Economies of scale and stable markets (often supported by monopolies, oligopolies and regulations) protected large companies like BA from competition. If you worked for a smaller company, then you only competed with other local services and industries. The focus of these companies was on the production of goods and services at a reasonable price and in a form that consumers would not reject out of hand. Research and development departments did exist, but they tended to change around the margin, and costs could be planned for, thanks to unions negotiating wage rates for entire industries.2
That’s not to say, of course, that national economic activity took place in complete isolation. There has always been economic integration and trade within and between nations. We may have assumed that globalisation is a recent phenomenon because we tend to take a local view of history. In fact, for thousands of years there have been complex networks of trade across regions.3 Putting a precise date on the origin of these global linkages is difficult, since it depends on factors such as human migration, improved transport links and ever more substantial trade. Whatever the answer, the important point is that the forces that transcend the local have been operating for a very long time.
However, globalisation, as distinct from global history, emerged in the wake of the Second World War, following the agreements reached in the Bretton Woods Conference in 1944 that led to the establishment of truly international trade institutions.4 Before 1944, trade was constrained by the sheer cost of moving goods around the world, the difficulty of sharing information across countries, and defensive governmental protectionism. After 1944, moving goods around the world became increasingly cost effective; developing technologies enabled information to be rapidly shared across much of the world, and government barriers to trade began to dissolve. As the goods and services available began to globalise, so consumers transformed the way they thought about meeting their needs. Rather than simply buying from the local supplier, people in many countries began to have a real choice. The result of this era of trade liberalisation was that the world volume of trade in the manufacturing sector rose 60-fold between 1950 and 2010.5
As we take a closer look at how the forces of globalisation will impact on work in the coming decades, I have selected eight pieces about globalisation that I believe to be crucial and which will become part of the future storylines.
1. 24/7 and the global world: since the 1940s, the combination of political will and motivation and technological innovation has created the means to join up the world and, in so doing, has pushed ever greater globalisation.
2. The emerging economies: probably the biggest globalisation story since 1990 has been the emergence onto the world’s manufacturing and trading stage of emerging markets from China and India in Asia, to Brazil in South America. With large domestic markets and increasing determination to export goods and services, these emerging markets have rewritten the rules of global trade.
3. China and India’s decades of growth: since the Cultural Revolution in China, and the liberalisation of markets in India, both countries have experienced massive growth – fuelled by a joint domestic market of over 2 billion consumers, and the capacity to be the ‘back office’ and ‘factory’ of the world. As we shall see, as the goods and services created by workers in these countries move up the value chain, so too the global aspirations of local companies increase.
4. Frugal innovation: once seen primarily as the manufacturer of the West’s innovations, the developing markets are increasingly leading the world in low-cost and frugal innovations that are now being exported to the developed markets of the West. This will have a profound impact on the globalisation of innovation over the coming decades.
5. The global educational powerhouses: it’s a numbers game. With a joint population of 2.6 billion in 2010, predicted to rise to 2.8 billion in 2020 and 3 billion in 2050, India and China are rapidly becoming key to the talent pools of the world. Added to that, a propensity to study the ‘hard’ scientific subjects, and investment by local companies in talent development, will ensure that increasingly companies will look to India and China for their engineers and scientists.
6. The world becomes urban: from 2008, the proportion of the world’s population living in urban centres outweighed those in rural centres, and the trend will continue. At the same time, innovative ‘clusters’ around the world are attracting a disproportionate number of the most talented and educated people. The mega-cities of the world, often ringed by gigantic slums, will become home to an ever-greater proportion of the population.
7. Continued bubbles and crashes: booms and busts have been features of economic life for centuries, and we can expect them to continue to rock the world in the coming decades. This is combined with a need for the populations of many developed countries to rein in their spending, and to substantially increase their savings.
8. The regional underclass emerge: we can expect that in an increasingly connected and globalising world the underclass, while still located in specific regions (such as sub-Saharan Africa), will also extend across the developed and developing worlds. This global underclass will be marked by their inability either to join the global market for skills or to have the skills and aspirations to become one of the army of service people who care for the needs of the growing ageing urban populations.
From the 1950s onwards globalisation has been one of the driving forces in the shaping of how we work. As we can see from these pieces, this is only likely to increase, bringing with it both positive aspects in terms of an ever-increasingly global marketplace for talent and work, and also a darker aspect of continuously growing competition and fragmentation.
The force of demography and longevity
This, above all other forces, was the topic that most fascinated the members of the research consortium. We quickly understood that technology is changing everything and will continue to do so, and that natural resources are depleted and carbon footprints must be reduced. However, it was demography and longevity that really captured the attention of many of those in the Future of Work Consortium. I guess the simple reason is that the force of demography and longevity, more than any other forces, is intimately about us, our friends and our children. It’s about who is having babies, and how long these babies are going to live. It’s about how many people are working, and for how long. It’s about the four generations and how they are going to love and possibly hate each other. Demography and work are intertwined – and understanding the hard facts of demography is crucial to crafting a reasoned view of the future of work. There are three key aspects of demography that will influence work in the coming years – generational cohorts, birth rates and longevity.
Generational cohorts are people born at roughly the same time, who as a consequence tend to have rather similar attitudes and expectations. They are often brought up with the same child-rearing practices and have similar experiences as teenagers and young adults. This is a particularly sensitive period for acquiring a moral and political orientation. These shared experiences produce what has been termed ‘generational markers’. These are important since they provide clues about how these generations will behave as they move into positions of decision-making at work and have increasing access to resources.
By 2010 there were four distinct generations in the workforce – the Traditionalists (born around 1928 to 1945), the Baby Boomers (born around 1945 to 1964); the Generation X (born around 1965 to 1979) and Gen Y (born around 1980 to 1995). Coming up are Gen Z (born after 1995). The Traditionalists had their main impact on organisational life between 1960