Measured by pace and scale, the current transformation of the workplace is 3000 times more intense than the original industrial revolution; it's hard to argue that the Future of Work is not the issue New Zealand business currently needs to respond to.
However, there is a Kiwi colloquialism that sums up my concerns about how we will mount our response: "We saw it early, but were a buck short and a day late."
New Zealand politicians and business leaders are engaging on the Future of Work topic far more proactively than other advanced nations.
The Labour Party's 2015 manifesto on the Future of Work was ahead of its time, and I am consistently impressed by how abreast of the issues NZ business, union and civil society leaders are. When it comes to the Future of Work, as a country we have indeed seen it early. However, how do we make sure we follow through?
● First, we must be relentless in capturing the massive productivity improvement potential of the Future of Work. New Zealand's productivity growth in recent years has been woeful, but the good news is the Future of Work offers our best opportunity to restart productivity growth.
In the New Zealand context there are a couple of issues we need to focus on — one, we are a nation of small and medium-sized business. In the past SMEs have been handicapped by big technology-driven productivity improvement opportunities that were only available to the "big end" of town — ERP IT systems are a case in point. However, the beauty of the Future of Work is that the technologies can be applied at small scale.
Cloud-based analytics solutions work as well for a 10-person company as for a 10,000 person company. We will not shift the needle on productivity improvement unless we drive the Future of Work deep into the heartland of Kiwi SMEs.
● Two, the Future of Work will eliminate tasks, not necessarily whole jobs, and recent McKinsey analysis shows that key to capturing the productivity benefit is effectively redeploying the resulting freed-up time. This is most powerfully done with new ways of working. Agile, "no-collar" jobs, internal sharing economy models all offer pointers to the future. This is not about "casualisation of the workforce" but how to create a more productive, flexible and engaged workforce, enabled by new tools. There is an emerging class of frustrated CEOs globally who "half-did" the Future of Work; they invested sufficiently to eliminate the tasks but did not push hard enough to build the new working environment to redeploy. They successfully "added cost", but did not reap the productivity benefit. Our propensity to be a "buck short and a day late" could put us squarely in this camp.
Ultimately, the Future of Work will create more new tasks and jobs than it destroys.
However, managing the transition will be demanding and as such I see the second opportunity is to build a "reskilling engine" par excellence.
What should this look like in New Zealand? At the bold end of the spectrum we probably need to take 15-20 per cent of what we spend on tertiary education today and redeploy it toward high-end vocational training. We should take lessons from the Swiss and start quality vocational education even earlier in life.
In 1999 Onehunga High School (of which I am a proud ex-pupil), pioneered a Business High School and a Construction High School, merging traditional and vocational education with great success. The recently announced rebuild of the school takes this innovation further; students will play a meaningful role in actually delivering the rebuild of the school.
On the job, the concept of micro credentialing and "badging" — where you upskill and retrain your people building step-by-step while still in the role — is starting to take hold in New Zealand. AT&T famously retrained 150,000 analogue engineers into the digital age using this pedagogy. Randall Stephenson, CEO of AT&T, described the move as "changing out the engines on a wide-bodied jet while still in the air". The current imperative is a wider collective commitment from NZ business to back our people to transition in this way.
● Third, to support the above we will need to innovate as a nation by creating a new institution that is fit-for-purpose in responding to these challenges. We have done this before; in the late 19th century when unemployment first entered the national consciousness, the Minister of Labour, Edward Tregear, put in place the world's first "job centre". He created a national matching system of jobs to people and a "mobility stipend" which paid for folks to move to where the jobs were. It was simple, but highly effective.
We now need a 21st century version of such an institution; what some are calling a "Mobility Centre".
A Mobility Centre would provide three functions: it would collect and curate high quality data as to what jobs will be created and what training leads to real work; it would procure the required training and, radically, it would share risk with the individual.
The greatest evil associated with the Future of Work is retraining employees for jobs that don't exist, or for which they have no realistic chance of getting.
In sharing this risk, employees are asked to trust the data on the probably of getting a job in a certain area and invest in the training required to secure that. In return, they can "claw back" a portion of that investment if it doesn't lead to a job, creating an aligned incentive to get the reskilling right. The Singaporeans, Swedes and Germans are taking steps in this direction. We could once again innovate to deliver a powerful new institution as a world first — but we should hurry; Singapore is moving at pace.
● Andrew Grant leads McKinsey and Company's global public sector practice and is senior partner in the firm's Auckland office.