The World of Work
The drivers of corporate value have changed, transforming how companies do business and employees navigate their careers. Enter the interactive to explore the phenomena shaping this emerging era in the world of work.
Shifting Capital Investment
How US companies invest their capital (ratio to GDP)
0.140.120.100.080.060.04‘78‘80‘82‘84‘86‘88‘90‘92‘94‘96‘98‘00‘02‘04‘06‘08‘10TheinternetboomTangibleIntangibleThe 1996Telecommunications ActThe first overhaul of UStelecommunications law in over 60years. The act reduced regulationin order to encourage the rapiddevelopment and deploymentof advanced newtelecommunicationstechnologies likethe internet.1996The world wide webgoes publicAfter being invented in 1989 by TimBerners-Lee at CERN, peopleoutside of CERN begin to use thenewly created web. Realizing theinnovative potential of the web,CERN makes the code for the firstweb browser available, for freeand forever, in 1993.1991Completion of the FLAGcable systemKnown as “Fiber-Optic Link Aroundthe Globe,” this cable was theworld’s longest fiber-opticcommunications cable whenlaunched. It made connectivitya global phenomenon.1997 0.140.120.100.080.060.04‘78‘80‘82‘84‘86‘88‘90‘92‘94‘96‘98‘00‘02‘04‘06‘08‘10TheinternetboomTangibleIntangibleThe 1996Telecommunications ActThe first overhaul of UStelecommunications law in over 60years. The Act reduced regulationin order to encourage the rapiddevelopment and deploymentof advanced newtelecommunicationstechnologies likethe internet.1996The world wide webgoes publicAfter being invented in 1989 by TimBerners-Lee at CERN, peopleoutside of CERN begin to use thenewly created web. Realizing theinnovative potential of the web,CERN makes the code for the firstweb browser available, for freeand forever, in 1993.1991Completion of the FLAGcable systemKnown as “Fiber-Optic Link Aroundthe Globe,” this cable was theworld’s longest fiber-opticcommunications cable whenlaunched. It made connectivitya global phenomenon.1997
Data: Corrado and Hulten, "Internationalization of Intangibles," 2013
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Up through the 1970s, tangible assets like land, industrial plants, and physical equipment made up the majority of corporate value—over 80% by some estimates. Thanks to 30 years of rapid globalization, deregulation, and technological change, enterprise investment in intangible assets has overtaken investment in tangible assets.
Intangible assets—things like human capital, data assets, software, intellectual property, and brand equity, among others—now drive corporate value. But like any other asset, intangibles must be properly utilized in order to produce value.
Companies are turning to forward-looking executives, including the CFO, to find the advanced technological solutions that will help them harness the full capabilities of the resources at their disposal.
The Rise of Data
The dramatic rise of data creation and replication
011,25022,50033,75045,000exabytes2005201020152020Just one year after therelease of the iPhone, thenumber of devices connectedto the internet exceeds theworld’s population.2008A gigabyte of storage costs$1.24, and 900,000 minutesof media are available forconsumption per US home.By comparison, 50,000minutes were availableto the average homein 1960.2005IBM’s Watson scans andanalyzes 4 terabytes of data,defeating two humancompetitors onJeopardy!2011A gigabyte of storage costs$0.03. Forty-seven percentof organizations surveyedreport planning to movetheir ERP systems tothe cloud withinfive years.2014 011,25022,50033,75045,000 Exabytes2005201020152020Just one year after therelease of the iPhone, thenumber of devices connectedto the internet exceeds theworld’s population.2008A gigabyte of storage costs$1.24, and 900,000 minutesof media are available forconsumption per US home.By comparison, 50,000minutes were availableto the average homein 1960.2005IBM’s Watson scans andanalyzes 4 terabytes of data,defeating two humancompetitors onJeopardy!2011A gigabyte of storage costs$0.03. Forty-seven percentof organizations surveyedreport planning to movetheir ERP systems tothe cloud withinfive years.2014
Data: IDC Digital Universe (2007-2014)
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For the last 30 years, advancements in storage technologies, media formats, and connectivity have driven data creation upwards, inundating modern businesses with ever-increasing troves of intangible data assets. Today, data exists in huge volumes and varieties, and is being created at record speed. In 2014, each person on Earth produced an average of 1.7 megabytes of data per minute.
Companies hold responsibility for 85% of data in existence, and in theory, this material offers companies the opportunity to answer questions they didn’t even know to ask. But while hype intensifies, management of data is still in the nascent stages of growth. Only 3% of new digital data is tagged, and only 0.5% has been analyzed.
In order to derive value from these assets, businesses are adopting advanced tools—such as cloud-based ERP systems—that will help them quickly parse out relevant information and make connections across the enterprise.
The Talent Economy
Job openings are on the rise
2,0003,0004,0005,0006,000million‘05‘06‘07‘08‘09‘10‘11‘12‘13‘14‘15 2,0003,0004,0005,0006,000million‘05‘06‘07‘08‘09‘10‘11‘12‘13‘14‘15
Data: Bureau of Labor Statistics
Employees are regaining the confidence to quit
1.401.852.402.753.20million‘05‘06‘07‘08‘09‘10‘11‘12‘13‘14‘15LayoffsVoluntary quitsBy the end of 2008, 2.6million Americans lose theirjobs—the highest annual jobloss since 1945.2008The markets start to regainconfidence as the secondround of quantitative easingtakes effect. Layoffs begin tostabilize and laborers regainthe confidence to seekother opportunities.2010 1.401.852.402.753.20million‘05‘06‘07‘08‘09‘10‘11‘12‘13‘14‘15LayoffsVoluntary quits2010The markets start to regainconfidence as the secondround of quantitative easingtakes effect. Layoffs begin tostabilize and laborers regainthe confidence to seekother opportunities.2008By the end of 2008, 2.6million Americans lose theirjobs—the highest annual jobloss since 1945.
Data: Bureau of Labor Statistics
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In 2010, the last year of the Great Recession, new job openings plummeted and unemployment rose to 9.8%. While economic conditions stunted corporate growth, the downturn left employers favorably positioned to retain skilled talent—a key intangible asset.
Since then however, new job openings have nearly doubled, and unemployment has dropped to 5%. There are now 1.7 job seekers for every opening, and the talent market has shifted in favor of skilled workers.
Changing Times, Changing Employees?
Everyone changes jobs for essentially the same reasons
GEN YGEN XBOOMERS42%47%42%ENTER THEFAST LANE24%19%28%SHOOT FORTHE TOP21%24%16%FOLLOWMY HEART13%11%14%SAVE THEWORLDENTER THE FAST LANEFor every generation, making more money, ideally in a more creative and innovative environment, toppedemployees’ reasons for seeking a new position. GEN YGEN XBOOMERSENTER THE FAST LANE42%47%42%SHOOT FOR THE TOP24%19%28%FOLLOW MY HEART21%24%16%SAVE THE WORLD13%11%14%ENTER THE FAST LANEFor every generation, making more money, ideally in a more creative andinnovative environment, topped employees’ reasons for seeking a new position.
Source: IMB institute for Business Value Millennial Survey 2014
Millennials n=1,153, Gen X n=353, Baby Boomers n=278.
Q26: Why would you leave your current job for a job with a different organization?
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At 55 million workers, millennials now make up the largest generational segment of the US workforce. Prevailing sentiment has long assumed that an atypical and insatiable need for impact, purpose, and flexibility defines this demographic, and by extension, the major career choices its members choose to pursue.
However, closer inspection of the underlying values of millennials and their predecessors demonstrates a surprising finding: across generations, everyone switches jobs for essentially the same reasons and in similar proportions.
But while everyone may want the same thing, there are many means to an end. The world of work is undeniably changing, and technological change, rather than generational factors, is largely responsible.
Goodbye, Nine-to-Five
Investment in the on-demand economy is skyrocketing
0200400600$800million20112012201320142015On-demand mobile service funding (millions) 0200400600$800million20112012201320142015On-demand mobile service funding (millions)
Source: CB Insights
The contingent workforce is diverseclick to exploreINDEPENDENTCONTRACTORS21 millionMOONLIGHTERS14 millionDIVERSIFIEDWORKERS9 millionTEMPORARYWORKERS6 millionFREELANCEBUSINESSOWNERS3 millionThese individualsdo not have an employer.Instead, independentcontractors take on work ina variety of forms, on aproject-by-projectbasis.They make up 40% of thecontingentworkforce.These individualsare professionals with aprimary, traditional jobwho also take on additionalfreelance work on the side.They make up 27% of thecontingent workforce.These individualsearn income from multiplesources; often their incomestreams mix both traditionaland freelance work.They make up 18% of thecontingent workforce.These individualshave a single employer,client, job, or contractproject where theiremployment status istemporary. They make up10% of the contingentworkforce.These individualshave a single employer,client, job, or contractproject where theiremployment status istemporary. They make up10% of the contingentworkforce. The contingent workforce is diverseclick the circles to exploreINDEPENDENTCONTRACTORS21 millionMOONLIGHTERS14 millionDIVERSIFIEDWORKERS9 millionTEMPORARYWORKERS6 millionFREELANCEBUSINESSOWNERS3 millionThese individualsdo not have an employer.Instead, independentcontractors take on work ina variety of forms, on aproject-by-projectbasis.They make up 40% of thecontingentworkforce.These individualsare professionals with aprimary, traditional jobwho also take on additionalfreelance work on the side.They make up 27% of thecontingent workforce.These individualsearn income from multiplesources; often their incomestreams mix both traditionaland freelance work.They make up 18% of thecontingent workforce.These individualshave a single employer,client, job, or contractproject where theiremployment status istemporary. They make up10% of the contingentworkforce.These individualshave a single employer,client, job, or contractproject where theiremployment status istemporary. They make up10% of the contingentworkforce.
Source: The State of Freelancing in America, 2015 Report
Mobile technologies and advances in connectivity have given rise to a new breed of companies that seek to quickly match employers and individuals with the labor, skills, and services they need at a moment’s notice.
Dubbed the “Industrial revolution of our time,” this on-demand economy is turning away from the nine-to-five job in favor of flexible, short-term gigs. Employers and the labor force alike have taken the on-demand economy in stride. In the last five years, the number of independent workers in the US has risen 12%.
For these individuals, contingent work offers the opportunity to advance their careers, build flexibility into their schedules, and follow their passions. Employers, on the other hand, see a remedy to a growing skills gap in an era where human capital is critical, but in short supply.