Born in rationality, management has always welcomed science and technology as allies in its struggle to increase predictability and limit risk. The more variables that can be captured in data or embedded in code, the assumption runs, the smaller the margin left to chance and fallible human guesswork.
But in recent years, technology has itself become a source of work-related uncertainty, rather than reducing it, as tech-fuelled industries undermine old ones. Concern about jobs and security has fuelled the angrier politics that have come to the UK and US in the forms of Brexit and Donald Trump and threaten to do so elsewhere. The apprentice is running the show and the sorcerer is scrambling to know what to do.
Management is caught in the crossfire. The technological faultline ran right through proceedings late last year in Vienna at the Global Peter Drucker Forum, named after the father of modern management. Prominent thinkers gathered to thrash out their concerns.
Some techno-optimists welcome the deepening of the information era. They do not see big data, robotisation, machine learning and artificial intelligence as harbingers of a workless future. Rather, aided by the internet of things and 3D printing, these developments will end corporate wage slavery and enable an entrepreneurial society in which a skilled worker can act as an enterprise of one.
They argue that as software eats the world, use of data will strip away inefficiencies. “The society of entrepreneurs will come about — it’s inexorable,” said one speaker. “Artificial intelligence will take over our jobs. Organisations will shrink as transaction costs diminish . . . There’s a fabulous opportunity with great technology to transform the world of work.”
In the other corner are those who worry that while science is a boon, the reductiveness and hubris it can bring are not. Why should technology automatically rank economics above human desires? A speaker noted that a poll by Gallup found that what most people now want is not peace, family and security, as in the past, but a good job with a pay packet. This is a remarkable shift. When regular employment is statistically linked by Gallup to higher GDP per capita and more speculatively by other researchers to lower inequality, who is to say the respondents are wrong?
A panel chair illustrated the fork in the road with two companies: Analogic and Deliveroo. Both are valued around £1bn, but that is about all they have in common. Analogic is 40 years old, modestly profitable and employs 1,500 people making advanced medical and security equipment. Deliveroo is a three-year-old lossmaking UK internet start-up delivering restaurant meals to home diners. Its couriers are not employees but independent contractors. Some, alleging “Slaveroo” conditions, are campaigning for union rights and the minimum wage.
The jobs people want are Analogic. Those they will get are Deliveroo. Luminaries in Vienna lamented that established companies no longer do innovation or entrepreneurship. All the incentives — direct cost, tax, preferences of the capital markets — favour offloading responsibilities once borne by companies on to individuals.
That might matter less if the entrepreneurial economy was taking up the slack. But the forum heard that the US economy was ageing, with more companies dying than being born, and that the rate of new business formation had fallen by about half since the 1970s. There were “thousands of $1bn opportunities” going begging, insisted Curt Carlson, an innovation consultant. “But we’re doing a pretty terrible job at exploiting them.”
Meanwhile, companies such as Uber and Deliveroo are disrupters, but they shake up industries rather than create new ones. They redistribute value rather than generate it. What people gain from efficiencies as consumers they lose as workers, which makes this kind of innovation a zero-sum game. Some at the forum saw in these companies the beginnings of a customer- rather than shareholder-focused economy. From evidence so far, this may not be much of an improvement for wider society.
Technology is not destiny, a White House report on automation and artificial intelligence reminded readers. “The direction of innovation is not a random shock to the economy but the product of decisions made by firms, governments, and individuals.” In other words, it can and should be shaped, to amplify the best effects and temper the worst.
Peter Drucker himself would surely have agreed. Deliveroo or Analogic? Are managers taking the historic responsibility for using technology to augment and complement humanity, he might have asked. Or, by increasing insecurity, are they widening the gap for populists and worse to fill?