The Future of Work

1. The Future of Work Globalization and the war for talent - how to attract, retain and motivate the workforce we need? The Knowledge Economy - what skills will we need and where will they come from? Demographic changes - where will we find our workforce & how will it be different from now? Technology - how will it affect how and where we work?

2. Europe – new member impact North America draws breath Japan zero’s-in elsewhere China wonders why everyone plays a ‘short’ game Asia gets drawn like a magnet Australia/NZ region observes with interest The State of Play…

3. Macroeconomic Trends • Worldwide and regional economic growth will continue to recover but slowly from 2001 levels • Growth will take until 2006 to reach traditional levels • There will be no double-dip recession • World stock markets will continue to rise slowly from the depths of fall 2002 but with heavy trading and spikes up and down Source: IDC, US OF Commerce

4. Macroeconomic Trends • Profit growth will continue to be mixed by industry and country though generally picking up in the United States and Japan • Profit reporting from multinationals will overstate real profit growth because of the falling dollar • In an age of IT complexity, growth will occur in markets that support simplification of technical environment • Hiring will remain slow, but positive into Q3 2005, though certain skills are in very high demand Source: IDC, US OF Commerce

5. Where are the people?Countries with >50m in 2004 Source: UN Population Division, 2000 Revision

6. Population Change to 2010 - millions 729 718 1299 1382 312 328 158 161 598 667 522 586 1374 1553 1132 1358 ‘01 ‘10 Source: World Bank (2001)

7. Populations Ages all over the World China Mexico Spain Italy 2050 2000 USA Japan India France 2050 2000 Source: US Census Bureau, population growth by age group and sex

8. 55 50 45 40 Average Age 35 30 25 Yr 2000 Yr 2020 Yr 2050 Years (Projections) Australia China Greece Italy Japan UK US Average population age –international comparisons

9. The 50+ are concentrated in Asia 2000 and 2010 (millions) 128 109 143 128 111 87 683 62 55 506 Dev Asia 105 77 141 105 2000 2010 Source: World Bank (2001)

10. Global Unemployment - overview Source: ILO, Global Employment Trends Model, 2003

11. Unemployment rates by region in 2003 Source: ILO, Global Employment Trends Model, 2003

12. Only Urban Population will Grow Millions 5000 4000 Urban 3000 Rural 2000 1000 0 2000 2010 2020 Source: UN Population Forecast, 2001 revision

13. CHINA RUSSIA EASTERN EUROPE Is becoming a key product-development center for General Electric, Intel, Philips, Microsoft, and other electronics giants. Strengths are hardware design and embedded software. Call centers for Japan and South Korea are growing in coastal cities. Some 100 local software service exporters employ up to 10,000 engineers specializing in complex projects. Boeing, Nortel, Motorola, and Intel have small R&D centers. Still has an enormous untapped pool of master’s and doctorates in sciences, IT, and math. Indian and American IT service providers are opening offices in Hungary, Poland, and the Czech Republic to tap abundant German and English-speaking workforce for European clients. Romania and Bulgaria are growing as IT workshops for German multinationals. PHILIPPINES More than 8,000 foreign companies source work in nine different IT parks with fiber-optic links. Strengths include huge supply of English-speaking, college-educated accountants, software writers, architects, telemarketers, and graphic artists. INDIA MEXICO SOUTH AFRICA COSTA RICA IT services, chip design, call centers, and business back-office work already generate $10 billion in exports and could hit $57 billion by 2008. Indian providers like Tata, Infosys, and Wipro already are global leaders, and U.S. IT service firms are piling in. Becoming a favorite IT and engineering outsourcing haven for U.S. companies that want to keep work close to home. As car and electronics companies move manufacturing over the border, they are boosting demand for engineers. Well-educated speakers ofFrench, English, and Germanfrom all over Africa staff growing call centers catering mainly to European companies.Deregulation of telecom could speed development. Other call centers are opening up inMauritius. Cheap telecom costs and educated workforce make San José a thriving spot for call centers targeting Spanish-speaking consumers inthe U.S. and Europe. Work is migrating from Industrialised Countries to all Continents… Source: Business Week, 3 Feb 03 Cover Story

14. Hourly Labour Costs in Manufacturing 2001 24.0 22.0 19.9 16.3 15.8 15.4 14.6 10.8 8.1 3.3 0.8 0.5 2004 29.1 19.0 21.6 20.1 19.5 18.8 17.2 13.8 9.9 5.2 1.0 0.6 West Germany Japan United States France UK East Germany Italy Spain Korea Czech Republic India China Source: Oxford Economic Forecasting

15. OK let’s get to the bottom of the debate(on off-shoring)… The Example of America… • Off-shoring is often confused with domestic outsourcing • In 2003/4 US companies invested 2.5 trillion in the US economy and only 280 billion abroad • The changing of sourcing channels has been going on for years as part of the normal maturation process of industry • Most US investments abroad are about “proximity economics” • US manufacturing is the most productive in the world, having transformed from vertically integrated production structures to highly fragmented ones

16. OK let’s get to the bottom of the debate(on off-shoring)… The Example of America… • Productivity increases are responsible for job losses – 25 years ago GM needed 454,000 workers to build 5 million cars and trucks – today it takes 118,000 • Worldwide sourcing accounts for only a small part of job losses – the bulk of “lost” jobs have gone to a country called “PRODUCTIVITY” • Since 1995 the US has lost 11% of its manufacturing jobs … and China 15% • And for service jobs – in 70% of cases sourcing is not a factor due to the face-to-face contact or specialization of the work

17. Occupations Skills Impact of Technology on Occupations & Skills • Growth in demand for scientists, engineers, technicians, computer specialists, biochemists, biologists, call centre operators etc. • Two scenarios: • Technology replacing humans, even in labour intensive industries like the service sector • Technology creating new types of occupations or transforming existing - presence managers, swarm spotters and creators, knowledge posters and linkers, workplace hosts • Managing information work in different domains • Managing just-in-time social interactions • Ability to catalyze swarms/smart mobs • Making public spaces personal and vice versa • Communicating presence in different settings and media • Managing attention … your own and others

18. Boundaries are blurring freedom variety of work flexibility of hours learning/experience temporary permanent security career development social interaction continuity of employment career path

19. temporary permanent freedom variety of work flexibility of hours learning/experience Security career development social interaction continuity of employment career path

20. Flexible workforces are not a luxury, they are mandatory

21. Asians in Asian Institutions Science And Engineering Ph.D. Degrees By 2010, if current trends continue, over 90% of all physical scientists and engineers in the world will be Asians working in Asia 18,000 16,000 14,000 All nationalities in U.S. Institutions 12,000 10,000 8,000 U.S. citizens in U.S. Institutions 6,000 4,000 Asians in U.S. Institutions 2,000 0 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

22. New regulations will have a major impact on« re-shaping » industries and the labour market • International Trade negotiations will open and close entire domains of global exchanges e.g. in agriculture and services • Domestic deregulations will generally expose yet protected workers e.g. privatization, opening sectors to competition • Regional and national subsidies will distort geographic allocation of resources • Terrorism, Epidemic fears, immigration issues will translate into regulations and disturb movement of people Examples:

23. New regulations will have a major impact on« re-shaping » industries and the labour market • Privacy laws will hinder flows of information and capabilities to offshore activities • Social and labour laws will protect some minorities,could harm others • Corporate and individual fiscal policies, especially linked to budget issues related to ageing and health costs, will distort competition across markets • Sustainable development will lead to new regulations, forcing some industries to move geographies Examples: