How Is The Market For Global Talent Going To Change In The Next 5 Years?

This is an excerpt from a longer piece I wrote about three rapidly growing industries in the 2020s.

Let me just start by saying I am LONG the global market for skilled labor. If I had a personal north star, this is it. Developing human capital is the oil of the 21st century. Not data. Data is cool too, but figuring out how to educate a billion more people in a highly pragmatic way so they are able to do the work needed in the “information economy” is the greatest value unlock of the next 10 years.

I have spent a good amount of time in Ukraine over the past 6 years and have seen up close what a growing IT industry does to an economy and all of the peripheral new opportunities that emerge once people in an economic system start to have more money. Once a labor market reaches a critical “activation energy” it produces a few really important byproducts- role models, mentors, new career tracks, community groups (ie Kyiv product manager meetup), knowledge sharing, more demand for talent and specialized training programs. This makes continued growth organic and sustainable. Reaching this ‘activation energy’ is the key precursor to private investment.

There are a lot of factors that go into ‘activating’ a knowledge economy. Some of which I took for granted until I went to Rwanda and Kenya in 2019 so let’s start there. That trip taught me a lot about my blindspots. I attempted to start a coding bootcamp in Rwanda (unsuccessfully, but maybe I will try again in the future) and a few prerequisites for a successful information economy I had never considered became very apparent to me; cost effective internet, cost effective electricity and reliable devices (…I know). Without those three elements, you are basically fu$ked when it comes to participating in the global ‘information economy’. I hope that the innovation in clean energy can help solve the electricity part of this puzzle (ie that solar panel example I mentioned).

Between my experiences in Ukraine and Rwanda, I have thought a lot about the “lifecycle” of how any particular place goes from where it is today to reaching the ‘activation energy’ needed for sustainable private sector growth and participation in the ‘information economy’. In my view, the first part of the lifecycle requires government funding, smart policy and/or non-profit funding to get a large enough percentage of the population to the starting line for investors interested in developing a skilled workforce.

Here are some macro thoughts:

Part 1: Good primary education for poor kids is a prerequisite. This is not something that private investors are going to pay for (unless you want people betting on kindergartners and taking 20% of their lifetime earnings which is a dystopian hunger games future we probably don’t want). Without this step, the gap from where an apprentice or student starts their training to the time and cost it takes them to become a productive, specialized employee is too high for private investors to fund.

This is part of why Ukraine, Belarus, India, Russia, Brazil, Argentina, etc are booming ‘information economy’ labor markets but Rwanda, Kenya, Nigeria, etc much harder. The first set of countries I mentioned also already has all of the positive ‘byproducts’ for sustainable growth but none of that would have been possible without a strong foundation of good primary education for millions of kids.

Andela raised over $100M but that wasn’t enough. It requires billions of dollars in public investment to get a large enough portion of society primed for specialized training that can yield higher wage jobs. A cynical (but realistic) way of looking at this is that if a company wants to open an office for developers, they know in Ukraine they can find 100,000 software developers who will be competent or trainable, but in Rwanda today they might be able to find 200. So the shortage of economically viable, trainable labor supply is the primary problem to be solved. Until economies of scale for professional training programs can be achieved, an “information economy” is not going to “activate”. The profit incentives aren’t strong enough.

That being said, whoever can unlock the intellectual capital of Africa, Central America, Indonesia, etc has a huge market opportunity. There are a lot of smart people in all of these places who just need the right conditions and they will thrive.

You can dramatically reduce the amount of public or non profit funding required to make new populations of people ‘investable’ as future knowledge workers by getting computers and the internet into their hands at a young age. Online learning isn’t restricted to college courses and above. There is plenty of great content for younger kids. If you solve the challenges and cost barriers to getting reliable internet as I observed in Rwanda then large segments of the population will definitely be industrious enough to self-learn from there. Computers & the internet are the raw material for knowledge. Conventional wisdom in the US over values formal education and undervalues motivation for a better life plus the internet.

Part 2: Once you have a population with enough people who have prerequisite knowledge and infrastructure, then the market dynamics are aligned for private companies and education innovators to train hundreds of thousands of specialized workers. Platforms like Cousera, Udacity, Udemy, EdX, YouTube, etc are massively empowering and when combined with mentorship and real world opportunity, this will lead to an explosion of new global talent. These platforms have so much high quality learning content that if I am company that wants to train 500 people, I don’t need to invest in creating my own university or hiring a costly team of professors. Instead I can use these existing ‘pseudo-public common’’ education platforms and then focus on rich apprenticeship experiences. Scaling apprenticeship programs, real world work projects and verifying skill quality is a big business opportunity.

My mental model for the future global labor market is broken down into four areas:

1) Affordable and accessible infrastructure. Is satellite internet going to be the dawn of an education renaissance in Africa? Will inexpensive monitors & keyboards that can connect to AndroidOS so people who have an Android can do work that requires a PC without bearing a cost for a laptop they can’t afford? Will $100 computers get good enough for serious work? Affordable alternatives to commonly used software?

2) Closing the Culture Gap. Here is an example.

“How is the project going so far?”…”It’s ok”.

A person in Ukraine heard “Oh ok cool, everything is ok. All good.”

A person in the US heard “Oh man so we are doing a really bad job…everything is NOT ok.”

This is a much bigger hurdle than the accrual of technical knowledge. There is a very interesting book called The Culture Map that speaks to the communication differences between cultures around the world. I’d suggest reading it if you work with a global team. So much of the innovation, creativity and problem solving that happens in today’s workplace takes places between people, not inside of one person’s brain. Even if a team is all speaking to one another in English, they are not necessarily speaking the same language.

Part of this is going to naturally solve itself through social media because millions of young people are consuming the same content so culture itself is increasingly becoming borderless.

The other part of this problem will be solved through soft skills training courses and an investment in cultural and contextual education within organizations. 99% of problems I see within a cross cultural team in the software industry are rooted in communication failures, not technical shortcomings.

The communication gap is also why if we look at the pattern of jobs that have become global we see that sales, marketing and customer success, copywriting are the hardest to move to another culture but as the world continues to assimilate this is going to be next. To put it bluntly, EQ is harder to outsource than IQ.

As an American myself, I want to point out that I am not suggesting cost-effective alternatives to US workers are a better solution, but simply that the global competition that designers and developers face is coming for soft skill specializations too.

Programs like SV Academy (in the US) are interesting to me because they are amongst the first to be systematically approaching the issue of specialized soft skills training and I expect the same things will happen in other countries. This is an area of particular interest for me.

3) Inefficient labor markets in law & other professional services. I had to pay $300/hr to talk with one of the leading neurosurgeons for Deep Brain Stimulation surgeries in Canada. I can talk to him for as many hours as I want at $300/hr. If I want to get one hour of time from an associate at a corporate law firm it is going to cost me $400–600/hr. Why is the expertise of an experienced brain surgeon less expensive than a legal associate with little experience and knowledge that is not particularly complex? Because of regulatory barriers and higher education costs. Why can’t a very smart young person in India do the same work as an associate at DLA Piper? It’s not like you can’t download the US constitution or US legal textbooks in another country.

The point of this story is to illustrate the skill to value paradox that gets created by conventional wisdom, fear of the unknown and regulatory barriers which result in unnatural labor markets. It just doesn’t make sense to me that an inexperienced legal associate costs more than a specialized brain surgeon. This is a big inefficiency and my bet is that a lot more professions with regulatory barriers are going to see an onslaught of global competition as savvy entrepreneurs and education investors find regulatory workarounds and the right messaging to alleviate fears.

4) US higher education is fucked and for profit apprenticeship & education programs are going to continue growing in popularity. The formats and subject matters of these programs are going to expand well beyond the technology sphere. It just doesn’t make sense for many students to incur the debt required for a four year college degree. The economics don’t work. Somewhere along the line, the US higher education model has become a dick swinging contest of 1) endowment size (no pun intended), 2) US News and World Report ranking and 3) having as many administrators as possible while keeping the number of educators static. This is stupid and there are increasingly high quality alternative programs that are lower in cost, faster to complete and result in higher economic yield. It just occurred to me that I should be more specific about what I mean by “for profit apprenticeship & education programs”. I don’t mean criminal enterprises like University of Phoenix or other Private Equity owned ‘accredited universities” that they converted into predatory lending schemes…I mean companies like Udacity, Udemy, LambdaSchool, HackReactor, SVAcademy.

US higher education obviously has a place in the future, and some schools are showing initiative in the right direction — Georgia Tech, Arizona State, UPenn, University of Illinois & University of Michigan, for example, are leveraging platforms like Coursera to offer lower cost online degrees and certificate programs. I periodically go on Coursera and look at which Universities are offering degrees just to keep my finger on the pulse of the state of the migration to MOOC model or if I come across any interesting innovations or programs.

Lastly, I think undergraduate education and advanced research can be decoupled. Before the internet, streaming content, etc, if young people wanted to collaborate with or learn from an expert they would physically need to be in the same place. So if I wanted to learn chemistry from an expert, I would need to go to the same place he was doing research and hope he was willing (or was forced) to teach my course. But today, this isn’t necessary. Because of the fact that undergraduate training is no longer dependent on physical co-location with experts, Universities have lost their monopoly on higher education. We are in a transition period where University brand values are higher than their practical value to most students but it seems like this is starting to correct itself.

This section got longer than I had hoped for. It’s a domain I am passionate about. I believe deeply that there are millions and millions of talented people around the world and as innovators discover more and more efficient ways to make them productive workers (ie do this faster and more cost effectively), this will change the makeup of the global labor force at an increasing rate. If someone in Somalia can learn how to be a DevOps engineer on AWS, they will have plenty of time to read Catcher and the Rye & Socrates and get a liberal arts education if they so choose on Coursera for $300 rather than $200k.

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