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By Designdialogues, on January 29th, 2013 From AP and reposted everywhere: Recession and technology killing off middle-class jobs
Entire employment categories are beginning to disappear faster than labor economists had believed as computer software, robots and other devices become more sophisticated and powerful — and millions of more jobs will follow suit
Five years after the start of the Great Recession, the toll is terrifyingly clear: Millions of middle-class jobs have been lost in developed countries the world over.The situation is even worse than it appears. Most of the jobs will never return, and millions more are likely to vanish as well, say experts who study the labor market. What’s more, these jobs aren’t just being lost to China and other developing countries and they aren’t just factory work. Increasingly, jobs are disappearing in the service sector, home to two-thirds of all workers.
They are being obliterated by technology.
Year after year, the software that runs computers and an array of other machines and devices becomes more sophisticated and powerful, and capable of doing more efficiently tasks that humans have always done. For decades, science fiction warned of a future when we would be architects of our own obsolescence, replaced by our machines; an Associated Press analysis finds that the future has arrived.
“The jobs that are going away aren’t coming back,” says Andrew McAfee, principal research scientist at the Center for Digital Business at the Massachusetts Institute of Technology and co-author of Race Against the Machine. “I have never seen a period where computers demonstrated as many skills and abilities as they have over the past seven years.”
The global economy is being reshaped by machines that generate and analyze vast amounts of data; by devices such as smartphones and tablet computers that let people work just about anywhere, even when they are on the move; by smarter, nimbler robots; and by services that let businesses rent computing power when they need it, instead of installing expensive equipment and hiring information-technology staffs to run it. Whole employment categories, from secretaries to travel agents, are starting to disappear.
“There’s no sector of the economy that is going to get a pass,” says Martin Ford, who runs a software company and wrote The Lights in the Tunnel, a book predicting widespread job losses. “It is everywhere.”
Corporate culture, and executives seeking extreme profits from short term thinking are largely responsible, as it is humans making decisions about technology motivating this trend, rather than technology as agency. So-called conservative politicians are egging this on as hard as they can, if you recall Romney’s campaign.
So if we plotted a multifactorial system of reinforcement of productivity extraction since the late 90’s, with each so-called “financial crisis,” or market decline, many corporations have extracted more productivity from less labor by instituting ever more clever rounds of layoffs and the resulting fear dividend that each cut generates among its harder working but demoralized workforce. Headcount is not replaced. After a while, this adds up.
The Toronto Star asks (today) where the supposed new jobs are that Harper’s people claim have flooded Canada with prosperity. Its not clear on the ground of the real economy that this is so. The housing market across Canada shows a near-term secular trend of asset deflation, exactly as occurred in the US after the suburban house-building construction economy boom of Bush’s “ownership society.” Too bad all housing “feels” local, because Canadians didn’t notice they were being played buy conservative policy intended to goose up construction jobs to bridge the economic crisis period. Yes, as new residents and US citizens, we were lied to twice, and experienced two false economies, both with real effects on personal wealth and trust.
In a similar vein, Paul Krugman notes the trend in social services (disability) based on demographics and takes on the American political shibboleth that people have become “takers” of government services.
When rent seeking and productivity extraction are the main formula maximizing profitability, its harder to wring more from the system at some point. Yes, robots will take North American jobs because we let that happen. In Tokyo, where they invented the modern labor saving robot, people have all sorts of make-work jobs as a type of cultural solidarity and pride. You will see things like two grown men as street crossing guards working a hotel’s parking entrance, for stopping pedestrians to wave in about 5-10 cars an hour. All day. They make a living, so that others might. Why can’t we do a reasonably modern version without worrying about the executive bonus that might suffer from this extension of middle-class values into the work culture?
See the comments in Krugman’s column. People get it, but have no idea what to do about it …. Such as this quote from “LG, Indiana”
Work is a funny thing. At my last position, there were quite a number of people who could not work quickly, see well, walk fast, but could do a certain limited set of things pretty well. They were all forced to take disability basically because they couldn’t keep up with the fastest employees. When they were forced out, they were not replaced. Their jobs landed on the remaining faster employees, each of whom knew that the budget axe comes like a lion for the next slowest. The increase in productivity was great for the employer, not so great for society – more people dependent on the tiny income they get from disability, more people unable to stay home when they’re sick, more people becoming nervous wrecks, with high blood pressure, heading for disability. There is always a hindmost for the devil to take in this economy. Better to work as you can, and get paid well enough to be a consumer, but no single employer is going to follow that reasoning.
True, that. Only citizens can end this cycle, Voting wisely (and remembering how bad policy happens) is only the first step. The next step is organizing.
By Designdialogues, on January 1st, 2013 Shifting (Successfully) to a Knowledge-based Economy
The fundamental basis of the knowledge-based economy has shifted from manufacturing (product-based) economies to production based on services and service management. The advanced economies of the US, Europe and Japan have already shifted largely to service provision. As this period has overlapped with the offloading of mass manufacturing to developing economies, the attendant disruption of skills, work, educational models, and management has been seen in fits and starts. Unlike the huge shift from the industrial age to the information age (that disrupted the 1970’s and led to the boom in the 1980’s), the service economy shift is highly configurable, and the disruption is not so obvious. Our companies and suppliers are now producing mixes of products, managed services, information technology, media, and self-service systems, a mix of offers and value that constantly changes.
We in the advanced economies are also leading and producing a cross-sectoral shift from producing products (the embodiment of industrialization) to co-creating services (the embodiment of information as promised in the knowledge economy).
However, we have not yet perfected our processes, methods, and most importantly our mindsets for designing and producing values as sustainable services. We work in sophisticated organizations , in multidisciplinary teams, and with high-value added knowledge resources; yet; we continue to conceive of, frame, make, market, and sell our offers as products. We haven’t completely made the shift to a service mindset, or a service-dominant logic.
By having one foot in the product world and one foot in the services arena, we are likely not benefiting from the sustainable economic and customer value that comes from organizing and offering a clear service value proposition. Our product portfolios and product profits could be vulnerable the longer we wait to make this shift.
Moving to Service Logic and Service Systems
Service marketing and service design have been in development for decades. Since we hold a conventional mindset about the difference between products and services, we have tended to design services with an outdated business logic. We generally believe products to be a tangible goods that customers can take possession of and services to be an intangible offering that delivers value without the customer taking possession. Services are perishable and temporary – a customer cannot “own” an airline trip much less even the ticket for its exchange. Services are defined as “a means of delivering value to customers by facilitating outcomes customers want to achieve, but without the ownership of specific costs and risks.” (ITIL v3, 2011)
Steven Vargo and Bob Lusch heralded the shift to service logic in their 2004 article “Evolving to a New Dominant Logic for Marketing.” The bias toward tangible goods is deeply embedded in historical culture, from the value of operating and becoming expressed (and thereby continually reinforced) in language and metaphors, such as “market penetration”, “capture”, “segmentation.” The language of service logic is still being formulated and suffers somewhat from the limitations of the few English words relating to services rooted in the verb “to serve.” One role of the service innovator will be reframing the language presenting services to embody a new series of roles for engagement with customers and suppliers that is based on co-creating value and not on products or transactions.
Service-dominant logic is based on eight foundational premises, which, if applied to knowledge-based products and services, help us reframe the location and the meaning of value. These premises are:
- The application of specialized skills and knowledge is the fundamental unit of exchange.
- Indirect exchange masks this exchange process – so we are out of touch with the customer.
- Goods are distribution mechanisms for service provision – everything is a service.
- Knowledge is the fundamental source of competitive advantage – knowledge is a renewable resource.
- All economies are services economies. The implication being that any product can be part of a service system.
- The customer is always a coproducer – value is co-created and realized by the customer in their application of value.
- The enterprise can only make value propositions – Value is not added, it is determined by the customer in the application to their needs.
- A service-centered view is customer oriented and relational – interactivity, customization, integration of the provider with the customer.
Our businesses and organizations, marketing strategies, accounting systems, and value propositions have not yet been able to capitalize on this shift in mindset and approach. In fact, only very few companies have made this shift and made it well, as the habits of manufacturing, product and resource economies are centuries old and deeply embedded in language and customer habits as well.
The new customer-centered service logic requires a different approach to competing on innovation and functions of design. The brand does not refer to a product relationship in the customer’s mental model. It now refers to a service resource that can fulfill value propositions for completion of services necessary for the customer’s business. The service offering now becomes positioned as configurable value in the center of a value constellation (Normann and Ramirez, 1993). The mobility of content and ubiquity of interactive interfaces enable infinite configurability of a value constellation among multiple providers and touchpoints in a service system or network of offerings.
Reframing and Redesigning Products as Services
The guidance from service management and service design strongly suggests that product lines are not merely positioned as services (which then become services sold as products with product margins). Products are instead reframed as service offerings, changing the logic, the value proposition, the design of the offer, and the design of the interactive experience. This co-produced service entails the customer, as in a conversation, in a dance of value co-creation.
Richard Normann (2001) calls this process “servicification”, one of several configurations of value for reframing products and reframing the business itself. This unwieldy term refers to the position of meaning and function in the customer and user’s world. Normann named three reframing concepts:
- Servicification – Offerings are changed from outputs of a production process to inputs of customer value creation.
- E-ification – Offerings are provided in formats that can be unbundled and rebundled into new configurations uniquely meaningful to customers. (E-ificiation is not only e-business but is also indicative of dematerialization of functions, enabling a transparent experience for customers.)
- Experiencification – Offerings are linked to the symbolic and mental processes of customers and users. (They experience an interactive relationship with a service system that connects to their work, the customer’s production of meaning and purpose.)
There are others we might add to Normann’s, expanding beyond his model of enhancing the density and value of the customer relationship. While gamification was developed later than Normann’s model, the provision of game logic in most offers is a form of experiencification and adopts a related design process to create experiences based on game journeys, quick wins, intermittent reinforcement, and so on.
Consider a model of financial services having moved from a direct service model to an online product presenting itself as a service. Financial services changed immensely as brokerage services moved online. They essentially moved services to efficient and profitable products, much like the travel industry. While presented as self-service, the offering feels to the customer as being received as a productization strategy, not a true service with the customer.
Many of the service channels of a financial investment site—trading, tools, retirement, client services—behave more like product features. There is little sense of co-creation of value, where their functions serve as inputs to the customer’s financial strategy. The message received is “I’m a user, I take all the risk, and manage the whole experience.”
Some of the qualities of this mixed-model approach are effective service experiences:
- Human-staffed customer service is usually available and supportive.
- The online experience can be highly interactive. It involves both Push content and a Pull service.
- The brand is usually trusted and well-understood.
But many qualities are not conducive to building long-term value with customers:
- Sites are designed as a collection of features, not rebundled for the customer needs.
- The self-service model is transactional and not co-created value.
- Customers select the platform provider based on fees and product usability, not total value. (It’s difficult to assess total value from a financial services site.)
- The customer conforms to a specific business model and cognitive style.
- The service is not expected to be a long-term value proposition. Switching costs are low.
How would customers assess our products and services? Do we know how customers really work with our services as inputs to their knowledge creation processes? Could we produce interactive experiences that are more “densely bundled” for their value?
A service is fulfilled when a change in condition is registered by the person receiving the output of an economic activity—that is, from a supplier. In designing for health, facilitating the effective change of a health condition is the primary goal; yet, no single design approach will serve and satisfy every service requirement. Not only are different methods necessary for the different types of healthcare modes and types of patients, different philosophies, schools of methods, and consultation approaches are necessary for different service problems.
The Service Design Path to Innovation
The defined practices of service design offer a framework of methods for reframing products as services, although admittedly still seek the perfect fit. According to Birgit Mager, founder of the Service Design Network, service design “addresses the functionality and form of services from the perspective of clients. It aims to ensure that service interfaces are useful, usable, and desirable from the client’s point of view, and effective, efficient, and distinctive from the supplier’s point of view.”
Service design has developed well beyond the baseline of user experience (UX) methods to multipoint service offerings and the creation of intangible value, such as a positive emotional experience. Published service methodologies lead with a wide array of UX and adapted design methods; yet, little consensus is found across design disciplines with respect to service models in our fields. We might see one goal in moving to a new service usability.
We in the advanced economies have made our products usable to general user audiences and for specific workflows, and have some of the best user interfaces for any content platforms in the world. And, changing the logic to one of service innovation might require very different types of interactions and interfaces from the traditional product strategies. Some of these options might be designed as:
- Designing search, displays, and content streams tightly coupled to high-value customer’s specific intellectual workflows (which some products are already attempting)
- Creating a true brand experience for customer relationships, independent of product identity
- Creating a tighter coupling of trusted human interfaces (customer support) with online interfaces (content and search features)
- Providing multiple configurations of offerings that appear customized to the customer’s value creation process
- Unbundling content streams from interfaces and features so that new multi-licensee /vendor constellations can be formed for the ultimate customer’s process
- Designing interfaces that enable customers to exchange and co-create value with the company. For example, providing terabytes of cloud storage with backup in exchange for summary or meta-data analysis that would enable us to define better analyses services; or, providing analytical insight as a high-end form of customer service for special contracts.
Our customers have extremely sophisticated knowledge-based work practices and may come to take content services as online commodities if our service value offering is not demonstrably meeting their knowledge input needs. As a result, we may start to rethink experience and product design, product and content management and system development to gain this new ground.
References
From talk given at World Usability Day 2012, LexisNexis, Dayton USA
By Designdialogues, on December 14th, 2012 For over 10 years (at least since the 1997 Dorothy Leonard article Sparking Innovation through Empathic Design) design research has advocated the practice of empathic design, listening closely to customers and learning from their behaviors to innovate for unspoken “needs.” We might consider this common knowledge at this cycle of practice, or even “common wisdom.”
The U of Chicago Wisdom Research project discussed recent research in medical education indicating that medical students significantly lose empathy starting in 3rd year: “Are our medical students failing “Wisdom 101”?
The interpretation suggests the possibility that the education process somehow drives out naturally occurring empathy in young physician trainees. The consideration is also drawn that empathy itself – perhaps defined in a range of nuanced ways – is inherent in wisdom. Yes and no … and maybe.
My response to the article (edited for context).
This is reflective of medical school itself. There are different purposes for the phases of medical education. Third year is the first full clinical clerkship year. This is the year students follow each specialty into their rotations and observe and learn procedures for the first time. Remember, medical students are not practicing and are not even engaging with the patients, nor should they be yet. They are basically shadowing and learning technique. To do this effectively, they may need to separate from the patient-as-person for a little while to learn how to do often-invasive procedures without feeling for the patient too much.
Could we be are over-valuing the purposes of empathy? Empathy is necessary but not sufficient. Even animals (our pets in particular) have empathy for humans and other animals, or at least highly intuitive sympathy. So I don’t see that empathy is (itself) a marker of wisdom. Empathy is a necessary ingredient of Care, which may be an essential foundation for wisdom. Caring is an active expression of empathic understanding informed by the larger system of interactions. (Perhaps care is closer to wisdom, as it is an informed empathic response that also seeks to restore health or happiness, to repair the situation yielding the need for care).
Going back to the medical students, where empathy should be measured is in third year of residency, where physicians start practicing in earnest and have learned all the procedures. At that point, we have the right to expect a professional sense of caring as well as the humanity of empathic feeling. Could it be that professionals demonstrate a learning cycle of empathy?
Doctors can learn to recover their original empathy as they earn wisdom in their careers. But you do want them to perform their first injections and aspirations skillfully, and that may mean separating from your feelings as a tender human patient so they can do things we all know will hurt.
This is an interesting intersection of research inquiries. We encounter the embedded assumption that good physicians are empathetic, or at least that we – as customer patients – expect them to be empathetic as a matter of training and trait. While those of us not in medicine may believe empathy to be a necessary quality of physicians (certainly of nurses), there may be no relationship between empathy and quality of care. The main reason we seek professional medical care is to recover and restore from a concerning bio-physiological condition or disease. The quality of care may be measured by the best knowledge of diagnosis and quality of procedures to alleviate the condition and the body’s response to it.
Perhaps an active orientation to care, which includes empathy, is the demonstration of wisdom. Performing care requires not just empathy but foresight based on empathic understanding (e.g., how might this patient’s life situation play out in a month or a year?) Care accounts for both understanding of the health-seeking patient’s context (empathy) and the types of treatment and their impact on life (foresight). Care is the ability to take community and relationships into account, not just the individual’s feelings at that time.
Now, is empathy or care a requirement for wisdom? Empathy may a trait we observe in people considered to be wise. Whether that correlation is causative of wisdom or perhaps an outcome of being “wise”, we may not know without research. Which leads to further questions of:
- How do we define wisdom as a trait, or in behavior?
- How do we measure or interpret wisdom in persons or in roles?
- Is the DIKW pyramid of Data-Information-Knowledge-Wisdom really a valid interpretation of the hierarchy of meaning? Does “real wisdom” extend from knowledge as a higher form of knowing?
- Is wisdom an emergent quality learned from experience, or could people be “born wise?”
- To what extent is wisdom related to good foresight? Is a person wise if they can perceive possible future outcomes well beyond the present, in the face of resistance from contemporaries? Especially when these outcomes occur (and the original resisters forget?)
Cross-posted on Design for Care.
By Designdialogues, on November 14th, 2012 Futures of Healthcare Service Innovation
I’m at the Medlove 2012 event in Berlin, next week Friday Nov 23 – for a day of conference presentations and design concepts in healthcare UX and service design. A practitioner’s conference, Medlove is organized as one of the series of European design and UX meetings. Design for Care is in editing and not yet on the shelves, so I’ll be presenting a central idea of the book:
Our personal health is only as good as the resilience and care in our communities. Healthy future living depends on our co-creating beneficent conditions for well-being. Traditional and complementary healthcare practices are intimately a part of the new community model.
Health 2.0 has been captured by the imagination of Health IT, H2.0 startups, app builders. However, there’s a real world limit to the impact of any IT. The Internet will not help you if you’re actually sick or depressed. People in your actual social worlds have the ability to touch and express care. People and their shares inside software apps have a quite limited range really.
Current and future challenges in healthcare delivery within human settlements are not fundamentally information technology problems. The most significant needs and emerging opportunities in healthcare are found in its delivery and business models, and organizational design of care systems. Let’s not look to lead with technology but position it as an enabler in coordination and communication, as in any customer-centered service system. Leading institutions are making dramatic and systemic changes to healthcare service in health systems and communities in North America now. What will be next?
- Can Health 3.0 enables new services for care communities?
- Distributing health care resources among different communities of care: Person-Family, Person-Community, Patient-Patient, Patient-Providers, Providers-Community
- Community health as a generative social system – circles of care in real-world social networks
By Designdialogues, on September 21st, 2012 Canada’s research council for social science and humanities, SSHRC, funded six regional panels to understand and imagine possible futures for the country in a global context through the next two decades. Strategic Innovation Lab (sLab) at OCAD University led a panel for the Southern Ontario region, in partnership with University of Ontario Institute of Technology (UOIT), Ryerson, Windsor and York universities and our combined intellectual communities. The panels were charged with defining their Top 10 challenge areas for which future research strategies would be applied. Each regional panel employed a different methodology, some of them grounded in public engagement to explore the futures question, some (like OCADU’s) were based on a foresight method.
This week SSHRC research leads and panel leaders attended a two-day scenario workshop in Ottawa led by Scenarios to Strategy on the same focal question. The workshop employed the classical scenario method for a large group of senior stakeholders, 36-40 people over the two day period. The focal question was aligned to the same research remit, identifying the future challenges for Canadian society in 20 years that would represent the highest priority for social sciences research.
The public report will be linked here when available. In the meantime, the OCADU team is completing our report on the August 22 Dialogic Design Co-laboratory held for the same question:
“In the face of intensified urbanization worldwide, what do we see as the highest impact social and human challenges for Southern Ontario, now through 2030?”
On the Strategic Innovation Lab website we share the process and discussion of the OCADU panel, a day-long workshop based on Structured Dialogic Design. The results of the Co-laboratory are represented in a categorized set of 91 challenge statements generated by 18 invited participants (mostly senior academics and prominent community leaders, across a wide range of disciplines). An influence map articulating the relational network of the top 13 challenges was mapped out as part of the process.
Our knowledge mobilization strategy involved holding a half-day publicly accessible workshop to present the ICF concepts and generate a new set of responses, to both inform and validate the panel. we held a dialogic design workshop at the September Design with Dialogue, with 22 mostly younger participants, from arts, design, and creative business and 4 facilitators (two visual recorders). Five rapid scenarios were visually constructed and presented following a 2 hour framing and idea generation phase, where we structured the session to produce only a single challenge per participant. Nearly all of the challenges (a sample of which are on the wall) matched directly or aligned well to the top-voted urbanization challenges from the official panel session.
Participants broke out into 5 small groups of 2-5 and selected a core set of challenges they believed they could address, producing five rapid visual scenarios and narratives around the issues.
The visual map illustrates the five scenarios in a single image, the separate scenario presentations are found on the DwD website.
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Innovation of / in Reality What is happening right now that brought you here today?
Design Dialogues exchanges points of view on design-led innovation, social research, and systemic design. One viewpoint is that my ideas may be evolving, and not final. I do invite you to share your ideas and responses. @redesign is always a good start.
What's the innovation of reality? Our economic and social institutions have hit peak governance. This means (roughly), all decisions from 2008 on will cost twice as much to employ. Yet our systems have defended themselves well from structural innovation, while they continue to demand (micro) "innovation" to sustain their grasp.
Societal systems have grown beyond their capacity to transform by management. Yet they are largely designed to disarm bottom-up change. Collaboration alone is insufficient - We truly need new cultures of co-innovation, collectively deciding, and socially organizing.
A community of practice meets for dialogues in person every 2nd Wednesday in Toronto:
Art, science, and design are different ways of knowing. In the arenas of action (business, community, and social co-creation) they regenerate each other. All ways of knowing are invited to the dance of change, if we are to interfere & reinvent our values and systems to open these possibilities. Your participation is requested, and required.
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