Human competitive advantage

HBS Working Knowledge interviewed Frank Levy and Richard Murnane, authors of The New Division of Labor: How Computers Are Creating the Next Job Market.

The authors argue that the pervasiveness of computers is drastically changing the mix of available jobs in the United States and elsewhere. If the industrial revolution shifted jobs from highly skilled (e.g. weaving) to less skilled (see Modern Times...), then the IT revolution may be reversing that shift to some extent.

As Levy and Murnane see it, repetitive rule-based work can and will be better fulfilled by computers. This "rules-based" repetitive work occurs most frequently in clerical jobs—particularly back office work—and in assembly line work. These jobs are also vulnerable from a second direction because the ability to describe a job in rules makes it easier to move the jobs to a lower wage country with minimal misunderstanding.

Conversely, three main types of work cannot be described in rules:

1. Identifying and solving new problems (if the problem is new, there is no rules-based solution to program).

2. Engaging in complex communication—verbal and non-verbal—with other people in jobs like leading, negotiating, teaching, and selling.

3. Many "simple" physical tasks that are central to janitorial work, waiting on tables, and other service work. (For example, entering an unfamiliar room and making sense of what you see is trivial for a human but extremely difficult to program.)

Advances in computerization in the coming years will hollow out the occupational distribution even more, leaving a smaller and smaller percentage of the U.S. labor force employed in manufacturing and clerical jobs. Workers with the skills to do the growing number of managerial, technical, and sales jobs will prosper. Those without the requisite skills will be forced to compete for service jobs, the number of which is growing, but which do not pay well because almost all workers can do these jobs.

The authors acknowledge that IT isn't the only factor in this development, albeit an important one. I, for one, see strong parallels to Richard Florida's work (more on that in a different post, though).

The first two of Levy and Murnane's categories clearly speak to my interest in innovation. You could say that, because of IT, innovative work has become even more important (our competitive advantage over computers so-to-speak), but also, it has become easier to distribute this work across large distances. Reversing the authors' take on outsourcing, you might wonder whether innovative work itself has become more routine, even rules-based.

I have heard this speculation before. After all, how could you develop a new chip with teams working together in 3 time zones if there isn't a significant amount of standardization/regulation in the process? This is certainly one aspect on which I hope to find some more input in my own work.