Sunday, 12 April 2009

The rise of the micro-company

I've been reading Tim Ferris' The 4-hour Work Week recently and he identifies that one of the key enablers of the new work is the increasing ability to successfully outsource functions that previously would have had to have been performed in-house.

The theory of the firm supports the existence of large organisations that reduce costs by performing tasks in-house. Thus it becomes cheaper to hire a web designer and pay a full time salary than hiring one only when needed for specific projects.

Decreasing costs of communication and collaboration have flipped this on its head. Sites like Elance mean that professionals can be hired on a project-by-project basis.

There has been tremendous growth in freelance work over the past generation, and in some industries freelance work is becoming so dominant that it is considered bad advice to get a job.

However, there will also be the emergence of 'micro-companies', that are able to serve huge markets with tiny numbers of full time staff. Think Craigslist, with just 23 staff.
37signals called this market the Fortune 5 million.

It's not just internet companies. As Tim Ferris showed in running BrainQuicken, with a virtual assistant and an loose network of support service providers and online affiliate resellers, individuals are able to operate companies that support order books far larger than traditional companies, which require staff to make sales from physical stores.

With the rise of software as a service and online human marketplaces such as Amazon's Mechanical Turk which allow individuals to scale their operations as needed, this could soon become the 'Fortune 1 billion'

Monday, 6 April 2009

The future of work

I would like to take a break from education to look at what comes after education - the world of work, and how technology is likely to disrupt the traditional (in the mass-industrial era) patterns of employment.

The industrial notion of a stable job in a large corporate, with its clear hierarchy and defined experience, is being replaced by an ever shifting landscape of nomadic individuals combining in flexible and fluid organisations.

There are a number of key forces acting on society's current economic reorganisation, including
  • decreasing costs of organisation
  • declining capital costs of tools of value creation
  • rise of the creator economy
  • expansion of education
  • extension of working life
I will try to look at these over the next few posts, and seek to identify how technology is shaping organisations - both from the social perspective of the individual (i.e. relationship with employer) and from the managerial perspective of the organisation (relationship with employee).