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Esteban | ˈe-stə-vən - /collection/work-i/

Contractors and the future of work

Nov. 12, 2021

Read time: 2 minutes and 31 seconds.

tags:
  • work
  • philosophy
  • economics

How age old wisdom holds up 250 years later

You probably already know that teamwork makes the dream work.

However, the way teams will operate is going to be hyper-focused on individual skills. The future of work isn’t about being a jack-of-all-trades, but a master of one. Ironically, this is an age old bit of wisdom taken from the Wealth of Nations. If you haven’t read it, you…. probably won’t. It’s like 700 pages and the first 100 pages are pretty dull, but it’s insane the number of predictions that happened on behalf of good ol’ Adam Smith.

Division of Labor: It’s Older Than You Think

As i’ve said, this concept isn’t new. It goes all the way back to Adam Smith’s The Wealth of Nations, published 250 years ago. Now, he had made an example about a pin factory where he had visited and he had seen pin workers or builders or manufacturers who are working with hand tools and how an individual who would build pins would be able to build anywhere from 10 to 20 pins a day. Smith saw that one person doing every step to make a pin could only produce about 10-20 pins daily.

By dividing the labor, a group could crank out 40,000-50,000 pins a day.

Which makes one think: Cool. Pins. Who cares?

But the truth is that our work and specialization of different roles have extended to emulate the division of labour described in the book. He had this incredible way of understanding how we would naturally go this route because of efficiencies and peoples’ willingness to pay for this solution. I mean, would you rather make the pins or just buy them?

Specialization in the Modern Workplace

This isn’t just about old-timey pin factories. We see this specialization everywhere in modern business, especially in tech. What used to a limited set of developers trying to put out an app and see what happens, we now have companies like Facebook which have highly specialized teams. For instance, their newsfeed alone might have 8-16 people working on it, including business analysts, data scientists, and developers. This is all in an effort to include diverse skill sets and people onto a product that “solves” a problem. Their objective is to keep you glued to the newsfeed and that ultimately helps the whole Facebook/Meta ecosystem.

With this division of labour, each person can focus on what they do best, leading to faster and better results.

Contracting and the Gig Economy

  • Because of this, we’ll see more and more contracting and freelance work. Companies will hire specialists for specific tasks rather than generalists for broad roles. This is not about replacement, but more about refinement and we have directionally been moving like this for 200 years. Think about Airbnb, Uber and Turo. People who made it their business to leverage these platforms to acquire working assets to be the “plug” for a given fleet of cars, homes, experiences, etc.

IRL Division of labour continuing to grow

The core idea from Adam Smith—dividing labor to increase efficiency—is more relevant than ever. As technology advances and industries evolve, the ability to specialize will be a key driver of success for companies, freelancers and consultants alike. So, find your niche, hone your skills, and get ready to contribute your unique expertise to the future workforce.

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