#02: Knowledge economy: The thriving wave in the labor marketplace

Image credit: Serge Maksimov

2020 has hit many of us in almost every aspect of our lives. From leveling the record-breaking unemployment last seen during the Great Depression, the loss of our loved ones, to paying $50,000 a year in tuition fees to attend the “Zoom class.”

Many countries worldwide that impose restrictions and lockdown have seen much economic activity stalled, employees laid-off, and the worst cases being the SMBs getting shut down. However, it has accelerated a shift towards upbringing the next wave of the labor economy’s upside.

Many of the early generation labor marketplace companies have reached unicorn and IPO status such as DoorDash and Grab, which run a pretty low-hanging fruit model, making them pretty easy to operate. Food delivery and rideshare are arguably the best models to begin with.

Numerous functions of these platforms were used in order to create a seamless end-to-end experience, such as aggregately matching supply and demand in seconds, short turnaround time including pay-per-trip, pay-per-session, and commoditized supply, which has low requirements to perform or deliver.

The low-hanging fruit opportunity captured in the gig economy has opened up a new layer of opportunity that is more complex to be offered using the previous model known as the knowledge economy.

While the former has been monopolized by widely known players such as Gojek and Uber, the latter has seen the need for standardization and labor pool identification, which helps the demand-side swiftly recognize what they are looking for. This allows them to concentrate their resources by filtering on the less readily definable “soft attributes” such as culture fit.

In particular, if an employer is looking for a UI/UX designer, it would be better to look into platforms like Behance or Dribble, as the model has centered around standardized attribution of specific skill sets and certifications that make the profile easier to be found.

Flockjay is another exciting example that tackles a hot-selling area with a less competing area of sales, a field that would need to navigate itself to sell the product or service to clients. The company has seen its graduates work in companies like Airtable, Gusto, Zoom, and Google.

Achieving success in this space comes with its own unique challenges. While the gig economy has a lesser barrier to obtain the supply, it’s not the case for this one. Any type of work where technology can incorporate detailed instruction on how to do that work through the tool will generate immense benefit by unlocking untapped supply.

Daily utility SaaS tools could fit well into this marketplace.

Figma is now a USD 2 billion company that thrives in a competitive design space predominated by large enterprises. Figma’s unique positioning as a “tool for design, not just designer” gives them a massive win against its competitors. So how is this enhanced to the greater supply of talents?

Kevin Kwok in his “Why Figma Wins”

It was hard for anyone other than designers to participate in the design process in the early days. Typically it would take layers of communication to get everyone on the same page. The management brings the product manager and the product manager to share it with the designers. Every change made will be directed to the management through the product manager, and the cycle keeps rotating.

Or in a “much easier way”, the designer will share the design file with the management. But it’ll still be challenging as it was hard to navigate through the file without the designer’s guidance. And for every update made, a new file needs to be shared again. This creates a negative experience as the feedback cycle was so inefficient that they need to hold back their work while waiting for feedback.

The simplicity of working with Figma has made it loved by its users. The adoption rate grows as they bring together this tool whenever they move to another job. Hence, it resulted in virality through words of mouth which then spread among their new co-workers.

As an individual, the ability to work on your task or project and publish it publicly can enhance your work’s credibility via the number of likes or duplicates you received. Power contributors could easily build-up thousands of likes, hundreds of clones, and tens of thousands of views. And this could help them in finding a new job too.

Another way to free up talent access is by having tech-driven training and guidance which is now more needed than ever.

The downturn this year and the dark recession clouds hovering over the world because of the disease outbreak have further opened the path for millennials, especially, to gain a new perspective and set different expectations when compared to the previous generation.

With an expected 400 million USD lost in Q2 2020, the pandemic has profoundly impacted the number of full-time jobs lost. Besides, the technology growth rate has outpaced the years preceding, while their capacities expand beyond collecting data at scale.

In fact, according to the World Economic Forum Future of Jobs Report 2020, it’ll take 5 years for machines to break even with humans regarding the amount of time to finish a task. Out of this, more than 80% of employers are expected to digitize the way of how processes have been done conventionally. This means across 15 industries and 26 countries, an estimated 85 million jobs will be dethroned.

Today, the buzzword “AI” has taken an enormous toll on our day-to-day job. While it’s true that it has disrupted the supply-side equation — taking Lyft as an example where they could find themselves replacing their drivers through the development of autonomous vehicles, the company also needs to take the first step of fully leveraging the pace of AI development to build an AI-ready workforce.

Creating an AI-ready workforce requires more than offering training courses through MOOC courses. The mobile, on-demand benefactor does no longer have an edge to thrive in today’s competitive internet economy. They need something that is geared towards collaborativeness and the ability to cross-skill in work related tasks.

In order to attain this idea, the employers need to provide encouragement where employees can apply their day-to-day learning into tangible skills that can grow the result, individually and company in general.

PwC has popularized this outlook of what is called a ‘citizen-led approach’.

In the previous years, companies still ran in a silo. This results from the department having their own KPIs and target to achieve by the end of the quarter. Consequently, it led to increased communication barriers across teams since there were no incentives to encourage collaboration.

The upshot is not only reducing productivity in the workplace but also wasting the potential each of the team members can bring to the table.

Hence, the idea of ‘citizen-led’ comes to place. Simply, the management ses the course and objectives and provides individuals with the training and resources to master and put in their knowledge to work. They later use it to adapt to the ever-evolving work which is then being transferred into new skills.

Unlocking latent supply at scale will come no easy especially during this time of crisis. There needs to be a proper process in order for democratization to happen. Founders and companies need to find ways to reduce the widening market gap that was resulted from the turmoil in the global economy.

Geeks of the Valley brings together thought leaders, entrepreneurs, and industry experts to dissect future trends. If you are an investor, founder or would like to work together, please reach out to geeks@geeksofthevalley.com or any of us here.

Written by Aizuddin and edited by Roshan.