The Open Economy and its Enemies

Samsung has sponsored a document extolling the ‘Open Economy’. The message is that the digital revolution has so changed the world that ‘for businesses and governments to thrive … they will need to completely rethink the meaning of work in the 21st century and who does it.’ By 2020,  the ‘building blocks for a new economic model will be in place based on mobile working by a mobile workforce – for whose success various Samsung products will prove remarkably handy.

One key motor of this transformation will be the capacity to work remotely from a physical office in a way which is completely secure. Another will be the capacities of Artificial Intelligence, particularly as it may well bring together the heavy hitters in the digital village: ‘One major alliance, between Google, Facebook, Amazon, IBM and Microsoft, has been formed to develop AI and machine learning systems that can operate across any platform or operating system, while Samsung itself is investing substantially in AI technologies that will automate many daily tasks for handset users’

There will be employment consequences: ‘A new breed of ultra- flexible freelancers will prosper in the Open Economy. Their advent will present great opportunities for the organisations that embrace them, but the structure of work will change: “In the future’, says an expert,’ companies will shrink their numbers of salaried staff in a major way, becoming a core executive team who design high level strategy and integrate different elements of that strategy on a day-to-day basis.’ That core team will deploy the skills of teams of ‘radical freelancers,’ people who trade their talents with many different companies at the same time.

Automation will decimate careers in sectors such as administration, driving and low-skill manufacturing, where a machine can practically and affordably replicate the work involved. But whole new job categories will be created, predicts Samsung, around skills such as intuitive and strategic judgment, creativity and imagination. ‘“As machine intelligence improves, the value of human prediction skills will decrease because machine prediction will provide a cheaper and better substitute for human prediction, just as machines did for arithmetic,” Agrawal, Professor of Entrepreneurship at the Rotman School of Management, University of Toronto, tells the Harvard Business Review. “However, this does not spell doom for human jobs, as many experts suggest. That’s because the value of human judgment skills will increase. We’ll want more human judgment.”’

To this assessment, you can add the TED-style upbeat twist of Professor Agrawal or the more downbeat assessment that, for every winner there are likely to be rather more losers among those without the skills and capacities to survive in such an economically Darwinistic universe.

In the rush to the future, Samsung foresees a corporate coalescence: ‘the need to tackle research and development challenges that are too expensive for one company alone … will see businesses reviewing traditional ideas around competition. In their place, they will favour mutually beneficial collaborations with former sector rivals – collaborations that will inevitably need to take place across secure open platforms.’ This is a view not far off all those science fiction novels where the Earth has become one giant PLC.

The short message is ‘adapt or die’. By 2020, Samsung forecasts, the Open Economy will have arrived in force. By then, it fears that it will already be too late for unprepared organisations to keep pick up the pace.

All this is very bracing. But how does it stack up for legal services? You have to say that much of it is likely to apply at the top, commercial end. There is likely to be a hollowing out of the big law firms as machine learning and artificial intelligence take more of the weight. There already are – and have been for years – freelancers in fields like IT who sell their wares to a variety of employees.

The law will be subject to particular factors: for example, confidentiality rules are likely to restrict the number of freelancers with client contact who operate for a number of different firms. And, over the economy as a whole, there may well be concern at freelancers with rather too much contact with commercial rivals. More likely seems to be an Uberisation of the economy with well-paid, highly skilled freelancers tied to one employer by variants of the zero hours contracts that surrender future security for current income. Samsung’s notion of the collaborative – for which one might substitute the monopolistic – economy might not be quite as attractive as it presents.

There may also be more sectors of the economy and government than Samsung foresees which hold onto more traditional ways of working – for a variety of reasons. Legal services will provide its own examples. For instance, those delivering services to the poor may continue in much the same way as now – if only because of their restricted access to capital and low income together with the relative low access of their clientele to digital communication.

Samsung have done us a favour in drawing out the implications of change. But, we need to note two important elements which are under-considered. First, the impact of technology will be variable and it would be helpful to recognise that. In particular, we should look at – and foster – those which are still likely to require distinctly human engagement more widely than only within the business environment. And, yes, secondly, there are areas  where it will lead to massive job cuts – the law will not be exempt. Unless we start planning for these, our societies will become rapidly more unequal and unstable. It will take a strong state and civil society to channel for the common good the technological and economic tsunami that Samsung predicts. And that is the unspoken implication of much of the futurology emerging from the technological giants that will dominate the 2020s and beyond.

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