The future of work is an interesting term, used all too often to invoke visions of robots and automation taking over the workplace. The reality is that the future of work is much more than machines replacing humans.
The future of work, at least in the foreseeable future, is way more about how we work, and how technology is influencing how we work together. Our modern economy currently, and will always to a large extent, run on knowledge.
In the past, this meant something completely different than it does today. Knowledge lived in pieces of paper, trapped in physical files. Today, knowledge lives in the cloud as digital content, information, and data stored across repositories and applications.
While automation, machine learning, and AI help us and our companies make sense of a lot of this data, knowledge workers, or individuals with a high level of education and experience who use and apply knowledge in a creative and innovative way, are still required to make the most of everything.
In fact, knowledge workers continue to be the most prolific area of job growth in the modern economy. In 2012, McKinsey & Company estimated there are 230 million knowledge workers in the world. The Wall Street Journal states “knowledge work occupations have been adding more jobs than any other since the 1980s — about 1.9 million per year. The other categories are growing too, but only by about 100,000 to 250,000 per year.” The Wall Street Journal also states that when looking through the past thirty years, the number of jobs for knowledge workers has never been rising as quickly as it currently.
With that being said, let's take a broad look at the future of work, and most notably the future of how we work, the technology shaping our productivity, and the market and demographics trends we're all experiencing.
This guide will be broken up into the following pieces:
- The Markets At Large
- Top Future of Work Startups
- Shifting Demographics
- Workplace Consumerization
- Job Evolution
- The Gig Economy
The Markets At Large
First, we need to define the technology markets at play. What markets have the biggest impact on knowledge workers everyday activity, and ultimately their organizations at large?
The markets we are going to look at are Enterprise Collaboration, Next-Generation Data Storage, Document Management Systems, Enterprise Content Management Systems, and Enterprise Collaboration Systems. While you can argue for additional markets, or that some of these contain companies outside of the future of work - they all play a integral part in a knowledge workers ability to perform their roles.
The Next-Generation Data Storage Market is expected to reach 144.76 Billion USD by 2022, the growth of which is mainly driven by the increasing volume of digital data, the proliferation of mobile devices (smartphones, laptops, and tablets) and the growth of new markets like IOT.
The Document Management Systems Market is expected to grow to 6.78 Billion USD by 2023. Separately, the Enterprise Content Management Market is expected to grow to USD 67.14 Billion by 2022, with the largest contributor being the exponential growth of digital assets a company creates and uses.
Finally, we consider The Enterprise Collaboration Market, currently valued at USD 31.25 billion and expected to register a CAGR (compound annual growth rate) of over 10.62% over the next 5 years. When combined, we’re looking at ~ USD 300 billion in market size.
Future of Work Top 50
According to Deloitte, the future of work is being shaped by two powerful forces: “The growing adoption of artificial intelligence in the workplace, and the expansion of the workforce to include both on- and off-balance-sheet talent.”
With that being said, there are number related areas defining the future of work. We used Crunchbase Pro’s search feature to compile a list based on specific categories. The categories we used to define the “future of work” included collaboration, collaborative consumption, document management, document preparation, productivity tools, real-time, product management, database, file sharing, content, freelance, peer to peer, outsourcing, content creators, and virtual workforce.
We then excluded all companies marked as closed and searched for founded after 1/1/2013. The way the list is sorted is by “CB Rank”. Crunchbase defines CB Rank as follows:
The Crunchbase Rank algorithm takes many signals into account including the number of connections a profile has, the level of community engagement, funding events, news articles, and acquisitions.
A company’s Rank is fluid and subject to rising and decaying over time with time-sensitive events. Events such as product launches, funding events, leadership changes, and news affect a company’s Crunchbase Rank.
We removed the startups that clearly aren’t related to the future of work, and here we are — the top 50 future of work startups around the globe.
Not only are the numbers of knowledge workers increasing, but their demographics are shifting dramatically. Millennials will make up 75% of employee demographics by 2025, and with 70 million baby boomers set to retire over the next 20 years, the demographics of knowledge workers will undergo a dramatic cultural shift, re-imagining the way workers learn, work, and collaborate.
In the past, employees were driven by external lifestyle motivators such as salary, benefits, and location. The modern knowledge worker is more interested in workplace flexibility, technology, social impact, collaboration and a desire for continuous development. Learning matters more than ever to knowledge workers, with 65% of employees identifying career opportunities and training as their most important motivators.
As knowledge workers become learning workers, they will also become way more technologically advanced. Workers will have increasingly high expectations for how their role, team and tech stack function together, thus reducing their patience for inefficiencies in the workplace.
A 2016 Ericsson Mobility study found a single website loading delay lead to a 38% increase in heart rate, roughly equivalent to how someone would feel watching a horror movie. Millennials have the desire for instant gratification, and this carries over to the workplace as well.
This is also the case with communication. For example, workers 18–44 years old prefer team messaging like Slack (43 percent), and find it the least disruptive work activity while workers 45+ years old not only prefer email but also find communication apps the third most disruptive work activity after unscheduled meetings and phone calls.
The modern knowledge worker will value experience, teamwork, and collaboration while bringing a more adept view on tech in the workplace. This will also lead to much higher expectations on the tech they use to enable them to work faster and more efficiently while breaking down company silos by enabling flatter and more collaborative team structures.
The Consumerization of The Workplace
There are countless reasons why we use technology in all aspects of our lives. We have a problem we need to solve, information to find, a task that needs to be completed, a friend to communicate with, content to consume, or any other number of other activities that are enabled or augmented by the tech we use.
More than ever our willingness to embrace technology throughout our day to day lives, combined with our increasing technology literacy and resourcefulness, is contributing to a major shift in the way work is conducted.
Years ago, we were told where we work, when we work, and what we use to get our work done. The technology was decided upon and implemented by upper management, with expectations, best practices and requirements being communicated down through the chain of command from the top.
However, things are currently much different and will continue to evolve over the next ten years, leading to a massive shift in the software we adopt in the workplace. Consumer technology is completely remaking the workplace, reimagining the ways we architect, adopt, implement and use technology.
Consumer applications like Twitter, Skype, Facebook, and countless others have been readily adopted by the workforce. Since we use these applications so consistently, we have become incredibly comfortable in the way they operate and what we are able to accomplish with them. At the same time, the feature sets of many consumer platforms have become increasingly robust and adaptable to the point where their workforce adoption seems unavoidable.
A recent IDC report states 15 percent of workers reported using consumer applications rather than the corporate sponsored tools to get work done. Bertrand Duperrin, Head of Employee and Client Experience at Emakina, describes this phenomenon in more detail when he explains “If, for a given use case, the enterprise solution is more complex than the consumer one, the employee will use the second. Even if prohibited.” It is inevitable that these applications will continue to enter the world of business and they are having a profound impact in a number of ways.
The B2B Stack Is Adapting
The enterprise software stack is being forced to evolve. Legacy vendors are competing with fast-growing and agile newcomers that are building their solutions from the ground up with a focus on mirroring the usability and familiarity of consumer applications. They're making sure their platforms are integrated, accessible, and more easily adoptable by the masses and are laser-focused on growing their user bases before attacking enterprise wide contracts.
The Way We Design Software Is Changing
The end user‘s experience has become paramount, where in the past the number of features and capabilities were king. It doesn’t matter if you are implementing a POS, CRM, CMS, or communication tool — how the tech compares to its closest consumer equivalence will affect how it is perceived and adopted.
Lower costs to design software, better understanding of workflows and technology, and better development tools have resulted in the more and more niche products designed to do one or two things, and do them well. With simplicity in mind these applications are more closely resembling their consumer focused counterparts. Think how software like Adobe Spark and Canva seem to more closely resemble Instagram than Photoshop.
How We Build Teams Is Different
When building a team, factoring in the use of devices and software outside of company-sponsored technology is now a necessity. As we build more agile teams, utilizing freelancers, consultants, and agencies this only becomes more prevalent.
Enterprise Applications Have Been Slow To Adapt
The failure of enterprise software to maintain ease of use while building out their feature sets has created market opportunities for newcomers. Smaller companies are more than willing to consider the adoption of consumer tools as there are already familiar and in use — and typically have much lower costs associated with their adoption.
While focus has been on the destruction of jobs in the future by technologies like AI, robotics, and automation, the technology is largely here already. While these jobs are adapting, the reality is knowledge workers now have more information and better tools to do their jobs faster and more efficiently. This idea is supported by a recent Forbes Insights survey, which found that most executives agree that AI is already driving transformative improvement in workflows and tools for knowledge workers.
Although automation will play a role in the future workforce, the future will hinge more on experts who wield smart technologies, with 78% of recent survey respondents citing that smart technologies will most significantly change the workplace by 2020.
According to the Bureau of Labor and Statistics the need for advanced IT and programming skills will continue to grow. There will be 1.4 million open computing jobs by 2020 but only 400,000 computer-science graduates with the skills to fill them.
Out of more than 150 such experts drawn from a larger global survey on AI in the enterprise, almost 60% say their old job descriptions are adapting in light of their new collaborations with AI.
Not only have jobs already been changing there are a ton of new types of roles being created. The World Economic Forum found that sixty-five percent of children now entering primary school will hold jobs that currently don’t exist.
In fact, technologies like AI are creating a significant number of new roles. In 2018, AI created 3x as many jobs as it displaced according to TechRepublic. The World Economic Forum report titled “The Future of Jobs 2018” found that artificial intelligence is expected to create 58 million new jobs by 2022. While 75 million jobs will be displaced by AI, 133 million new roles will be created.
These numbers are astounding. We're already seeing the effects of AI on the workforce, and they're actually positive. Jobs are growing, and it is because of technology, not in spite of it. While jobs may look different in the future, they will definitely be there.
The Gig Economy
The rise of the distributed team and the freelance workforce is undeniable in its size and momentum.
The freelance economy is growing at an extraordinary pace, with 56.7 million Americans doing freelance work today — up by 3.7 million since 2014, according to a new study of 6,001 workers commissioned by the giant freelance platform Upwork and the Freelancers Union. That represents one-third of American workers.
It’s important to note that this is a good thing. Working with freelance teams can dramatically increase a company’s productivity while saving money. It allows companies to take advantage of talent all over the world and take advantage of having workers across different time zones. It’s unlocking valuable and productive niches within the workforce — for example, the fact that nearly a third of people over 50 freelanced in the past year.
And while some previously thought freelancers were being forced into part-time roles, the opposite is true — With most freelancers choosing their career path. From Upwork's 2018 Freelancing in America Report"
- 62% of freelancers started freelancing by choice as opposed to necessity
- 76% of freelancers are happier freelancing than they felt while working traditional jobs.
In the past, we assumed freelancers were forced into part-time gigs due to layoffs or struggling to find full-time work. The opposite is true, and the choice to become a freelancer will only increase as the market opportunities increase. And freelancers feel like their opportunities are only growing:
- 92% of freelancers expect their work opportunities to continue to increase.
- 90% have a positive outlook in terms of how they work both now and in the future.
- 72% of freelancers say they either have the amount of work that they want or more.
Freelancers are also enjoying their work due to the monetary benefit of being their own boss:
- Two-thirds of freelancers say they earn more than they did at their job with a traditional employer.
- Of those earning a greater income as a freelancer, 81% say it took them less than a year to earn this level of income.
- 82% of freelancers say in the past year they’ve earned as much or more compared with others doing similar work.
Not only is the freelance economy growing, but the wallets of freelancers are growing as well. More money combined the freedoms of being your own boss must make for some happy workers, right?
- 84% of full-time freelancers say their work lets them live the lifestyle they want, compared to 63% of full-time traditional workers.
- 54% say there is no amount of money where they would definitely take a traditional job.
- Among full-time freelancers, 64% said their health has improved since they began freelancing.
These freelance opportunities also allow entrepreneurial-minded people to diversify their income streams while being afforded the flexibility to work how and where they want. Not only does the growth of the gig economy benefit freelance workers, but freelance marketplaces can be an invaluable source of help for startup founders (and larger companies) on a budget. When you are a small team working on big projects with short windows of opportunity, being as efficient as possible matters.
The Challenges In The Future Of Work
There are a number of challenges facing the future of work and our digital workspace - our home to our content creation, document storage and management, communication, scheduling, collaboration, and dozens of other activities that comprise the average work day.
Too Many Apps
The number of applications an enterprise uses is much larger than you would typically think. The Economic Times found that the average enterprise now uses over 900 cloud applications to manage its processes, and that number is continuously increasing. One further finding from their survey was that 59% of workers say the number of tools they use to work has increased in the past year.
While clearly not all workers use every app, the amount of applications we use sucks up valuable time for workers. RingCentral found that Sixty-eight percent of workers toggle between apps up to 10 times an hour, and 31 percent of workers said toggling causes them to lose their train of thought, making work more cumbersome.
Switching applications can waste an alarming amount of time. RingCentral also found that 69% of workers waste up to 60 minutes a day navigating between apps. That means workers lose up to 32 days a year navigating between the very apps meant for workplace productivity, costing hundreds of billions of dollars for businesses annually.
The Fragmentation Problem
Dropbox acknowledges the problem in its S-1 Filing, writing “The tools people use are fragmented. Content created at work tends to follow a predictable pattern: It’s authored, sent out for feedback, and shared or published once it’s done. At the same time, teams are organizing that content and coordinating tasks around it. But many of the tools people use today don’t work well together and support only one or two steps of the content lifecycle. This requires users to constantly switch between these tools and makes it even harder to get work done.”
This fragmentation is the main reason for massive content silos. According to a 2016 IDC report, more than half of companies ranging from 100 to 5,000+ employees use at least three repositories for accessing documents on a weekly basis. Difficulty in finding the right information amongst these content silos creates employee stress — this 2015 survey by Wrike found the number one source of stress in the workplace is waiting to receive information or not being able to find the content they need to do their job.
This fragmentation leads to a serious loss in revenues. The IDC states that Fortune 500 companies lose around $12 billion per year as a result of the “Knowledge Deficit”, or intellectual rework, substandard performance, and inability to find knowledge resources.
This taxonomy of the enterprise application stack shows that there are fifteen basic types of application software and under that, a total of around 50 subtypes. Within each subtype, there are multiple applications actually being used, whether they are company mandated or not.
Not only is there a massive amount of applications to handle the work of the modern enterprise, but many of these applications also need to communicate with each other as they’re used in various parts of the same piece of content’s lifecycle. Beyond the content and information created, these applications need to integrate with each other because of the way teams communicate and manage projects towards completion.
For example, picture a creative team taking insights from the business intelligence, strategy, and knowledge management teams to create collateral for the marketing team. This collateral gets stored somewhere, shared, and eventually gets communicated to the sales and business development teams. As products change this content is updated, communicated to teams, and the cycle starts over again. While this is occurring secondary tasks are completed and managed through project management and collaboration software.
Lack of Interoperability
People love the tools they use, and typically want to stay with what they know and are familiar with. For many companies, the days of management declaring what software products will be used, and only those products, are gone. However, the problem goes beyond the sheer number of applications being deployed.
Bertrand Duperrin also believes the problem might not solely be the number of applications, “but the functional overlap and lack of interoperability capabilities.” As Drew Hendricks of Inc.com writes, the lack of interoperability “eventually isolates information from other processes…Fragmented systems lead to duplicate information and repetitive entries as employees working with different data sets attempt to collaborate.” This lack of interoperability is a massive contributor to the content silos and knowledge deficit plaguing workers today.
Stowe Boyd furthers this sentiment when he said “We got past the interoperability issue with email. We just haven’t done it with other solutions. I think potentially there will be some subset sharing of the APIs. I have 27 apps on my iPhone. It doesn’t bother me that Twitter is a different app from Flipboard. That’s what people are doing in the workplace. They don’t want one solution like a giant Swiss Army knife with 120 different blades on it.” This leads us to the next factor in application fragmentation.
Central Hubs Add to the Problem
Box acknowledges the interoperability problem and is trying to solve it with Activity Stream, a way to view the condensed activity from their more than 1400 integrations. This is a common theme amongst competitors in the cloud storage, communication, and collaboration space. Turn your product into a hub that everything else connects to. Unfortunately, when everyone adopts this approach you end up with dozens of these poorly fitting Swiss Army knives. Adding to the problem, these hubs only give you a view of what is going on as opposed to being integral to the creation and usage of the content or processes in completing a project.
Bertrand echoes this sentiment went he talks about the “monolithic and hyper-centralized environment” that theoretically meets every need but ends up failing in practice. Bertrand understands that this approach made sense in theory, as “it was the best approach from a rational standpoint” but concludes “the vision of an intranet as a single entry point that aggregates every communication, collaboration, and business solution and creates bridges between them does not work”. He clarified these central hubs mostly failed from an adoption standpoint.
The reason the “hub software” often fails is the fact that most of the time the implementation of these hubs ends up creating more complexity, more steps to achieve employees' goals and more software to learn and manage. The integrations often aren’t polished enough and typically lead to employees switching back to the original software used to create the content in the first place. This leads us to the next contributing factor, the consumerization of software in the workplace.
The Proliferation Of BYOD And BYOA
According to Tech Pro Research, 59% of organizations allow employees to use their own devices for work purposes and another 13% plan to allow employees to use their own devices within the year. Even more interestingly, Syntonic found that 87% of companies rely on their employees using personal devices to access business apps. The proliferation of BYOD has led to BYOA or “Bring Your Own application”. As mentioned above, workers are choosing to use the apps they already have on their devices and are familiar with to get the job done. As BYOD increases, BYOA will as well.
A huge contributor to BYOD and BYOA is the fact that team structures are changing. The workplace continues to evolve into the digital space as teams become more fluid and distributed. According to Gallup’s State of the American Workplace report, 43% of Americans said they spent at least some time working remotely. In 2016, nearly 53 million Americans were freelancers, which equals about 34% of the workforce and that trend will continue to grow with projections that 43% of the U.S. workforce will be freelancers in some capacity.
In a survey of 1,000 hiring managers, 55% agree that remote work among full-time employees is more common now, and say they expect up to 38% of their full-time workers will be working remotely in the next decade. The fragmentation of teams is leading to a fragmentation of software being used. As team members bring their own devices, the number of applications used for any given project will increase as well.
When looking into current trends, it is easy to come to a conclusion that the future fo work will be one that looks very different than how we work today. Freelancers, distributed teams, and the proliferation of BYOD have led to agile workers completing their work from a variety of devices and software suites. As this becomes increasingly standard, we’ll see a few different shifts in the way technology is built, adopted and used throughout the enterprise. Software and content will become interoperable. More apps will communicate directly with each other without going through centralized hubs, and the consumerization of software will enable lean and integrated vertical applications to thrive and will push the enterprise stack to look more like the consumer applications we all love.
We'll be working in jobs that haven't been created yet, assisted by technologies like AI. Our offices might be replaced with differently designed spaces - mixes of coffee shops, coworking spaces, an other business centers for modern distributed teams. Companies will adopt technologies that not only make remote work possible, but even more efficient than ever before. If interested in continuing to learn about the future of work make sure to follow the blog, as we'll continue to dive into these topics throughout the year.
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