With innovation and change comes opportunity. At the same time technology is causing unintended consequences jeopardising job security. Today's guest on No Ordinary Business, AJ Tibando, is speaking with our host, Gina Pereira about this issue and shares with us how she proposes to address it through Palette Inc.
Gina: Welcome, AJ. I want to thank you for taking the time to speak with me today!
AJ: Thank you, Gina. It is my pleasure to be here.
Gina: Before we get into today's topic, tell us a little bit about your own journey and how it led to the development and creation of Palette.
AJ: My journey has had lots of twists and turns, as many do. I started my career in politics and public policy. When I finished university I got a job at the provincial government of Ontario, Canada working as a senior political aid dealing with different kinds of policy issues. My first job was really formative for me; working at the Ministry of Training Colleges and Universities that the deals with education and employment. So when someone loses his or her job, that is the Ministry that you go to for retraining and different kind of support. I started my job there in 2008 on the day Lehman Brothers collapsed. That experience really shaped my understanding of the world; my understanding of the importance of work and the dignity of work, and the resiliency of people to deal with really challenging situations as they figure out how to adapt to them.
After six years working in government and seeing first-hand how policy can impact people's lives I started to get a real interest in the idea of continuing to do that kind of impact but in a setting outside of government. I saw this real opportunity in a sort of middle space between business and charity that was emerging at the time, called social enterprise or social innovation.
It was really a compelling space to be in because it took some of the well-proven principles behind how to build a successful business and tried to apply that to a social challenge to make an impact. As I started to explore that space, I saw a real gap in the ability to help people develop these kinds of organisations or solutions. Everything was designed to push you to pick either something charitable or something profit oriented. So a few others and I decided to launch an organisation called SoJo, which was designed to build education tools and curriculum and other resources for young social entrepreneurs like us who were struggling. I did that for about four years and when I left I realised I was very passionate about policy and going back to my policy roots, but I had also caught the entrepreneurship bug and loved the experience of building a vision and taking something from zero to launch.
I began working on this concept of Palette, which is my current focus. Palette is working to address challenges right now that exist all around the world and are particularly acute here in Toronto and across all of Canada.
To begin with, we have all this technological change that is impacting all sectors and all industries resulting in a significant amount of automation with more coming in the foreseeable future. That is really changing the way that people work and, in many cases, is eliminating jobs that otherwise used to exist. There is a lot of uncertainty and insecurity for workers these days trying to figure out where they go and how they navigate this change.
Gina: Do you see any particular industries that are most vulnerable or most affected by this evolution of technology and automation?
AJ: Absolutely. All industries are changing to some degree. What is most affected are the different kinds of tasks that workers do across these industries. Our research, out of the Brookfield Institute, where I am based, is focused on looking at the jobs that are currently most at risk. These are routine jobs that traditionally, or historically have been routine manual jobs. Think about a manufacturing line, somebody who is just manually screwing in a drill over and over again. Up until this point, that has been the primary space in which automation has taken place because it’s easy to create a machine that can do that.
What we are starting to see now with the evolution of artificial intelligence and machine learning is that the jobs that are most easily replaceable are still routine, what’s called ‘routine cognitive jobs’. For example, accounting software is replacing personal accountants and artificial intelligence replacing online content managers. These are not jobs that require physical routine activity but it is very easy to train a machine to do those activities. Those kinds of jobs are found in all sectors, which is what makes automation particularly challenging. It’s not like in a recession where the demand for a certain kind of product dipped. These jobs exist in all sectors and not only are they disappearing from these spaces but it makes it very challenging for someone who is trained in that job to move. It’s not about: ‘my sector is struggling because of these market forces, so I will find a similar job in a different sector that’s doing well’. It’s that: ‘my job is no longer required for this sector to succeed and for my industry and my company to succeed’.
Gina: To what extent are these redundancies playing out now? What’s the timeline in terms of reaching the pinnacle of impact for this issue?
AJ: Looking back historically using the example of manufacturing, if you were to go back 20 years and look at the people who made up a manufacturing line and the jobs and tasks that they did and compare that to that same plant today, you will see that these types of jobs have changed quite a bit - there are far more machines on the line, doing a lot of this work. Certainly, we can see that this has taken place in a lot of industries and it’s happening now. In terms of projecting forward, I don't think this is going to be a big cliff that we go off of all of a sudden. It’s sort of a slow rolling progression and a lot of it is not just dependent on whether the technology exists to do a job that a human otherwise did, but other factors come into play, like how cost-effective is it for a company to shift to this technology? What’s the marginal increase in efficiency that a company might receive from shifting to this technology? Since all these other factors go into determining whether these kinds of technology should be adopted, it’s really hard to project exactly how this will play out. We can anticipate when technologies might come online in a mass available way but there is still the business case that needs to be made for each company to adopt that technology. It’s a slow-rolling thing but certainly, you just have to look at your everyday life, to imagine how it's changed with the onset of technology. When you do your personal taxes lots of people will use software instead of going to an accountant. There are online personal assistants that people use instead of hiring an executive assistant. There are lots of subtle changes that we can see already taking place, but I think it will be a slow boil.
Gina: How are we responding to the issue? What is being done currently and is it enough?
AJ: There are a couple different ways to look at that. We are definitely at the beginning of a new iteration of this kind of automation. The routine manual automation has been happening for quite some time generally in unionised environments and unions will create support programmes to help these people find other jobs or new careers in different places. But there has been enough demand within these sectors to be able to find ways for them to move around. The other thing is that when you’re talking about routine manual jobs that are disappearing, they are very often low skill and so, putting wages and salaries aside, the cost of someone going from working on a line to another low skilled type job is relatively low as they haven’t sunk a lot of cost into higher education and higher skill set.
With this next tranche of change that we are anticipating, not only is it affecting a whole new different set of jobs but having skills and education are no longer protecting people by ensuring that their jobs won’t become automated. When we think about that kind of support and people who are losing those kinds of jobs, the ability to change from a mid-skilled job or a high-skilled job into another high-skilled job requires skills; unlike a low-skilled transition.
Then we look at the infrastructure that exists to help someone take the skills that they have and augment them into a different sector or industry where they can build on their current skill set in an area where there is still demand. That kind of labour market shift hasn't really happened in the past. Our education institutions, whether it is college or university, are designed to support someone to get that first job in the market such as a two-year diploma, or to accelerate and grow vertically within their chosen field by earning post-graduate certificates or graduate degrees to help them continue to climb the ladder. But the idea of this cross-sectoral job transition hasn't really been something that any infrastructure has been designed for because there's been no mass need for it in the past. If someone is going to make a radical career shift between sectors, traditionally that would be their choice and still, they would go back to school or they would create their own pathway, their own system of how they were going to navigate that change, but it was generally by their own choice. We are now entering a situation which isn’t necessarily by choice and people no longer have options within their chosen sector. They need to find new ways to apply their skills in a way that maintains their economic level and doesn't force them to slip into low wage or low skilled jobs. That system just hasn’t been designed before, so where we are at right now is seeing a lot of different new approaches appear in different environments attempting to create that. We know that in order to successfully adapt to this changing labour market and economy, it is going to require a new ‘culture of lifelong learning’. This is a phrase we hear often but without the infrastructure to support that, it can’t exist.
Gina: Is there a particular demographic that is especially vulnerable to having their jobs replaced through automation?
AJ: That’s a great question. I think it’s one of those things that really depends on your perspective. It may sound ominous, but it's probably safe to say that no one is particularly safe from this. It’s that kind of change that will affect everything. But I think there are a bunch of different considerations to understand the risk. With Palette, we’re looking at people who are mid-career because we think they face a particular, certain kind of risk where they gained their education in a time when they anticipated that would be it and that they would be able to then be prepared to grow and accelerate in their career path. They may have been in an industry for a decade or more, and have lost some of the networks and the different agility required to make transitions. And they are also at this point in their lives where they are not prepared to go back to school for two or four years and start from scratch. They have developed a portfolio of skills and profile of experience that shouldn’t be lost. So, that’s who we are focused on in terms of an at-risk group.
There are lots of people very concerned about youth coming out of school right now and what kind of job market they are coming into. I think in some ways they might be better prepared because they don't possess the veneer of expectation of security that so many of us have. So they are coming in with their eyes wide open, but certainly, the kind of jobs that are easiest to automate are many of the entry-level jobs that students or recent graduates most traditionally would do to get into the job market. And so you can see some of those kinds of jobs being replaced by gig-work, which is not a great way to build a career necessarily, depending on what you are trying to accomplish.
Gina: Your comments about the challenges for youth remind me of the findings of a recent empirical research review led by J-PAL LAC that looked at the issue of high youth unemployment in Latin America. The research demonstrates that one of the causes for high levels of unemployment with youth in that region results from skills mismatch. Youth are coming out of secondary school or some post-secondary training, be it vocational or university level, and finding that market demands do not align with their skills sets. I suspect that this issue is relevant in both developing and developed economies around the world.
AJ: Absolutely. That’s a great point and I think that skills mismatch is something we hear about all the time recognising that it is not a skill gap, in that these people lack skills, but that the training that is needed is not being met by post-secondary education or secondary education. I think there is a question of to what extent is a university about helping someone develop certain aptitudes and competencies versus hard vocational work skills. And I think there is a conversation to be had around the lack of employer-led training that has really disappeared in recent years for many companies. Also, at least here in Canada, many of our new job producers are small and medium-sized companies that don’t have a lot of capacity for training on the job. They are certainly expecting workers to be very much job-ready when they come out.
It all harkens back to this realisation that there is a certain type of applied skill that is very much needed and I think it's important to realise with technology that skillset demands will constantly change. There are two ways to look at the challenge you just described, which is – should universities or colleges be doing something very different in how they are teaching? Or, is there something outside universities and colleges that needs to become part of a more robust and complete educational experience and system for workers?
The challenge that arises when you try to change certain types of post-secondary education systems is that because of the speed at which technology is changing, which is super, super fast, and the speed at which universities and colleges change, which is super, super slow, even if you try to solve the problem within these existing institutions, you will very quickly become obsolete again and end up with the exact same problem. So, my perspective is that perhaps we shouldn’t be trying to shoehorn all of the solutions into the existing systems but recognise that because of the changing nature of work it requires a whole new additional layer of support and training for students who are graduating. These new approaches can be integrated into existing systems, but it doesn’t have to be a one-stop shop. You can imagine a situation where someone graduates with a commerce degree and but then does an additional six weeks of applied training that is highly career focused, outside of what you might get within a traditional degree. That approach could be applied to students as well as to people who are in the middle of their careers and need to make a transition. When you are in the middle of your career, it is similar to being a student, in the sense that you have this portfolio of experience and skills that you don’t need to start from scratch to build, but you do need that additional layer of training and education to be able to apply those skills in new environments.
Gina: This is a good opportunity to segue into how you propose to tackle these issues through Palette. Tell us about Palette and what it is designed to do.
AJ: Absolutely. As we have discussed, there are two challenges: the first one as we talked about at length is this challenge of automation. The second challenge that we are seeing on the positive side of this technology change is that there are all these new types of jobs, skills, companies and industries that are emerging very quickly and are growing really fast, but that are struggling to find workers. There are whole new skillsets in technical sales, data science, and in more advanced forms of software development. Even when we put STEM aside, there are more and more jobs coming available as people buy these services and products. You can also see it within more traditional industries that are adopting technology and integrating it into their business practices. Coming back to the example of manufacturing, where advanced manufacturing is now the norm for many companies that are using computer systems to manage their lines and their inventory, these companies are now struggling to find people who understand how to use these new systems with different technologies. Everywhere we look, in almost all sectors, you are seeing this decline in some roles but also this huge demand and inability to fill these vacancies in other roles. With Palette, our belief is that there are many people with a foundation of skill and experience that could be highly applicable to these in-demand jobs but cannot make that transition because they don't have that training pathway to move them from one sector to another. As I said, that's not a traditional move that you see people make on mass, so the infrastructure hasn't been created for it.
At Palette, we identify the supply of workers and their underlying skillsets, we also identify demand for different jobs and understand the underlying skillsets required to do those jobs and figure out how to match the two groups. Our next step is to create short-term training programmes that run between 6 to 12 weeks, enough time to get someone up-skilled and ready to make a move into these new businesses. We envision a training approach that involves both formalised training throughout this education programme along with 3 months of on-the-job work integrated learning experience to test out the fit between the trainee and the company. That’s the vision behind Palette. We are starting with the tech sector but think that this is a model, which once proven, could be applied broadly to a lot of different sectors and a lot of different sized companies.
Gina: Would you give an example of such a transition? For instance, someone in the middle of his or her career is working in one sector who could potentially be re-trained to find a job in another sector without compromising his or her earning potential?
AJ: Absolutely. We’re preparing to run a pilot of this model that is launching at the end of the summer and within that pilot, we are looking at the retail industry as the industry being impacted negatively by automation and we know there are workers who will be losing their jobs there. Specifically, we are targeting workers with some form of sales experience, whether it is on the floor sales work, or wholesale buying and account management. When you think about sales experience, the kind of skills you need to do it, you need to be a very clear communicator and be persuasive, to be able to work in teams and to understand how to hit certain targets. Those are highly transferable skills that can be valuable in a lot of different industries.
Our in-demand industry that we are looking at is tech, specifically, information communication technologies which include most of the software development work. In Canada right now we hear a huge demand from tech companies for the need for salespeople that understand how to sell a technical product. As these companies grow, these are jobs that will become more and more in demand. We see a lot of alignment when we look at the underlying skill sets from retail sales and the underlying skill sets of technical sales. The challenge for a retail worker to make that move is that while they might have those underlying sales skills, they don't necessarily have the sector-specific skills required to be able to understand how to apply these foundational skills in a job environment. They might not understand the language of technology and how certain software systems work and what makes one valuable over the other – the kind of information, or the kind of skills that you need to be able to understand the product that you're trying to sell. It is a lot to ask a company to develop an in-house training program that would bring someone like that up to speed. Most companies are well prepared to train their salespeople on their product but they are expecting a certain level of aptitude from the beginning.
We see Palette as serving as a bridge to get someone that technical proficiency they need and that doesn't mean that they need to understand how to develop software or different coding languages or any of these hard-tech skills. They just need to understand how to talk about tech, how to value tech, how to explain a technical product. And so, that’s what we would be looking to deliver a training programme on and then place that worker with the company so they can learn about that specific product and get some experience in the field of technical sales.
Gina: So, is Palette both a training and placement programme?
AJ: We are not a traditional placement agency where we are guaranteeing you will have a full-time job at the end of it; what we are guaranteeing is that you have some job experience. Over the past year, I have been having pretty extensive conversations with employers to understand what they're looking for in an employee. They revealed that a huge indicator that the employee will be able to succeed is that they have had some experience working in a similar type of work environment. And so, that’s what we want to provide these trainees: both the skill sets that they need as well as some foundational experience in that sector so that, ideally they will find full-time employment with the company that they are placed at. We have high hopes because the companies we will be partnering with are actively hiring for these positions. In the event that they don’t hire the trainee full-time, we think they will be much better prepared to find work in other similar companies in the future.
Gina: Are you focusing on one or two specific sectors that you could then branch out from? What is the potential scope of Palette?
AJ: Any iteration or cohort of the programme will focus on two sectors: on a supply sector and on a demand sector. For this pilot, our supply sector is retail and our demand sector is tech. But the model itself can be applied in a lot of different situations to a sector that is experiencing either the negative impact of automation on their workers or the demand for talent.
I also see a lot of opportunities for the programme to be applied to other cohorts of workers outside of mid-career workers. For example, we spoke a little bit about youth needing a finishing skills development programme when they graduate. Also, it has application for immigrants. In Canada, we take in lots of new immigrants every year who struggle to find work in their skilled fields because they don't have Canadian work experience. This programme can be a bit of a bridge to help them make that transition. Other groups include women returning to the workforce who need to brush up on their skills. I think there's a lot of different ways that this approach and concept can be applied, as we realise that lifelong learning is going to become the norm for a lot of people, especially if they are impacted by automation. We can see a lot of opportunities for this model to be applied in different ways.
Gina: I agree and think that the scalability potential is significant. Who is your customer? Is it industry? The government? The trainee?
AJ: That’s a great question that I've thought about a lot. I think you can sort of splice this model in a bunch of different ways to identify who our core customer would be. Traditionally with these kinds of programmes, we have thought about the worker as the ultimate customer. The challenge that has emerged from that kind of thinking is that it becomes very much supply focused in terms of what career path are you interested in? ‘What’s your passion?’ ‘What would you want to do when you grow up?’ In certain kinds of educational settings, those are great questions to have and the learner is certainly the logical customer. In this case, however, because it is very much a vocational job training programme, we really see the employer as the customer because if they are not happy with the quality of the trainee then they are not going to hire them. If our ultimate success indicator is the number of people we are able to transition into new careers, then that needs to be our focus. All of our decisions kind of flow from making sure the employer is satisfied. Much like a social enterprise model where you are looking at these hybrid product impact strategies, if we really zero in on making sure the employer is happy then we are actually going to see a very satisfied trainee, as well.
Gina: I think that industry input into the design of the programme is a critical component to success. There is research that suggests that such input is an essential component to the successful delivery of skilled workers who meet market needs.
Gina: What do you see as the barriers to entry into the market that you are confronting or that you anticipate you may confront for Palette?
AJ: I think there are a couple different challenges. We are structured as a non-profit and have a revenue generation model where we see both the employers paying partially for some of this work as well as the learners, but the core funding would come from government, at least in the early stages to fund the operations. That’s been really challenging for a number of reasons. I think that the government of Canada recognises that this challenge is very real and requires new approaches to solutions, but existing structures and programmes bind them. Federally, we have two separate Ministries that deal with economic development and industry: the Ministry of Employment, Workforce and Labour and the Ministry of Innovation, Science and Economic Development. One is very concerned about the talent shortages and the lack of talent for these emerging innovation-based companies, and the other is focused on thinking about how to help workers who are displaced. The challenge that Palette faces is that we sit in the middle of both of those issues and we do not cleanly fit within one Ministry or the other.
The other challenge we face is that a lot of programming for displaced workers is focused on highly marginalised and vulnerable workers. These workers have traditionally been described as having little to no education, someone who might be on social assistance, or someone who has been out of the workforce for over 10 years - all of the traditional and very challenging circumstances. What nobody has ever really thought about when it comes to vulnerability is the precarity of work induced by automation. Even though on the surface someone may appear well prepared for the workforce based on their education and work experience, if that education is now obsolete because of the way that technology has changed and their experience is entirely in a field that is no longer relevant or growing or hiring because of technology, then that is a very vulnerable worker. That's a big problem except our system has not been designed to see that problem as of yet.
We are trying to educate government and organisations broadly to rethink how we look at vulnerability. Since we have historically not looked at vulnerability in that way, we get surprised when we see statistics about the hollowing out of the middle class or the economic slippage of moderate or highly skilled workers and it catches us off guard because that's not supposed to happen. Because we're not looking at the circumstances in a complete way, we are not developing solutions to address them.
The biggest challenge is that a lot of the systems and the funding available to support these issues that is available from government or philanthropic or social impact funding is generally designed to help rebuild someone after a collapse. What we're doing is creating a resilient system that will help people avoid that collapse. It is hard to make the argument about ‘what could have been if not for us’. As the world is not on fire quite yet, people are asking: ‘why set off these fire alarms?’ or ‘why build a fire escape?’ The answer is that it'll be too late if we don't have the systems in place by the time this problem really gets rolling. That is the argument we are trying to make now and but it has been challenging.
Gina: That is a very poignant observation because so much of philanthropy has been reactive, rather than preventive. As the saying goes, ‘an ounce of prevention is worth a pound of cure’.
Switching gears, where do you want to see Palette in five years?
AJ: Great question. It can be hard to think about that sometimes when you are thinking about how can we get Palette up and running in six months! Certainly, I see this as a national programme, something that is applied countrywide, if not internationally, and certainly, within the next five years, I would like to see Palette working with a multitude of sectors and successfully seeing these transitions. I am really excited to debunk some of the ideas about what a suitable worker for certain industries looks like, and I hope that a platform like this will not only allow people to make transitions that they otherwise would have struggled to make, but will also help to open up the minds of sectors that assume that their talent pool had to come from very specific spaces and see that there's incredible talent everywhere. I am a big believer in human capacity and the ability to grow and meet the challenges in front of us, and being able to prove that these workers can do so much more will be really exciting.
I would like to see Palette working with a lot of different partners from different education sectors so we are developing a pedagogy of what we think this kind of training should look like. Our design is very much a partnership-based model where we would be partnering with other training providers to deliver the training. I would love to see a place where we become a catalyst for building this new system that is very much needed but doesn’t yet exist.
Gina: One of the things that I feel is great about your approach is the cross-sector collaboration that you are facilitating. I’ve observed historically that different sectors tackling the same issue often operate in silos, which is inherently limiting potential impact. The fact that your model includes participation from the public sector, private sector, and the individual is critical and sets you up for success.
If we could look at things more broadly now, I would love to know how you define ‘social enterprise’.
AJ: I haven’t thought about that definition in a little while but ultimately, social enterprise is an approach that brings together the best of the business model, its efficiency, rigour, and a mission focused on impact. I think that one of the core differences that separate the social enterprise from either a non-profit or a for-profit is that it has at least two bottom line objectives in impact and in revenue. What is important about that is not that it has two bottom line targets, but that it cannot claim success as an organisation unless it achieves both. To me, you are not a social enterprise if you are generating a lot of revenue but not moving the needle on the kind of impact you are trying to create. Even if you are a highly impactful social enterprise, if you are not developing a sustainability model with some form of revenue generation and independence, then you are not really a social enterprise. That is not judgement, some organisations should be non-profit, some should be for-profit, but if you want to be a social enterprise you have to figure out a business model that allows you to do both.
Gina: My vision is that the prevailing model will be focused on both profit and impact and considers all stakeholders.
AJ: Yeah. I think that is certainly something that should be the case and was a big motivator behind my earlier organisation, Sojo. Society has gotten away with not thinking about impact for a long time and that neglect has resulted in negative consequences, which is not benign, as you have impact one way or the other. Impact is just something that was not traditionally taught in business schools and no one has been really forced to think about it outside of CSR strategies. In the future we have to care about this, we have to think about it and when that happens you can come up with a really efficient profitable model that doesn’t require a ton of radical change. If you start from a place of building with intentional positive social impact in mind, it is totally possible.
Gina: In my experience, there has been a divergence between what is perceived as ‘doing well’ financially and ‘doing good’ socially and many successful business people who are also very philanthropic have not yet realised that their business values and operations need to align with their philanthropic values and mission. This contrast is also unsustainable and must be addressed.
One last question: where do you see the opportunities for major transformation in society that will lend itself to sustainability?
AJ: We could go sector by sector or industry by industry or silo by silo and think about all the ways things could be done better and more sustainably, but when I put on my policy hat, what it comes down to is how we as a society, as an economy, as markets, how we define success and the different incentives and disincentives we create for people to achieve that success. For instance, we can find ways to reduce carbon and pollute less, we can find ways to help workers transition to new jobs and try to avoid the precarity of work in different environments, and these are all really important things to get us closer to a sustainable society, but I think fundamentally we work against ourselves when we are not on the same page of what we are trying to achieve. Defining success as not profit in isolation of anything else, in seeing how all of our actions are integrated into thinking about people, planet, and profit and bringing that down to a human level, it's happiness, prosperity, and security. We have to think about how our actions are creating that environment for people every day and what are the benefits and rewards that we give people who do that well, or if there are benefits and rewards to people who ignore that entirely, then why would they ever change? Getting to the heart of those kinds of questions and rewriting some of the rules that our society and economy have been governed by throughout the 20th century, I think that’s the only way we can get to a truly sustainable and socially impactful place.
Gina: I think that's a great note to end off on. Before we sign off, how can readers connect with you?
AJ: I am on Twitter at ‘@ajtibando’ or they can visit the Palette website at www.paletteskills.org.
Gina: I want to thank you for your time and joining us today on No Ordinary Business! Thanks for all that you’re doing, AJ. I want to wish you and Palette success in your upcoming pilot and beyond!
AJ Tibando is a Project Lead at the Brookfield Institute, focused on the research and development of Palette Inc., an organisation focused on helping mid-career workers impacted by automation upskill to high demand careers in the innovation economy. AJ spent six years within the provincial government serving as a Senior Policy Advisor in the Ministry of Training, Colleges and Universities, Ministry of Research and Innovation and the Ministry of Community and Social Services. AJ is the co-founder of SoJo, a startup social enterprise dedicated to working with educators and nonprofits to provide curriculum and tools to train aspiring social entrepreneurs in the startup process. SoJo works with leading post-secondary institutions across Canada and the US, and its curriculum is used in training programs across Africa and the Middle East. AJ has a BA in Political Science from the University of British Columbia and an MA in Political Science from the University of Waterloo.