Excerpts from a discussion HireOwl had with David Sorin, the head of the Venture Capital & Emerging Growth Companies practice at McCarter & English, where he works with early stage and growing tech startups.
Dave framed our conversation with his observations of the new digital marketplace:
“The No. 1 content company in the world—Facebook—doesn’t own any content. The No. 1 lodging company—AirBnB—doesn’t own any real estate. The No. 1 transportation company—Uber—doesn’t own any cars. The No. 1 wholesale company—Alibaba—doesn’t own any goods.”
According to Dave, the ‘new economy’ looks very different for people just entering the workforce.
“My parents’ generation had one job from the time they left high school until the day they retired. My generation has moved to a new job every few years. Many [millennials] are going to work for multiple employers at the same time.”
“Employers don’t want bench capacity. They don’t want to pay expensive benefits for full time employees.” New technology is allowing more companies to utilize remote workers a la carte. We call them freelancers, consultants, and/or independent contractors. Businesses can now say “I only want to pay for the portion of you that I’m going to use.”
Not surprisingly it’s all about new technologies.
“Thanks largely to new technologies and related productivity enhancements, businesses today are much less labor intensive than ever before. Many of us, in a knee-jerk reaction, assume that globalization is the primary cause for a declining need for employees here in the U.S. A far greater cause of the declining need for employees, however, comes directly from massive increases in productivity due to digital technology and the internet.”
Digital platforms for handling data and communication have decreased the need for mid-level jobs. Without the middle rungs, there isn’t as clear a ladder to climb. “The ideal ‘career path’ is no longer an option for many students and young people just entering the workforce.”
“The flip side is that businesses can be much less capital intensive. This, coupled with a rapidly changing employment sector, is a strong motivating factor for people to be more entrepreneurial.”
In other words, employees (or independent contractors) are becoming less and less hamstrung by tools and infrastructure. We don’t need an office to house a supercomputer, nor do we need to be on the factory floor inspecting our widgets. We can fit that functionality on to the smartphones in our pockets.
One might expect Dave’s field, law, to be among the least-changed industries since the school-to-job path is straightforward and inflexible. You need to earn a specific degree from a specific type of school, pass a specific test, and then you can find a placement through your school’s professional network. But, according to Dave this isn’t so. “In the legal profession, firms used to decide two years in advance who they were going to hire. That isn’t the case anymore.” Law schools that aren’t preparing their students for an uncertain and evolving job market “are doing a disservice to their students.”
Everything is moving faster. This is particularly important for those in higher education (students, faculty, and staff) to understand. “Better, faster, cheaper applies to everyone, including professionals and knowledge workers.”
New entrepreneurial programs are one way that schools are preparing their students for the future. One example is NYU’s Leslie eLab, where Dave holds regular office hours for NYU students and is a contributor to panel discussions and other events.
Dave warns that “entrepreneurial institutes [like the Leslie eLab] shouldn’t be looking only for the ‘next big thing’.” Rather, “they should offer tools that develop the entrepreneurial skill sets of their students. Students need to learn when and how to take reasonable, rational risks in support of innovation.”
Finally, Dave agreed that while “school should be about finding your passion, it also has to be about how to monetize that passion.”
Students, to identify a passion that you can turn into a career, it is imperative that you stay ahead of these rapid changes in the labor market and the economy more broadly. Working freelance jobs while still in school can give you the versatility necessary to navigate whatever uncertainty might lie ahead in your career.