The Golden Age of Digital Technology
#WF27 What the five technology surges in the last 250 years tell us about the future, how Web3 fits into this account, and what this might mean for work.
👋 This is the 27th regular update from the Workforce Futurist Newsletter – which is read by those on a journey to make work better.
We are in a period of great technological and social change, but not for the first time.
What can we learn about the future from analysing past patterns?
According to Professor Carlota Perez, we are in the middle of the 5th technological surge going back 250 years. According to this theory, each surge goes through stages that have some common features, and we are on the verge of a Golden Age for Digital Technology.
In the Workforce Futurist spirit of trying to build preferable work futures, this article wonders whether we can find inspiration to help us create the conditions for a Golden Age for Work.
Is History a Mystery or Does it Rhyme every Time?
The past does not repeat itself, but it rhymes. Mark Twain
There is a natural tendency to seek answers to big questions in dusty history books and to search for patterns in the charts.
History provides us with some entertaining narratives told by the victors.
Economics provides us with black boxes overflowing with big data. Shake the box up with some QE, pandemics and wars, and lets revert in ten years time?
A popular account of historic technological cycles is the Fourth Industrial Revolution. Where I sit in the UK, the economy is predominately a service economy (71% of GDP), manufacturing (18%), and agricultural (less than 1%).
It’s not so much physical assets that create value here, but brands, data, software, trust, and customer relationships.
Can we find a rhyme from previous technological cycles that is worth singing about?
The Five Great Surges of Technology Development
Carlota Perez is a British-Venezuelan Honorary Professor, and in her words, a ‘neo-Schumpeterian all-purpose social scientist’.
Perez argues that we have had four complete technological surges in the last 250 years, and we are in the middle of the 5th technological surge - The Age of Information Technology and Telecommunications, which I refer to as the Digital Age in this article. This period started in the 1970s with the first widely available computers.
Each revolution is driven and associated with a surge in technological development.
The First Surge - The Industrial Revolution - 1771 - when Richard Arkwright’s water-powered factory ushered in machines, mills, and canals.
The Second Surge - The Age of Steam and Railways - 1829 – with the testing of the ‘Rocket’ steam engine for the Liverpool-Manchester railway. We start to see a universal postal service, telegraph, and, city gas.
The Third Surge - The Age of Steel, and Heavy Engineering - 1875 – an era of bridges, ships, and electrification. When Andrew Carnegie’s plant dedicated to the Bessemer process opened, halving the price of steel and facilitating the fourth surge.
The Fourth Surge Age of the Automobile, Oil, Plastics and Mass Production - 1908 – associated with the power of assembly lines producing Henry Ford’s Model T and roads, ports, and, airports.
The Fifth Surge - Age of Information Technology and Telecommunications - 1971 – giving us the Intel processor, global digital telecoms, the internet, email, and erm TikTok.
Each technology surge has similarities in terms of how it progresses and how society responds. (Here are more resources to fully explore this theory)
The first phase is when the technology comes into the market and the infrastructure is built. Some critical factor of production becomes very cheap. Examples include rails for the railroads, assembly lines for the cars, server, and network infrastructure for the internet.
The second deployment phase is when the technology is broadly adopted by society. Examples include the development of the western part of the US in the railroad era. The creation of suburbs, shopping malls, and fast food in the auto era, and the adoption of iPhones, Facebook, and ridesharing in the digital era.
With each transition to the next phase there are the associated battles of power and capital as different interest groups shift positions. There is a turning-point between these two phases. This is often marked by a financial crash and recovery characterised by recession, populism and unrest. At this point political parties are prone to meltdown and take on previously unimaginable new shapes, with boundaries between left and right getting blurred.
Does this sound familiar?
Then there is light at the end of the tunnel – a period of consolidation and widespread gains in productivity from using the new technology. This is called the Golden Age.
During the golden age of mass production, in the 1950s and early 1960s, the interests of business and society converged. With suburbanisation, working-class people in many Western countries could become homeowners and consumers.
Similar points in history cited include 1840s Britain, with Chartism and repealing of the Corn Laws, and the 1930s. Each Golden Age enabled a different lifestyle, for example:-
La Belle Époque in the 3rd wave - Renoir’s 1876 masterpiece in the main image, shows a Sunday afternoon scene in Paris, with people dancing, drinking, and eating galettes (flat cakes) into the evening…Ahh, la joie de vivre!
the sounds of the suburbs were enabled by cheap oil and cars in the 4th wave.
the internet has enabled billions of people to multi-task whilst streaming entertainment 24 hours a day, swipe-right, choose a vintage frock on eBay, bet on live sport, and share Wordles on Twitter. So far so good, but is there more to come?
Are We There Yet?
Despite some obvious gains we have yet to enter the Golden Digital Age, according to Perez’s description of phases, where the benefits of the technology are shared more universally.
There is a debate about whether the internet has delivered enough to be truly transformational. See for example, this account from Ben Thomson.
My view is that the promise of the internet has only been partly achieved.
The internet has brought much value to the 4 billion who can access it, however, it has also brought problems. These include data privacy, business models that concentrate power into a few central nodes, the extensive and inefficient use of intermediaries in many industries. In the last decade, we have had public pushback on the use of personal data
To move into the Golden phase of this Digital Age, and gain more universal benefits, the infrastructure and business models need to move on. I think we might be on the brink of a golden digital age which will take a decade or two to play out.
What Might the Golden Phase of the Digital Age Look Like?
I dislike the bland terminology and current faux debates of Web 2 vs Web 3. The terms are too blunt to be useful to describe a complex shift taking place over 50 years across multiple dimensions.
An important and valuable resource in our current digital age is data.
Some of the best investment returns over the last fifteen years have been in companies that have effectively monitised our personal data to sell us products or services. Including Apple, Microsoft, Google, Amazon, and Facebook.
For more universal benefits, we need to consider how we use our data.
We currently exchange our personal data too cheaply in exchange for useful internet services. For example, we allow Google to sell our personal data in exchange for search engines, or maps. As they say, “If you don’t pay for the product – you are the product.”
The next generation of technology needs to allow individuals to control their data better. They can then choose when and where to share this data when it benefits them. In theory, this can lead to a renaissance where intellectual property will be more easily verified, managed, and monitised. This lowers the barriers to entry to commercial activities that were traditionally owned by large centralised corporations.
An example might include a musician sharing equity in a song with the contributing team, and royalties being split according to digital smart contracts – changing the current model with publishers and distributors.
Tim O’Reilly was the person who defined ‘Web 2.0’ 17 years ago. He thinks it’s too early to get excited about Web3, and thinks we have seen it before, for example with open-source software. O’Reilly’s critique seems to focus on NFT speculation mania. However, I think the technology transition we are in is much broader than NFTs. The scope today might also include Self-Sovereign Identity (SSI), use of verifiable digital credentials, user-owned peer-to-peer platforms, Decentralised Autonomous Organisations (DAOs).
To understand the changes happening - ignore the spurious claims of the shillers. Focus on an industry you know and love, and consider how data is used in that industry.
To illustrate, I give a short snapshot of how the next generation of technology can help improve the way we manage and source work.
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How Might a New Golden Age of Technology Improve Work?
Each of the technological surges had a distinct impact on how we view and manage work.
Remote work didn’t start in 2020.
In Britain from the 1600s to the mid-19th century, work primarily took place in people’s houses, not in factories. Workers made dresses, shoes, and matchboxes in their kitchens or bedrooms. With bobbins and other inventions, economies of scale led to factories, unionisation, the formal job, the 5 day-week and command-and-control companies we still have today. We have come full-circle now with digital technology enabling more home-working.
A key feature of a golden age is an investment in infrastructure.
I have been campaigning for investment in a new infrastructure for work that fixes some of the ‘plumbing issues’. Of course, Labour vs Capital is a complex relationship influenced by global economics and the politics of institutions. I believe that for substantial change to happen, there is a technology angle to this.
One example, to illustrate an emerging transition, is how the staffing industry currently uses career data.
Labour Market Challenges. Labour markets can be characterised by inefficient work-matching. In practice we can’t find the best available graphic designer or coder very easily because we don’t have access to the databases that have the relevant data. We are willing to pay intermediaries, recruiters in this case, a decent fee to do this search for us. We willingly give our career data away for free on Linkedin, and Microsoft (who owns LinkedIn) then sells this data to recruiters and sales teams. Our career data is owned and monitised by a handful of digital landlords. So we can’t find the best coder unless we pay for access to these walled-gardens of data. One reason that the labour market is inefficient is that we have not organised our data.
You can download my paper (written in 2017) on this topic which gives a critique of the staffing industry, and some principles for building new blockchain infrastructure - download the PDF paper from here.
Emerging solutions. A future scenario is where we have individual digital career wallets which we use to control our employment credentials – kissing goodbye to the CV and resumes used since the 15th Century. These career wallets are interoperable across different work platforms. Employment-related credentials, for example, skills, courses, degrees, tenure, can be verified across trusted decentralised networks. This will mean workers control their career data, choosing where to offer services and interacting more directly with employers. This might allow more trustworthy work-matching platforms, facilitate less reliance on ‘the job’ and support alternative employment contracts. It’s not the whole picture of work-matching, but fixes some of the broken plumbing.
Any dystopian gut reaction to this scenario, such as relying on work-platforms and a ‘race-to-the bottom’, needs to be balanced with hope we can build in some counter-measures to improve financial security that is less tied to the job.
The narrative here is about individuals gaining more autonomy and equity, but the real story here is about networks of teams flourishing.
The Velocity Foundation is a non-profit foundation, and has built what it calls ‘the Internet of Careers’. It’s members represent more than a 1 billion workers. This will allow workers to move between employers using the interoperable career wallets I mentioned.
Another example of using blockchain technology is with the NHS in the UK. The COVID-19 Digital Staff Passport is used by 100 NHS Trusts to enable safe staff movements between organisations.
Is the Golden Age Inevitable?
The past does might not repeat itself but sometimes reappears like a terrifying nursery rhyme.
We need a positive vision for the future.
For those building solutions to today’s problems, it doesn’t really matter whether we are entering the golden phase of the fifth technological revolution, or are in the fourth industrial age. Keep on building!
Although I can make a positive case for a better future of work – the golden age is not inevitable. Perez offers a word of warning…
“… there is nothing automatic about golden ages happening each time, just as there is nothing deterministic about a technological revolution. Without a set of policies giving clear directionality to markets, the needed synergies for innovation and investment cannot materialise.”
A positive outcome depends on social pressure. With civil society, political movements and thought leaders play a defining role in the outcome. We need investment in infrastructure, a clear role for government and policy-makers.
This is a good time to get creative, agitate, and share your vision.
As Roy Amara said, the future is not predetermined, predictable or even imaginable.
At a time when we all need a positive vision, let’s try to build a preferable future of work in the next golden age.
Note on the image of ‘Bal du moulin de la Galette’ - this is an 1876 painting by French artist Pierre-Auguste Renoir. It is housed at the Musée d'Orsay in Paris and is one of Impressionism's most celebrated masterpieces. The painting depicts a typical Sunday afternoon at the original Moulin de la Galette in the district of Montmartre in Paris.