The Future of Work

Globalization and the war for talent - how to attract, retain and motivate the workforce we need?

The Knowledge Economy - what skills will we need and where will they come from?

Demographic changes - where will we find our workforce & how will it be different from now?

Technology - how will it affect how and where we work?

The State of Play…

Europe – new member impact

North America draws breath

Japan zero’s-in elsewhere

China wonders why everyone plays a ‘short’ game

Asia gets drawn like a magnet

Australia/NZ region observes with interest

Macroeconomic Trends

Worldwide and regional economic growth will continue to recover but slowly from 2001 levels– Growth will take until 2006 to reach traditional levels – There will be no double-dip recession

World stock markets will continue to rise slowly from the depths of fall 2002 but with heavy trading and spikes up and down

Source: IDC, US OF Commerce

Macroeconomic Trends Profit growth will continue to be mixed by industry and

country though generally picking up in the United States and Japan– Profit reporting from multinationals will overstate real

profit growth because of the falling dollar

In an age of IT complexity, growth will occur in markets that support simplification of technical environment

Hiring will remain slow, but positive into Q3 2005, though certain skills are in very high demand

Source: IDC, US OF Commerce

Source: UN Population Division, 2000 Revision

Where are the people?Countries with >50m in 2004

Source: World Bank (2001)

‘01 ‘10

312 328

522 586

729

1132 13581374 1553

1299 1382

158 161

598 667

718

Population Change to 2010 - millions

Source: US Census Bureau, population growth by age group and sex

2050

2000

China Mexico Spain Italy

2050

2000

USAJapan FranceIndia

Populations Ages all over the World

25

30

35

40

45

50

55

Yr 2000 Yr 2020 Yr 2050Years (Projections)

Ave

rage

Age

Australia China Greece Italy Japan UK US

Average population age –international comparisons

87111

128143

55 62

506

683

10514177

105

109128

Dev Asia

2000 2010Source: World Bank (2001)

The 50+ are concentrated in Asia 2000 and 2010 (millions)

Global Unemployment - overview

020406080

100120140160180200

1993 1998 2000 2001 2002 2003

TotalMaleFemaleYouth

Source: ILO, Global Employment Trends Model, 2003

Unemployment rates by region in 2003

0

5

10

15

20

25

30

World Industrialisedeconomies

Transitioneconomies

East Asia South-EastAsia

South Asia LatinAmerica and

theCarribbean

Middle Eastand North

Africa

Sub-SaharanAfrica

Total Female Youth

Source: ILO, Global Employment Trends Model, 2003

Source: UN Population Forecast, 2001 revision

0

1000

2000

3000

4000

5000

2000 2010 2020

UrbanRural

Millions

Only Urban Population will Grow

Is becoming a key product-development center for General Electric, Intel, Philips, Microsoft, and other electronics giants. Strengths are hardware design and embedded software. Call centers for Japan and South Korea are growing in coastal cities.

CHINA

Work is migrating from Industrialised Countries to all Continents…

Source: Business Week, 3 Feb 03 Cover Story

More than 8,000 foreign companies source work in nine different IT parks with fiber-optic links. Strengths include huge supply of English-speaking, college-educated accountants, software writers, architects, telemarketers, and graphic artists.

PHILIPPINES

Becoming a favorite IT and engineering outsourcing haven for U.S. companies that want to keep work close to home. As car and electronics companies move manufacturing over the border, they are boosting demand for engineers.

MEXICO

Cheap telecom costs and educated workforce make San José a thriving spot for call centers targeting Spanish-speaking consumers inthe U.S. and Europe.

COSTA RICAWell-educated speakers ofFrench, English, and Germanfrom all over Africa staff growing call centers catering mainly to European companies.Deregulation of telecom could speed development. Other call centers are opening up inMauritius.

SOUTH AFRICA

Indian and American IT service providers are opening offices in Hungary, Poland, and the Czech Republic to tap abundant German and English-speaking workforce for European clients. Romania and Bulgaria are growing as IT workshops for German multinationals.

EASTERN EUROPE

Some 100 local software service exporters employ up to 10,000 engineers specializing in complex projects. Boeing, Nortel, Motorola, and Intel have small R&D centers. Still has an enormous untapped pool of master’s and doctorates in sciences, IT, and math.

RUSSIA

IT services, chip design, call centers, and business back-office work already generate $10 billion in exports and could hit $57 billion by 2008. Indian providers like Tata, Infosys, and Wipro already are global leaders, and U.S. IT service firms are piling in.

INDIA

West GermanyJapanUnited StatesFranceUKEast GermanyItalySpainKoreaCzech RepublicIndiaChina

2001

24.022.019.916.315.815.414.610.8 8.1 3.3 0.8 0.5

200429.119.021.620.119.518.817.213.8 9.9 5.2 1.0 0.6Source: Oxford Economic Forecasting

Hourly Labour Costs in Manufacturing

OK let’s get to the bottom of the debate(on off-shoring)… The Example of America…

Off-shoring is often confused with domestic outsourcing In 2003/4 US companies invested 2.5 trillion in the US

economy and only 280 billion abroad The changing of sourcing channels has been going on

for years as part of the normal maturation process of industry

Most US investments abroad are about “proximity economics”

US manufacturing is the most productive in the world, having transformed from vertically integrated production structures to highly fragmented ones

OK let’s get to the bottom of the debate(on off-shoring)… The Example of America…

Productivity increases are responsible for job losses – 25 years ago GM needed 454,000 workers to build 5 million cars and trucks – today it takes 118,000

Worldwide sourcing accounts for only a small part of job losses – the bulk of “lost” jobs have gone to a country called “PRODUCTIVITY”

Since 1995 the US has lost 11% of its manufacturing jobs … and China 15%

And for service jobs – in 70% of cases sourcing is not a factor due to the face-to-face contact or specialization of the work

Growth in demand for scientists, engineers, technicians, computer specialists, biochemists, biologists, call centre operators etc.

Two scenarios: Technology replacing humans, even in labour intensive

industries like the service sector Technology creating new types of occupations or

transforming existing - presence managers, swarm spotters and creators, knowledge posters and linkers, workplace hosts

Occupations

Skills

Managing information work in different domains Managing just-in-time social interactions Ability to catalyze swarms/smart mobs Making public spaces personal and vice versa Communicating presence in different settings and media Managing attention … your own and others

Impact of Technology on Occupations & Skills

Boundaries are blurring

freedom

variety of work

flexibility of hours

learning/experience

temporary permanentsecurity

career development

social interaction

continuity of employment

career path

freedom

variety of work

flexibility of hours

learning/experience

temporary permanent

Security

career development

social interaction

continuity of employment

career path

Flexible workforces are not a luxury, they are mandatory

Science And Engineering Ph.D. DegreesBy 2010, if current trends continue, over 90% of all physical scientists and

engineers in the world will be Asians working in Asia

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 20000

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Asians in U.S. Institutions

U.S. citizens inU.S. Institutions

Asians in AsianInstitutions

All nationalities inU.S. Institutions

New regulations will have a major impact on« re-shaping » industries and the labour market

International Trade negotiations will open and close entire domains of global exchanges e.g. in agriculture and services

Domestic deregulations will generally expose yet protected workers e.g. privatization, opening sectors to competition

Regional and national subsidies will distort geographic allocation of resources

Terrorism, Epidemic fears, immigration issues will translate into regulations and disturb movement of people

Examples:

New regulations will have a major impact on« re-shaping » industries and the labour market

Privacy laws will hinder flows of information and capabilities to offshore activities

Social and labour laws will protect some minorities,could harm others

Corporate and individual fiscal policies, especially linked to budget issues related to ageing and health costs, will distort competition across markets

Sustainable development will lead to new regulations, forcing some industries to move geographies

Examples: