by Tom Wheeler
As we’ve discussed, one of the principal effects of the new network is to distribute activity to the ultimate edge of the network, the user. As these in-out decisions of a network hub move to the individual, they are personally trackable and identifiable. As editorial creation and commerce move outward to become an individualized network hub, they also remove the ability to hide in the crowd. While the industrial age may have eliminated the privacy of the agricultural homestead, urbanity nonetheless allowed a degree of anonymity. That ability to hide among the congregated masses, however, evaporates as the network moves activity outward and tracks it to the individually identifiable user.
And the information never dies. As it is virtually costless to store a bit of data, there is little reason not to store as much as possible. Similarly, it is very inexpensive to search for and summon a piece of data and relate it to other pieces to enrich an individual portrait that can then be sold. As a result, our past begins to affect our future. The storage of information about our past behavior has an impact on our present and future by establishing expectations about us. Commercially, this detailed portrait is amazing and quite possibly helpful. Used by others (friend or foe) who want to know about each of us, it can be terrifying.
When such information is centralized and controlled, whether by a network or by a service platform like Facebook or Google, it can be weaponized to control an otherwise free market. By creating a data bottleneck, those who control the information can disadvantage traditional local businesses such as newspapers and independent merchants that don’t have such access. Since data is the key currency, those who possess it can use their dominance to crush new competition and leverage themselves into new unrelated businesses. And since artificial intelligence is really nothing more than the manipulation of databases to reach a highly probable conclusion, control of those databases means control of the future.
We are not prepared to deal with the information explosion around us. Laws and regulations were designed in different times; networks are regulated by one federal agency, the Federal Communications Commission, while those delivering services are overseen by another, the Federal Trade Commission, with different legal expectations. One of the most challenging situations I faced at the FCC was how to apply a law written in 1934 and updated in 1996 to protect personal privacy in a world where information is a capital asset.16 The conclusion we applied to network providers was based on three cornerstones: The consumer should be told what information the network is collecting about them and how it is used. Knowing that, the consumer has the right to choose whether to allow the information to be used in that manner. Finally, whatever information was collected must be securely protected from unauthorized use.17
Privacy is the conundrum of the twenty-first century. Using our information makes things run better and offers each of us new personalized services—but at the cost of individual privacy and marketplace competition. We have seen privacy expectations evolve over time. We must now determine those expectations in a digital world.
Horizontalizing Work
Before the railroad destroyed artisans in favor of industrial mass production, two blacksmiths, working their way through eleven separately identifiable tasks, could produce a plow in approximately 118 man-hours. The fate of these craftsmen was sealed, however, by a factory floor that produced the same plow in just 3.75 man-hours by assigning fifty-two men to perform ninety-seven distinct tasks.18
Achieving such productivity gains meant transforming individuals into cogs in a corporate machine governed by rules and processes. Two blacksmiths working side by side were a self-managing proposition. Production at scale, however, necessitated a hierarchy of management supervision to oversee and track multitudes of workers and their output.
Management hierarchy was another legacy of the railroad. As the first big business, the railroads recruited managers from the only other large institution of the time, the U.S. Army. The result was centralized, command-and-control management (ever wonder how military terms such as “division” came to be applied to corporations?).
Centralized management further expanded when the telegraph allowed supervision of multiple locations from afar. The result was that what happened on the shop floor, or the newspaper’s front page, or the researcher’s lab bench, was overseen by someone “upstairs,” often multiple “upstairs.”
The new networks stand management hierarchy on its head. Where the production of hard capital assets in centralized locations enabled a stratified corporate structure, information-based activity works in the opposite direction. As work moves off the shop floor into the cloud, coordination via hierarchy is being replaced by coordination via clicks to links and apps. In the process, the nature of work is returning to its preindustrial artisan roots.
Historically, artisans created the middle class. Johannes Gutenberg, for instance, was born into the developing economic and social stratum between the nobility and serfs, thanks to his father’s skill as a goldsmith. Acting as independent contractors outside the vertical hierarchy of feudalism, these individuals performed specialized value-adding work on leather, metals, and wood. The middle-class artisans of the new millennium follow the same horizontalizing value-adding model, only they work with information.
The distributed network that gave us the “connected cloud” has enabled a “human cloud” in which individual economic activity is distributed just like the network that connects it.
Some economists predict that by 2020, about half of all American workers will be, like the artisans of old, freelance or contract workers.19 Research in 2015 found that 22 percent of adult Americans had offered at least one service in the sharing economy exemplified by Uber and Airbnb, and for one-third of those individuals, that work was their primary or major source of income.20
MIT professor Thomas Malone coined the term “e-lancer” to describe the decentralized, task-based employment that is replacing the centralized, production-based employment of the last network revolution.21 Dr. Nicola Millard of British Telecom creatively tagged this the “Death of Dolly,” a reference to Dolly Parton’s hit song “9 to 5” and the corporate employment structure it no longer represents.22
My daughter and son-in-law work for Salesforce, a pioneer in cloud-based services. Theirs is hardly a nine-to-five job. The cloud-based integration philosophy Salesforce sells to its users is practiced with a vengeance internally. Neither of them goes to a corporate office because cloud functionality means they can work anywhere, and always-connected means always available, whether to a client or a colleague. It is that nonintermediated collaboration with clients and colleagues that is most hierarchy-destroying. The new networks have returned us to the kind of collaboration among artisans that was snuffed out by the imposition of industrial hierarchy.
Nonhierarchical activity is also waste-reducing activity. Working free of office overhead or long commutes reduces the demand on resources. And the sharing economy, by definition, is less wasteful. An automobile typically sits unused more than 90 percent of the time in order to provide spurts of convenience a ride-sharing service could otherwise provide.
Yet the “Death of Dolly” has also hollowed out traditional paths to economic opportunity. For the last several decades, economic activity has been directed toward making things cheaper. As a result, employers exported jobs to low-wage countries while activities that stayed at home replaced people with robots.
While the new networks have been complicit in the “make it cheaper” market, they are also the path to new opportunity. “Make it cheaper” is being replaced by “make it smarter.”23 The products of the future are interconnected “smart” products—from smart cars, smart buildings and homes, to smart manufacturing and smart farming.
The challenge of a “smart” economy is “smart” workers. The skill set of many who lost their jobs in the early twenty-first century reflected a mismatch with the needs—and opportunities—of the modern economy. But the creation of widespread skills to serve new a
ctivities is a solvable problem we have seen before in history. The Industrial Revolution demanded workers with skills beyond those necessary for agricultural production. Those skills were delivered by an education system that applied industrial processes in twelve annual educational steps. Today we face the opportunity to redefine the concept of education to incorporate digital-era processes into the preparation (and re-preparation) of workers for the digital economy.
The new network that created the information economy is also the pathway for a new educational paradigm, as we will explore in the next section. A key concept of the digital economy—an iterative process to constantly improve the product—is as applicable to human capital as it is to the software that runs this new reality.
In the software world, a product release is just a beginning, followed by constant updates and improvements downloaded as they are developed. This iterative, agile improvement can be applied to the challenges of today, including retraining those whose industrial jobs have been eliminated for “smart” careers.
I saw the power of the new network to aid the continual expansion of individual skills in Hazard, Kentucky, where laid-off coal miners were learning software coding at the local community college. When fiber-optic cables brought the internet to coal country, local leaders and entrepreneurs—whose twang turns the word “hollow” into “holler”—began promoting the idea of “Silicon Holler,” where the drive and determination that once took a person to the coalface could be applied to software coding.
The railroad network created coal country by hauling the natural resource to factories. Now the high-speed broadband information network is turning Kentucky coal miners into code miners to build and export the resource of the twenty-first century.
Retraining for a twenty-first-century skill set is a heroic effort. But the constant changes in the digital world also mean that training is no longer a one-shot process. Iterative education, where learning never stops, promises to redefine the workforce. Randall Stephenson, CEO of AT&T, told his employees that those who don’t spend five to ten hours a week learning online “will obsolete themselves with technology.” He warned, “There is a need to retool yourselves, and you should not expect it to stop.”24
When simply keeping pace requires five to ten hours a week of ongoing education, a new reality begins to challenge old assumptions, including even the forty-hour workweek. During the New Deal, five eight-hour days replaced the sixty-hour week of six ten-hour days. Increased productivity permitted the week to shrink to forty hours. The digital economy’s need for continual training may lead to an even shorter workweek, or to a week that includes training as a part of work hours.
The tendency of our networks to create nonobvious applications has also opened the door to new employment opportunities. Web applications, for instance, make work possible for those whose circumstances inhibit traditional nine-to-five employment. Want to generate income by offering doggie day care at home? The Thumbtack app promotes your service. Have a driver’s license and a few hours? Uber makes you a taxi driver. Have a disability that hinders your ability to get around? Multiple online sites open new opportunities for work at home.
Inherent in the expansion of noncorporate work is also a new challenge to the maintenance of a social safety net. In Gutenberg’s time, independent artisans sought security by organizing into guilds. While the guild system provided a structure of standardized processes and accreditation for independent producers, it also provided a degree of security against adverse events that could cripple a decentralized, independent contractor.
Through member contributions to a common fund, the guild economy helped provide security to its members. Members’ hardships were answered with a withdrawal from the fund.25 The term “guild,” in fact, derives from the Old English word for “gold—“gild”—in reference to the gold in the group’s treasury.26
As industrial scope and scale activity choked out artisans, workers sought security by banding together into unions. We have seen how the first big business, the railroad, drove the creation of organized labor as a countervailing force. Subsequently, through law and labor agreements, corporations became the vehicles for the delivery of worker security programs such as pensions and health insurance.
As large corporations fade as the principal provider of employment, however, the security needs of newly enfranchised information artisans do not go away. In an economy of on-demand individual contractors, the worker security that law and labor negotiations created in the nineteenth and twentieth centuries are being challenged to evolve. The increase in noncorporate employment brings the need for a new dispensing agent for worker security.
The ability to mitigate risk by collective action that began with guilds and fully developed in the industrial era now seeks a new vehicle. While never the focus of the debate surrounding it, the Affordable Care Act (more widely known as Obamacare), which managed risk-sharing through insurance exchanges open to all, was an early manifestation of this principle.
New types of labor organizations such as Coworker.org and the Freelancers Union are emerging. Some traditional unions have created an “hour bank” where an independent worker overpays monthly benefit premiums in an effort to build up a “bank” of surplus payments that can be drawn upon to cover the cost of benefits when they are not working. The creation of exchanges like those Obamacare established for health insurance can serve a similar purpose for disability and workers’ compensation insurance.
As new networks disrupt traditional assumptions about the structure of work, they have expanded individual opportunity in a manner that recalls the days of artisans. Individuality has replaced rules-based hierarchies and, with it, the security that accompanied such hierarchy. In their return to artisanal activity, workers in the digital economy face similar protection and security challenges as did workers in earlier network revolutions.
How We Learn
The students at James Robinson High School in Fairfax, Virginia, receive an education unlike anything I ever experienced. Observing a science class, I watched the progress on their year-end projects. No papier-mâché volcanoes here! Each student had a laptop connected to the internet by Wi-Fi. The three-student teams were collaborating on a PowerPoint presentation that would be their final report. All of them were doing individual research and then contributing to the report, which was housed in the cloud.
As each team worked, the teacher monitored their activity by logging into the cloud. There she could also leave notes critiquing their progress—comments each student would see, along with the other students’ replies. When a student or group appeared to need more hands-on support, the teacher could identify the need in real time and go to the students directly.
Networked computing, a teacher at another school told me, had changed the nature of teaching from the “sage on the stage” reaching a heterogeneous class with a common message, to the “guide by the side” helping each student learn at his or her own pace.
The education system with which most of us are familiar was developed in the nineteenth century to feed qualified workers into the industrial beast. The goal was to instill skills necessary for the factory floor, such as the ability to understand an instruction manual or make calculations. Mass-production techniques that had worked in the factory were applied to the classroom. Raw material went in, was improved at various points with specific processes, and emerged a finished product. In the factory, the production of a plow was ninety-seven specific tasks; in school, the production of a qualified individual was twelve grades.
Applied at a central location where scope and scale economies could be brought to bear, the cost of educating a student declined to the point where free and compulsory schooling was universal in developed countries. Industrial-age education was a huge success, but the industrial activities the educational structure was designed to support no longer drive the economy. The networked economy introduces new sets of skill requirements. Fortunately, it also introduces new means to d
eliver necessary training.
The developments we have just discussed—the changing nature of work and the use of information—manifest themselves in the evolution of education in two ways: the what and the how.
What students are being taught today often follows the old industrial age model, just updated for the twenty-first-century version of the factory floor. Nineteenth-century education was designed to impart the basic reading and math skills necessary to operate on the factory floor. The current educational emphasis on STEM fields—science, technology, engineering, and math—similarly focuses on the skills necessary for the twenty-first-century “factory” even though the factory “production line” may require sitting in front of a computer.
We will shortly discuss the impact of computers replacing jobs in the digital economy. The jobs that are most susceptible to elimination are those in which rote activities can be replicated in hardware and software. The jobs that are less susceptible to automation are those that require the uniquely human skills of common-sense reasoning and understanding the human condition. Broadly defined, we call these human characteristics “creativity” and “the arts.”
In the digital era, employment opportunity relies on doing things computers can’t. Zeros and ones can’t think creatively. The educational system must prepare us—throughout life—to exploit that advantage. Our only protection is an educational system oriented less toward teaching the skills of a second-rate robot and more toward instilling the skills of a first-rate human, one that computers can’t replace.27
The how of the evolution of education begins to look like the new network itself. Just as work has moved from the centralized shop floor, in which the individual was a cog, to a distributed environment in which the individual can be a hub commanding the inflow and outflow of information, the new networks create a similar opportunity for flipping the educational process from mass to individualized.28
