💪>🦾 Ai Proof Skills

I’ve done all sorts of jobs in my career. I remember my first job was building desktop computer towers as an intern, I’ve also worked retail making $5.45 CAD/hr at the electronics department of the local supermarket. I’ve also done labour jobs like managing a painting franchise when I was in University.

Ever since I had kids I’ve been super curious about the future of work. What is their career going to look like? What can I do to make sure that they are ready for the future?

When I first started researching this topic the world economic forum described this massive shift called the 4th industrial revolution. A massive shift in the world of work that they predicted would happen in 2-5 years.

As we know, lockdown restrictions have accelerated this timeline from years to mere months. As a result we’ve seen millions of jobs lost in retail, hotels, and restaurants. At the same time we’ve seen a surge in growth for online retailers, online delivery, and freelancing.

“The digital economy is transforming the world of work.” said the world employment and social outlook Feb 2021 report from the International Labor Organization [1]. They said it “is” transforming, not that it will transform. The 4th industrial revolution has moved from a prediction to a reality.

Since 2000 there has been exponential growth in the number of online work platforms, between 2010 and 2020 we’ve seen a 500% increase in the number of online work platforms that fall into two categories: web-based platforms where the work is performed online, and location-based platforms where the product or service is delivered to a location.

Today we’ll explore: the $1.2 trillion freelance economy, the future of education, and Ai proof skills. So let’s get started.

The world economic forum says that The first industrial revolution used steam power to mechanize production. The second industrial revolution used electricity and railroads to scale production. The third industrial revolution used communications techology and electronics to automate production. [1]

So what’s the difference between the third and the fourth industrial revolution?

The fourth industrial revolution leverages infinite computing power and storage to create a world of constant disruption. It is how Amazon disrupted retail, it includes sharing economy platforms like AirBNB and Uber, it also includes Gig Economy work platforms like Fiverr and Upwork.

You know it’s happening, but what percentage of workers in the US are freelancing using online platforms? 5% 10%

In 2020 more than a third (36% or 59 million) American workers freelanced using online platforms according to an Upwork’s Freelance Forward survey of over 6000 US workers. A third. These workers contributed $1.2 trillion to the US economy, a 22% increase from 2019.

The younger you are the more likely you will be freelancing. 30% of Gen Xers from (39 to 54 years old) were freelancing, while 44% of millennials (aged 23 to 38) were freelancing, the number jumped to 50% for Gen Z (aged 18 to 22) [2].

Digital labor platforms are very different from a traditional business in that the have few employees but manage the work of large numbers of people. For example, the PeoplePerHour platform has 50 employees but manages the work of over 2.4 million people. HackerRank has 200 employees yet manages the work of 11 million people. [1]

Let me ask you to comment: Do hourly wages increase or decrease when workers turn to online platforms for their income?

If you guessed decrease you are correct!

Digital workers tend to work more hours and get paid significantly less than their employed peers. Worldwide the average working week for an app based taxi driver was 65 hours a week.

We are seeing conflicting stats reported about hourly wages. Upwork reported that 75% of workers earned the same or more pay than their traditional employers in their survey of 6000 workers from the US.

I’m wondering if the earnings numbers includes the fees charged by online platforms. These fees range from 3.5% to 20% for web-based platforms and 5% to 25% for location-based platforms. This is one of the reasons why restaurants are struggling to compete against ghost kitchens.

There’s also a lot of unpaid negotiation needed in order to secure gigs. The International Labour Organization found that a third of the hours worked on web-based platforms is unpaid. A third.

Yet if we look at the numbers worldwide the average hourly earnings was $3.40 US an hour, half of those workers made less than $2.40 an hour from the survey of 12000 global digital workers. The hourly wage for those in developed countries was higher. The hourly wage for online workers in developed countries ranged from $4 to $12 US an hour while the hourly wage for those in developing countries ranged from $2 to $5.50 US per hour.

The key is that online platforms give companies a choice. It takes the exact same effort to hire a worker from a developing country as from a developed country. If the ratings for an online worker are good why pay more?

When we were growing up, our parents reminded us about the importance of education. In their generation a degree was so rare that if you had one it opened doors to many of the highest paying jobs.

So let me ask you another question: Do you think our degree impacts our hourly wage when working for an on online platform?

I was shocked when the International Labor Organization reported that people who held a bachelors degree did not have significantly higher income than those without one in both developed and developing countries.

They explained “Digital platforms are redefining the relationship between education and access to work.

You don’t need to show your degree in most online platforms, instead your ratings and reputation are more important accessing well-paid tasks.“ [1]

What happens when we have the same bachelors degree that everyone else has?

We used to say that knowledge is power. In reality, the world’s information is at our fingertips so knowledge has lost it’s power. These days it’s skills that pay the bills.

Degrees don’t tell us how well a person will perform a specific task. Instead comments and ratings for your portfolio are a far better predictor of how well you’ll be able to do the same task in the future.

Companies and Universities have noticed this trend, and now many universities offer micro-credentials, work platforms such as LinkedIn, Upwork, and Fiverr allow clients and peers to highlight and recommend skills.

It’s not all doom and gloom, freelance workers with a masters or doctorate degree earned 70% more than those without a university degree in developed countries.

“We are in an age of education inflation.” says Bryan Caplan in his book The Case Against Education. For our parents a bachelors degree was the ticket to high paying jobs, today it’s a masters, what’s next for our kids? A PhD?

Bryan argued that the primary function of education was not to enhance student’s skill but to certify their intelligence, perseverance, and conformity. He argued that 80% of an individual’s return on their education was the result of signaling to potential employers.

What happens when data and Ai is used rather than human instinct? Workers performance can be regularly assessed. The International Labour Organization found that most online platforms use ratings to determine who gets access to future work. That’s 82% of freelance online work platforms, 72% of taxi series, and 65% of delivery services.

For freelance workers we are in an era of regular monitoring: 47% reported the number of hours worked, 46% had to take screenshots of their work, and 43% attended performance meetings on a regular basis.

Getting paid as a freelancer means working until all of the needs of the client are satisfied: the reality is that 86% of workers in microtask platforms (such as Fiverr) had their initial work rejected. Disputes often defer to the mantra the customer is always right.

The terms of service for most online work platforms are mostly take it or leave it contracts that are decided by the online platform. They are designed to avoid the possibility of the worker becoming an employee. This prevents workers from receiving statuatory entitlements such as minimum wage, and social security or pension. There is currently a push to classify online work as ‘decent work’ so that statuatory protections would apply all workers.

How can we thrive in a world of Ai mediated work? While schools focus on the fundamentals 3Rs of reading, writing, and arithmetic we’ve learned that many of these skills are not unique and can be easily outsourced.

What would happen if we focused on the Future 3Rs of relate, recur, and create.

Relate

Relationships are the basis for connecting with others about our beliefs, our values, our struggles, our pains, and our fears. We purchase products that help us achieve our goals and help us to reduce the regular pains we experience.

Relationships are the foundation of many of our big purchase decisions. When I think about my first car or house purchase I often remember so many details of the people I worked with. How they helped answer my questions and thought about my perspective.

We are doing the same thing when we purchase online services. In sales we say no pain, no sale. Our job is to read between the lines and relate to pains the client is experiencing.

Perhaps in the future listening with intent, speaking with the right confidence, pace, and tonality will have more impact to our income. Sales trainers teach these techniques, they allow students to roleplay with each other using platforms like Discord, and they go out and practice them online. Even in a world of Ai, we still deeply crave connection. It’s another reason why live events are more compelling than a recorded video.

Recurring Revenue

One of the biggest challenges of the gig economy is that the amount of work varies a lot from month to month. During lockdown many freelancers saw a big drop in the amount of work they were asked to do. This roller coaster income makes it very challenging to manage household cash flow so many have to take loans in order to make ends meet for the leaner months.

The goal of being on a online platform should be to develop the skills that you know others will pay for to a level where you start having regular clients that you can charge a monthly retainer for. The key limited resource is your time, you can only serve so many clients at the same time so you need to focus your efforts on the ones that are the highest paying and fire the clients that don’t fit well with what you are doing.

To do this we need to first have skills that aren’t readily available on online work platforms like Fiverr and Upwork. Your relate skills will help you dive into deep pains that clients will pay for. Maybe that’s helping mom’s with kids who are picky eaters, or maybe it’s helping a business generate more leads through digital marketing.

Make sure that you measure the results so that you can develop a list of social proofs to show what results you can produce for your clients. Then when you’ve increased your rate enough it makes sense for clients to pay you a monthly retainer to save money while still getting the quality work they need.

We are in a world of work as a service, so make sure that you are constantly looking for skills that are in demand and leverage what you are already good at.

Create

You can get quite far with just the first two that I had described. So why add on creativity?

As I’ve mentioned before creativity needs an audience, this is the relate skill I talked about earlier. Your audience can be your family, your community, or even your society.

Deep creativity challenges the status quo. It puts you at the top of the food chain in the fourth industrial revolution. You want to be Uber and not the person whose work is mitigated by Uber. You want to be Fiverr and not the person whose work is mitigated by Fiverr.

This is a totally different skill set from what you may get taught in school. In the Education of Millionaires by Michael Ellsberg he showed how some of the most successful school dropouts were world class in relating (or networking and sales), and being disruptive creative thinkers.

To do this you will need a team that is world class in addressing the pain points of your particular niche. A team that is great at relating with potential clients and investors. A team that is good at figuring our what work they should focus on and what they should outsource to others.

I don’t have enough time to fully cover this topic in our discussion today but if you want to learn more about this topic and if you want to see the references post a comment and I’ll give you the link to the references I mentioned today.

I’ll leave you with one tip: you know those ads on YouTube that you find annoying and skip all the time. I know that many schools install Ad Blockers to prevent them from showing.

Trying watching them all the way through instead. Find out why would someone pay a lot of money in order to show you this advertisement.

It must be working, what about it is working? How could you apply this technique to your own work? What you are learning is the art of writing marketing copy. This is a skill that I teach my own kids and it’s one that helps you understand and think critically about the elements of your social media that impact how your think about the world and ultimately what you buy.

Congratulations on investing in your family today, I appreciate you, and I will see you next week where we’ll discuss the post-consent era.

References

1. World Employment and Social Outlook, International Labour Organization https://www.ilo.org/global/research/global-reports/weso/2021/WCMS_771749/lang–en/index.htm
2. Upwork Survey results, CBNC https://www.cnbc.com/2020/09/15/a-snapshot-of-the-1point2-trillion-freelance-economy-in-the-us-in-2020.html
3. 4th industrial revolution World Economic Forum https://www.weforum.org/agenda/2016/01/the-fourth-industrial-revolution-what-it-means-and-how-to-respond/