involvement, commitment and above all, productivity in the professional world.

 

What key changes do you see coming?

The advancing digitisation of our entire society is one of the key issues. In many parts of the world, we are just beginning. Africa, for example, is still disconnected; in Asia only 44% – still 1.8 billion people – are connected. In North America this number is 90% and in Europe approximately 75%. The further increase in internet penetration, especially in Asia and Africa, will lead to digital working environments in the future. This is, however, only a partial aspect of digitisation. An important point is that hitherto successful business models are increasingly being called into question. The simplest and clearest example is banking. Today, apart from checking and saving accounts, which are now being processed online, there are no additional products for the private customer sector. The branch model has become obsolete and because of this, the banks’ business model is changing fundamentally. In a variety of industries, business models must also be adapted or completely rebuilt. Digitisation is like a speeding train. The companies that say they will take a look at it in due time have already missed the train. Companies that are concerned with the changes and try to tap into these developments, to shape something that creates a new dynamic, these companies survive and will make a quantum leap towards growth. For the majority of companies, it is therefore of the utmost importance to look closely at what happens and to consider in which direction and at which speed the changes must take place. In addition, the speed of change inward must also be adapted and proportioned in order to enable employees to keep up with this process. This can only be accomplished, however, by acting proactively.

 

In the case of a nationwide digitisation, it’s estimated that in 2050, 40-65% of the jobs that exist today will no longer exist. What will be the requirements for employees in the future?

There will be completely different jobs. In the 1950’s, for example, there were still stenotypists. It is quite normal that jobs will die out due to technological developments and new ones will emerge. We will, of course, find more of our jobs in the digital value chain and work less with our hands. It is certain that the production will be placed more and more in the hands of robots and automation. In the future, we will work side by side with robots and artificial intelligence. There is also a paradigm shift in the office. My colleagues today wont necessarily be sitting next to me. They will be scattered all over the world. There is a virtual collaboration across a global labour market. It will become different, more diverse and demanding and, to this extent, more human. Nevertheless, we must consider how to prepare people for the changes. There are core competences that will be needed in these new living and working environments. This also requires a paradigm shift in the school system. We need to move away from rigid memorization and towards flexible learning content that promote other competencies, such as analysing problems, self-organisation and structuring, as well as working and communicating emphatically with others. The Scandinavian reform countries and their school systems can be seen as examples here.

 

How will most of the population earn money in the future? Who are the winners and who are the losers in the economic system?

In the overall economic context, there will be new social models. For example, the unconditional basic income which, to put it simply, guarantees each person a life-long income of 1,500 euros without consideration; simply because they were born in Austria. This safeguard would lead to people developing differently; being able to pursue their interests and do what they have always dreamed of. The unconditional basic income is the safety net. The reform is financed by the reduction of the national quota, through the abolishment of administrative bodies. For example, a Public Employment Service (AMS) in Austria would no longer be needed as an administrative body; or other bodies for today’s small-scale administration of social benefits such as child allowance, study assistance etc. Through the dissolution of these authorities, appropriate budget resources are made available, which are then used to finance the unconditional basic income. In Austria, a massive number of employees in the public sector are retiring within the next 10 years. This offers a historically unique opportunity for social reform.

 

Reforms such as the unconditional basic income would also work in organisations.

How will working in a company change? Who will work for whom or will everyone be self-employed or a freelancer?

The forecasts lean toward freelancing; more fluidity in the cooperation conditions such as outsourcing, crowd-working and click-working. Companies are therefore more and more understood as a talent cloud or coral reef, where employees and companies assemble for a certain project for a certain period of time and then move on. IBM, Microsoft, Google are examples of this. Which approach actually makes sense, and at which intensity, depends strongly on the respective industry. However, in our long-term studies, we measure that through flexibility and fluidity, companies can increase their productivity by 5 to 10% and reduce costs by up to 20 to 30%. Important prerequisites include, among other things, so-called game rules, which hold together the core elements of these networks and talent clouds. We research which game rules are important and which ones work very deeply using brain research methods. Because what rules are really effective and which are unnecessary, can really only be understood sustainably at this point – in the human brain. In any case, the flexibilisation of companies is not a walk in the park; that’s why research in this area is so critical to ensure the transformation of organisations and ensure investment in change. At the same time, companies are taking the lead in this direction.

 

How far can this flexible restructuring of companies go?

Up to self-organisation. One example: The company Tele Haase in Vienna has been successfully operating without an executive board for several years. Although the changeover caused massive employee and sales losses during the first three years, today the company has put these transitional losses behind it. Of course, the company has found new employees who are comfortable with the new working styles and feel comfortable without management. Such models of sociocracy, of self-organisation, function through rotating committees, such as marketing and product development committees, which are chosen for a certain period of time and whose composition is constantly, rhythmically changing.

 

Exciting, this change in corporate governance from hierarchies towards democratisation. What is the driving force in the direction of democratisation and flexibility of companies?

Strong hierarchically lead companies are monolithic and cumbersome in their culture. Today, however, we are no longer dealing with static markets and customer groups. Businesses are more likely to be confronted with fluid networks of customers that continue to change in size, in their demographic characteristics and in their needs. As a successful company, I need to develop an appropriate agility to ensure that I constantly adapt my value propositions, the products and services offered by me as a company, to the needs of the customer quickly and cost-effectively. Because in the end only one point counts: Only if the value proposition is correct, will the customers be willing to pay for it.

 

What does this mean for the individuals in the businesses?

Management of change is therefore becoming a core competency for companies, their executives and their employees. This is precisely what executives and employees should be able to co-develop accordingly and, in a permanent process, prepare themselves for the next changes and developments. Life-long learning is therefore a personal key task. If we assume that the next generation will have a life expectancy of 100 to 105 years, and are likely to work until at least the age of 80, it is foreseeable that flexible working and learning models will become popular.In this model, people will continue to develop; staying 10, 20, 25 years in a job profile, then building upon it in a new phase or beginning something completely new. It is not life planning, but rather life phase planning that is the focus.

About Prof. Michael Bartz

Michael Bartz is a Professor at the IMC University of Applied Sciences Krems and a business consultant for topics such as the “The Future of Work”, “Productivity” and “Rules for mobile working”. Michael has over 16 years of industry experience in management positions at Microsoft, Philips, Capgemini. He is also a book author and blogger.

www.newworldofwork.wordpress.com

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