IP 18: Should Big Tech Be Thinking Bigger On Social Mobility?
Lessons to be learned from other sectors?
A very Autumnal feel in the air at the moment. The rather late summer that the UK enjoyed rapidly being replaced with falling leaves and longer nights. Thanks for all of the comments about the AI Regulation Typology piece a few weeks ago, clearly an issue that is at the forefront of many people’s minds.
Readers might be interested to know that the paperback version of my 2021 book “The New Snobbery” has just been published and updated, with an all new “afterword” talking about how things have moved on between 2021 and now. You can buy it for a genuine bargain price here.
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Thinking bigger about social mobility
One of the major themes of the book is the number of people from working class backgrounds who are still too often shut out from some of the major professions. British politicians talk regularly about the importance of “social mobility”, with their American counterparts still speaking of the American Dream, where hard work is rewarded.
In 2009, the UK government appointed a commission on “Fair Access to the Professions” to tackle this issue, which continued after the change of government the following year as the “Social Mobility Commission”, which is still doing great work. This Commission has produced some pretty stark findings, including that the “better off are nearly 80 per cent more likely to end up in professional jobs than those from a working-class background”, and those from a working-class background in professional jobs earn 17 per cent less than those from better-off backgrounds.
This all matters for several reasons. First, rapid technological change might further increase social and opportunity divides if there isn’t an emphasis on constant reskilling throughout society. Second, both countries and companies will be limiting their potential if they aren’t thinking about how to maximise the potential of people from working class backgrounds. Third, tech companies will increasingly be expected to play a leadership role not just in reskilling, but also in ensuring socio-economic diversity. In improving socio-economic diversity, leadership has often been provided by professional services firms, rather than tech companies, and their work in this field could provide an important model to be studied.
This note has some ideas about moving this agenda forward, but I’d also really value your thoughts. Please drop me a line david@artemonstrategy.com
Bridging the digital skills gap
Even before the rapid acceleration of AI, the “digital skills gap” was an issue that was, correctly, troubling policymakers. 44 per cent of people in the European Union lack basic digital skills and the UK government has estimated that Britain’s “digital skills gap” costs the country up to £63 billion a year in lost GDP.
The so-called “half-life” of newly acquired skills continues to shrink with technological advance. The half-life is the amount of time it takes for skills to become 50% less valuable. Some research suggests that for digital skills this has reduced from around five years to less than three. And the usefulness of newly acquired skills will only diminish more rapidly as technology becomes more and more advanced.
Clearly the rapid advancement of AI has the potential to accelerate this skills gap even further, meaning that constant updating of digital skills will be increasingly important with the potential for labour market displacement. Research by Open AI finds that “approximately 80% of the U.S. workforce could have at least 10% of their work tasks affected by the introduction of GPTs, while around 19% of workers may see at least 50% of their tasks impacted.” And research by McKinsey shows that generative AI will considerably increase automation across economic sectors.
Needless to say, governments have an important role to play in tackling the potential for the digital skills gap to become a chasm. Singapore, with its Skills Future initiative, is leading the way. The European Union has a well-funded digital skills programme and the UK has announced a Digital Skills Council to tackle the Digital Skills Gap.
Alongside governments, tech companies are also going to have to consider how to further boost their engagement in skills training and development. Google’s career certificates and Digital Garage, for example, represent impressive examples of the work already being done by tech companies to ensure that people have the skills they need to prosper. But as technology advances and the potential for labour market displacement becomes greater, then societal and governmental expectations on big tech around workforce development and digital skills training will only increase. And reskilling will need to be an almost constant process, rather than a one-off.
This might involve:
More intensive partnerships with governments, labour unions, small businesses and others to ensure that tech company expertise on emerging skills is being utilised at the right scale. Such partnerships might also consider how workers can become aware of the skills needed at an early scale and are able to update their skills on a regular basis.
Working with universities, community colleges and civil society groups to ensure that regularly updated digital skills training is available to as wide an audience as possible, with tech companies potentially working with education providers on curriculum design and delivery.
Considering how important community institutions, such as libraries, could be utilised as digital skills centres.
Building socio-economic diversity within tech firms
The Social Mobility Foundation publishes an annual list of top-ranked employers for social mobility. Notable high-performers include law firms, professional services companies and banks - all sectors that have received criticism in the past for their lack of social mobility. Tech companies are largely notable for their absence from the list.
US based tech firms have led the way in Diversity, Equity and Inclusion (DEI) initiatives around both race and gender, which is of course important and often linked to socio-economic factors through “intersectionality”. But it is often other industries that have led the way about initiatives relating to socio-economic factors. As a Harvard Business Review piece in 2018 noted, “very few companies include socioeconomic class as a dimension. That can make white-collar workplaces alienating to professionals who grew up in blue-collar households.” They went on to recommend that:
“Companies need to integrate class into the conversation today if they want to be inclusive and desirable workplaces tomorrow. We know people leave jobs where they feel underappreciated and unwelcome. We also know class backgrounds add skills to employees’ toolboxes for success. It’s a no-brainer: companies should aim to have the most tools at their disposal — this means more diversity… By failing to acknowledge the importance of class background in workplace culture, organizations are risking their future — a future that’s already arrived.”
As noted, some large companies have begun to take decisive action to address this. Accenture, for example now no longer have a college degree requirement for the majority of their engineering roles. PWC now publish data on socio-economic and disability pay gaps as part of their annual report and have developed an action plan to enhance social mobility s part of their recruitment and workforce development programmes.
KPMG are also publishing the make-up of its workforce based on socio-economic background and has set a target for 29 per cent of their UK partners and directors to come from a working class background by 2030. They are notable in their use of data around socio-economic diversity regarding recruitment, retention and promotion and publishing this research externally, against the backdrop of their 2030 target. Recently a KPMG piece of research found that:
Socio-economic background has the strongest effect on an individual’s career progression, compared to any other diversity characteristic… socio-economic background, measured by parental occupation, had the strongest effect on how quickly an individual progressed… Individuals from lower socio-economic backgrounds took on average 19% longer to progress to the next grade, when compared to those from higher socio-economic backgrounds.
Professional services terms are largely using parental occupation and type of school attended when defining class.
The kind of approach taken by professional services firms could provide an interesting model for tech firms and others looking to boost their social mobility offering. Companies who have been at the forefront of other elements of DEI could now look to integrate social class into their diversity approach and be seen as leaders in social mobility as well. This might include:
Expanding already existing apprenticeship schemes (notably within Amazon, Microsoft and Google) to align with the more traditional definition of apprenticeship - leading to a full-time paid role and considering socio-economic factors when broadening apprenticeship schemes.
Considering which roles might be open to people without university degrees (notable that a number of tech companies, including Google are already taking steps on this route.
Building partnerships with organisations like the Social Mobility Foundation, who have direct expertise and skills in this area. Potentially use these partnerships to further diversify recruitment pools and reach into “social mobility cold spots”.
Use key countries where social mobility is a key metric, such as the UK, to develop pilot programmes aimed at boosting social mobility within tech firms.
Consider the reform of recruitment processes, such as collecting socio-economic data at recruitment stage (as is now done by professional services firms) or CV blind recruitment, which have been shown to improve socio-economic diversity.
Build on the data-sets that have been used to provide transparency in other areas of diversity in order to develop an effective way of measuring and improving socio-economic diversity in both recruitment and progression.