Future of work: Re-defining work (Part 5: The economic paradigm of participation)

Future of work: Re-defining work (Part 5: The economic paradigm of participation)

Phuah Eng Chye (22 December 2018)

“In a rapidly changing world, the state is hardly able to draw up a master plan for the future. Rather, it can and must use the democratic channels of participation to launch and take charge of a process in which diverse interests and needs can be taken into account and agreement reached on the aims of the transformation. As far as the future of work is concerned, it can collaborate with the social partners and employment specialists to develop an understanding of how economic activities are going to change and how technological innovations can be utilised in work organisation and design. In doing so, if it is to remain true to the basic philosophy of the social market economy, it must constantly bear in mind the need to strike a balance between economic and social interests”.

Kerstin Jürgens, Reiner Hoffmann, Christina Schildmann (2018) “Lets transform work!”

The percentage of the workforce outside traditional employment has been rising. It is difficult to reverse the trend of shrinking traditional employment[1] because of information disruption. If you can’t change the trend, the alternative is to shift from a paradigm of employment to a paradigm of participation. The economic paradigm of participation covers diverse work forms such as sharing and crowdworking. The proposition is that instead of viewing alternative work forms as new branches of traditional employment, it views traditional employment as a subset of participation.

\Kerstin Jürgens, Reiner Hoffmann and Christina Schildmann notes “in doing so, we must take concerns about job losses, the erosion of skills, work intensification and the breakdown of the boundaries between work and private life seriously; as well as taking into account the divide between people who find promise in freedom and flexibility and those who seek stability and security”. They suggest we “seize the opportunities which digitalisation offers for our economy, for the labour market, and quality jobs… we must highlight where the opportunities lie, and show that we have the power to shape the direction of change”.

Participation is a word loaded with meanings, particularly in the political context. I have defined participation as economic engagement purely for the purpose of analysing the organisation of work. Participation is a broad model that caters to the realities of fragmentation[2], transience and multiple relationships in a labour market disrupted by information. It recognises the blurring distinctions between consumers and producers (including co-creation and sharing) and between home and office (including virtual and part-time work).In this regard, Kerstin Jürgens, Reiner Hoffmann, Christina Schildmann note “as prosumers or as suppliers of data and self-generated content, customers and users are active participants in the process of innovation and value creation…The organisation of the work of the future therefore cannot be separated from the question of what demands we will and should make as consumers”.

In agricultural communities, family members participate in planting and harvesting. Salaried employment was shaped by the rise of industrial organisation. As the manufacturing sector hollowed out and production-related employment declined,traditional employment peaked. In the information society, work appears to be reverting to forms of participation more commonly associated with the agriculture era.

There are commonalities and differences between participation in the agriculture and information eras. Historically, participation was bound by religion and relationships in tightly-knit communities comprising large households and low-information environments. Modern participation differs in that activities are largely intangible rather than physical (abundant rather than scarce), participants(households) are modular and diverse and participation occurs in a high-information environment that supports global connectivity and autonomous exchange(stranger sharing) in crowded cities.

The emergence of flexible employment and sharing reflects the transition from employment to participation has begun. Lei Delsen notes in Netherlands it was recognised that “in today’s world, people want to be able to make their own choices” and that the welfare state schemes were unsustainable and outdated. “The 2007 Wet Maatschappelijke Ondersteuning (WMO)[3], “often called the participation act, represented an important step in the transition of the Dutch welfare state towards a participation society”. Under this concept, “all Dutch citizens have the right to develop their talents and the duty to use those talents in the service of society…participation society requires a labour market that is sufficiently flexible to adapt to changing circumstances. In this approach work security (employability) rather than job security is central”. “Government and professional support act as a last resort. People must take responsibility for their own future and create their own social and financial safety nets. The underlying idea of the participation society is one in which people decrease their dependency on state provision and instead become self-sufficient or dependent on family and community solidarity. The participation society is therefore not the same as the abolition of the welfare state, but stands for a different distribution of collective and individual responsibilities”. But this seems like an expedient version of participation; to justify a policy combination advocating flexible work and welfare cuts. It does not contemplate the possibility that flexible work actually requires higher levels of welfare protection. It also stops short of exploring the full range of possibilities offered by a paradigm of participation.

In this regard,there are several aspects to be considered. The modern version of participation originates from information disruption. The expansion of participation has negative spillover effects on traditional employment. An increase in participants (e.g. part-time workers) can crowd out full-time employees such as taxi drivers or journalists. Participation also disrupts traditional labour regulation[4]. This suggests the employment paradigm is no longer applicable and needs to be replaced by a new framework.

The most critical feature of the participation paradigm is that it places participation at the centre of society. This implies that other objectives such as output and profits are eased to the periphery. Putting participation at the centre means the end-game is widespread economic and social engagement. A paradigm based on participation facilitates a broadening of policy objectives beyond output and profits to encompass other goals such as caring, sustainable and community-based activities. The diversity of goals can be reconciled within a holistic framework which can be used to align the deployment of resources, particularly in relation to harnessing human capital.

These distinctions are important in shaping the society of the future, namely the information society. Participation at the core suggests the priority is to eliminate non-participation; i.e. to promote inclusiveness. This is consistent with the concept of the information society which sees polarisation and social isolation as major risks.

Participation also has substantial implications for the reshaping of the social order. Traditional work relationships evoke a sense of hierarchy (e.g. a clerk, a factory worker)or servitude (e.g. a slave, a servant, a server). Participation inherently leans towards peer-to-peer transactions which implies an increasing share of economic value will be created by non-hierarchical exchanges. For example, a ridesharing driver could conceivably be deemed as participating but not a servant.

But this is an over-simplification. It is naïve to expect information can create a more equitable and inclusive society on its own volition. In fact, information creates opportunities for exploitation and the exercise of coercive powers. Hence, sharing and the information platforms has been heavily criticised for its use of information to mistreat labour. A paradigm of participation cannot be regarded as genuine if it is hierarchical and if it doesn’t offer choice. Flexible work currently expands choice for employers but there are issues in relation to the freedom of choice for a large number of participants.

Hence, a paradigm of participation must be underpinned by rules to promote inclusiveness and to protect choice. Under this paradigm, economic value is created by participation to serve each other’s needs on a voluntary basis. The feudalist forces that push for hierarchical structures should be diffused by expanding choice at the bottom of the pyramid.

Hence, wholesale reforms are needed to manage the transition from a legacy industrial-employment paradigm towards an information-participation paradigm. The regulatory framework needs to be recast to regulate participation rather than labour. This would require aligning rules with facilitating diverse workstyles[5] to expand choice for workers. Individuals should be able to freely choose to work for as many hours and as many companies as they like. An active market for participants would place pressure on the private sector to bid higher prices if they want to secure labour.

In particular, the public and private sector roles also need to be redefined to address the changing ways in which individuals participate in the creation of social and financial value in the economy. In my view, governments should expand their role in building a robust infrastructure for participation. In particular, they should intervene in areas where markets have harmed social interests. Hence, governments should focus on raising the standards to improve the quality of jobs and to protect the baseline for participation.

The modern version of participation is data-driven. As reflected by the success of platforms, participation generates data and data expands the scope of activities. Even when participants are passive, their data contribute to the creation of value. The central role of information gives rises to substantial issues in relation to the collection, use and ownership of data and the definition of personal and privacy rights.

A good data framework is crucial to solving the coordination challenges for participation. In this context, it is likely there isn’t a big single solution for participation but rather many small initiatives to solve specific problems at the local level. An overarching platform could therefore improve the efficiency of identifying and mapping individual capabilities with societal needs and facilitate coordination or self-organisation. Hence, various schemes such as for training, apprenticeships and job guarantees should not be launched in isolation but in a cohesive manner to support other initiatives to create good jobs. A good data framework would also facilitate tracking, reduce inefficiencies and fraud and strengthen policy implementation effectiveness.

The participation paradigm should also incorporate a more positive attitude towards technology. Kerstin Jürgens, Reiner Hoffmann and Christina Schildmann point out “the transformation of human machine interaction thus offers new opportunities to shape work and production processes, relieve workers of routine activities, develop workers’ skills and, not least, make it easier to achieve a good worklife balance…This also opens up new possibilities for participation in work, as assistance systems can help to compensate for physical or sensory impairments. Older workers can work for longer and more healthily, and people with disabilities can take on jobs which were hithertoclosed to them”.

Overall, the shift in economic paradigm from employment to participation is an integral aspect of the transition to an information society. It signals a fundamental change is taking place in the relationship between individuals and activities in society where information has a major role in creating work. The economic paradigm of participation requires a shift in policy objectives from maximising output towards answering the question of whether we are managing human capital well. The sharing platforms have achieved tremendous success in unlocking under-utilised assets. In the same manner, a policy framework built to maximising the use of human capital (particularly around unemployed individuals) provides an intriguing approach to complement the firm- and market-driven systems to meeting economic and social needs.

References

Kerstin Jürgens,Reiner Hoffmann, Christina Schildmann (2018) “Lets transform work!”. Recommendations and proposals from the commission on the work of the future. No. 376 Hans BöcklerFoundation’s Study series (Hans-Böckler-Stiftung edition). https://www.boeckler.de/pdf/p_study_hbs_376.pdf

Lei Delsen (August2016) “The realisation of the participation society. Welfare state reform in the Netherlands: 2010-2015”. Radboud University, Institute for Management Research. file:///C:/Users/user/Downloads/nice_16-02.pdf

Phuah Eng Chye (8 December 2018) “Future of work: Re-defining work (Part 4: Creating jobs from information and its ecosystem)”.  Economicsofinformationsociety.com. http://economicsofinformationsociety.com/future-of-work-re-defining-work-part-4-creating-jobs-from-information-and-its-ecosystem/

PhuahEng Chye (27 October 2018) “Future of work: Redefining work (Part 1: Transition to a high-information environment and the definition of work)”.  Economicsofinformationsociety.com. http://economicsofinformationsociety.com/future-of-work-redefining-work-part-1-transition-to-a-high-information-environment-and-the-definition-of-work/

Phuah Eng Chye (8 September 2018) “Future of work: Aligning workstyles and policies to accommodate flexible employment”. Economicsofinformationsociety.com. 

Phuah Eng Chye (25 August 2018) “Future of work: Challenges from the changing organisation of employment”. Economicsofinformationsociety.com.

Phuah Eng Chye (28 July 2018) “Future of work: Information disruption”. Economicsofinformationsociety.com.

Phuah Eng Chye (23 June 2018) “Labour share of income (Part 5: The quandary of labour reform)”. Economicsofinformationsociety.com.

Phuah Eng Chye (10 March 2018) “Organisation of households: Shrinking households, labour market frictions and societal cultures”.  Economicsofinformationsociety.com. http://economicsofinformationsociety.com/organisation-of-households-shrinking-households-labour-market-frictions-and-societal-cultures/


[1] Phuah Eng Chye “Future of work: Challenges from the changing organisation of employment.”

[2] Fragmentation of work can be considered as a variation of rationing working hours.

[3] On social support services.

[4]Phuah Eng Chye “Future of work: Challenges from the changing organisation of employment”, “Future of work: Information disruption”.

[5] Phuah Eng Chye “Future of work: Aligning workstyles and policies to accommodate flexible employment”.

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