Retraining for the Fourth Industrial Revolution Must Involve Risk Sharing from Educator, Learner, Employer and Worker

By Henry Kronk
May 10, 2018

In recent months, many have anticipated or dreaded the onslaught of the fourth industrial revolution that automation will bring about. As with any prediction, there is much doom and gloom associated with it. Many have bemoaned the fact that both private and federal retraining efforts have largely failed to adequately retrain workers in the past. But those need not be the only two options available. Recently, some educators and companies have sought to share the responsibility of retraining with their learners/employees.

The story everyone has heard goes like this: automation is coming. The so-called fourth industrial revolution will–within one to three decades, depending on who one reads–replace a significant portion of the global workforce with intelligent robots. “According to our estimates, about 47 percent of total us employment is at risk,” write the authors of one well-respected and widely cited Oxford report. And for many, the answer to the growing workforce issue of automation is simple—get educated.

Education as the Cure-All to Automation(?)

“[T]he breadth of change is likely to be considerable, so the need for education will go up considerably,” writes Forbes’ Adi Gaskell (before giving several caveats). But for nearly every voice advocating for education as a solution to automation, there’s another saying it will never work.

automationOne epitome of this opinion is a piece The Atlantic ran in January of this year. It compares the current situation to the recessions of the ’80s and Reagan’s massive 1982 Job Training Partnership Act (JPTA). The program allocated an annual budget of $3 billion to try to help American workers re-skill and get back to work.

“Such programs have historically been unable to change an economy in which low-wage workers suffer from both low pay and a lack of autonomy,” writes Lolade Fadulu. “The initiatives have struggled to achieve their mission for several reasons. One, those who need the training typically don’t know about—or are excluded from—them. Two, course material tends to be disjointed from the needs of employers. Three, and perhaps most importantly, job-training programs don’t force employers to pay skilled people decent wages. It’s worth taking a closer look at why programs like this go awry.”

Fadulu’s article, titled ‘Why Is the U.S. So Bad at Worker Retraining?’ might bear a more appropriate title: ‘Why Is the Federal Government So Bad at Worker Retraining?’ It’s true, the private sector’s track record of carpetbagging re-trainers rolling through town in the wake of a bankrupt factory or mine is even less effective and significantly more malicious. But these need not form the only two options available for workers seeking to protect their jobs from obsolescence. Other for-profit retrainers are much more beneficial. But operating at the mercy of a profit margin has its own pitfalls.

Risk-Sharing in Education

Some institutions and employers have made fits and starts into methods of education in which both parties—learner and educator—have skin in the game. Last week, the Los Angeles Times reported on a cybersecurity company known as Malwarebytes. The company faced a familiar situation. It could automate it’s quality assurance testing and use tech to do the work of nearly 50 employees. It implemented those changes, but it also didn’t fire those employees. Instead, it retrained them. Partnering with Udemy for Business, Malwarebytes employees now conduct much higher-level work, allowing the company to provide higher quality cybersecurity options.

“The level of understanding between teams is now more on an even par,” said Noah Christianson-Stafford, according to the Times. Christianson-Stafford started as an entry-level software tester. He now is fluent in programming languages such as Python and PowerShell, and can help fix errors in the software instead of simply identifying them.

Learning Python is great, but it’s still not anywhere near on-par with a degree program. Gaskell, writing for Forbes, pointed this out as well (as one of his caveats): “education may not be the panacea it once was; empirically, the ‘education premium’ has slowed in recent years. Data scientists and on-call plumbers might both have a future, but not workers in jobs that can be routinised away.”

But a new movement in higher education seeks to get around the high costs associated with higher education. Income share agreements (ISAs) allow learners to fund college without taking on a prohibitive amount of debt. Once they graduate, they pay a portion of their income back to their Alma Mater for a given amount of time. Higher education in the U.S. remains antiquated in several areas. One of these is the fact that the cost of an Arts degree remains roughly the same as Engineering, despite the fact that, on average, the graduates of each program will earn significantly different salaries. In other words, there’s a fairly tenuous relationship between education and value.

Income share agreements, however, seek to solve that imbalance. They do so by placing the burden on the educator to train their learners for a job in the work place. The more successful their graduates are in the workforce, the more return they will receive on their investment.

Both ISAs and the partnership exhibited between Malwarebytes management and their employees exhibit a relationship that tends to be rare in retraining programs. With each example, both parties share some part of the associated risk.