Since the Ronald Reagan and Margret Thatcher days, we have been moving toward a shift in risk from the employer to the employee. Neo-libertarian free trade and globalization have become our mantras, with the accompanying cultural change. Free trade looked like a way to generate more demand and thereby create more jobs than it destroyed. This creative destruction was viewed to be a good thing, leading to an increase in the quality of life and better living for all. It wasn’t until our banks ran amuck that we realized the emperor had no clothes. Unfortunately, like the introduction of new technology, free-trade and globalization have created a class of displaced and contingent workers who are now part of the Free Agent Nation, as described by Thomas Friedman, or The Creative Class put forth by Richard Florida. In a recent book, Nice Work if You Can Get It, Andrew Ross explains why we are all veritable sweatshop workers now.
Ah, yes. Contingent workers – that’s all of us. People tend to stay put, but work goes to where it can be done most efficiently and at the lowest cost. Capital moves to where it can receive the highest return on investment for the least risk. Risk then shifts to the employees, and wealth becomes increasingly concentrated in the hands of a few. If you’re on the wrong side of the economic divide, “free trade” may not necessarily be free.
Globally networked companies have taken the work they need to do and contracted it out at the speed of light to the cheapest possible contingent workers. The amount of work that needs doing has contracted in the face of a stalled economy. Once consumers became consumed by their consumption, the work and therefore the jobs that this demand had created left the marketplace. Governments are attempting to replace some of this work through public projects.
Economic development organizations can do more for their regions by thinking differently about what they can offer. What if, instead of attempting to recruit companies, economic development entities focused on recruiting work? If you think about it, economic prosperity is determined by where work gets sourced and who performs it. While recruiting companies may be a little more straightforward than getting work sourced in a particular geographic area, the latter may be far more important.
How does an economic development entity go about recruiting work? First of all, figure out who has work that needs to be done. Next, understand your competitive advantage and what work your workforce is capable of performing (or could do with some additional education and training). Then you would need to figure out how work gets sourced, who the decision-makers are, and how they go about making this all-important decision. Lastly, you need to create an effective strategy to solicit the work.
In these uncertain times, an economic development paradigm-shift from recruiting companies to recruiting work will be difficult to make. Overcoming the political and social resistance to change is a daunting task. The risk for many organizations will be too great. However, those who take on this challenge will find it to be as rewarding as it is difficult. What about you and your organization…are you already there? Can you make the world of work less contingent for your region’s workforce, and thereby strengthen your region as a whole?