Amazon Will Spend $ 700 Million To Retrain Its Workers

WASHINGTON –
Amazon, the global e-commerce giant, just announced that it is planning to
spend $ 700 million over the next 6 years to retrain about one third of its
630,000 workers (about 275,000 of these are in the US). This is an almost
monumental undertaking. But this is not about philanthropy. This initiative is clearly
motivated by corporate self-interest.

Need to stay ahead

Indeed, looking ahead it is clear that Amazon, a major user/developer of the ultra- sophisticated ICT systems absolutely vital for the management of the millions of daily shipments that represent the core of its colossal e-commerce empire, MUST have the state-of-the-art technical tools. In order to retain its global leadership ranking in e-commerce, this giant must have the best of everything –and that includes top of the line engineers, ICT specialists, warehouse managers and also line workers who understand and can successfully interact with more and more complex and sophisticated equipment.

Amazon fully
realizes that the technologies that will inevitably affect all its systems and
operations and therefore its ability to beat the competition on price, speed
and overall quality of service, are being updated/transformed/disrupted
practically on a daily basis. And this means that the skills of an average
manager or worker at any one its warehouses or distribution centers, while
adequate today, will likely be behind the curve tomorrow. Hence the need to
invest –massively—in the retraining of Amazon’s work force.

Just the beginning

All this
looks smart, forward looking, and anticipatory. Still, we should understand
that this Amazon announcement is barely the beginning of an economy-wide
complex and mostly uncertain process that will have to be extended to almost the
entirety of the US and global work force, unless today’s global leaders –whatever
the sector they operate in– accept that they will be inevitably overtaken by
new companies whose workers and managers will be in full command of tomorrow’s
technologies.

A hypercompetitive global economy

Today and tomorrow being part of the global economy means and will mean accepting the challenge of operating in a hyper-competitive, turbo-charged global market place. Only the super smart and technology savvy corporations will have a shot at the top ranks.

Competition is an old concept. But the speed of this never ending race is a new phenomenon. And this race will require the adoption of a new psychology on the part of all participants. Everybody, from ultra-paid CEOs down to programmers and factory floor workers will have to embrace a culture of continuous change and constant disruption as the new normal.

Disruption is not new

Let me clarify this. Obviously, technological change and the disruptions that it causes are not new. If we go back to the history of the industrial revolution that began in Great Britain in the early 19th Century, it is mostly a history of disruption, sometimes very dramatic disruption, that caused dislocation and pain before the positive effects in terms of new jobs replacing old ones, higher productivity, better wages and lower cost of improved and more varied goods could be felt by society.

So, nothing new here.
Schumpeter’s definition of capitalism as a process of “creative disruption”,
keenly accurate decades ago, still applies today. Except for one thing: Speed.
And this is clearly a double-edged sword.

Speed is good and bad

Of course, today’s ability to innovate at a rapid clip, with the attendant ability to move quickly from concepts and prototypes to commercially viable applications ready for the market, is a major advantage.

All users, from companies to governments to the average consumer can avail themselves of the latest in technology, software, electronics, pharmaceutical products, banking services, and more, with obvious advantages in terms of greater efficiency, lower cost and improved quality of life.

That said, everybody has to know that retaining a technological edge is not an option. It is a “must have”. Mastery of the most up to date tech is absolutely essential for those companies that want to retain a top ranking or aim to have a decent shot at joining the top ranks in the never ending global competitiveness race.

No exceptions

Let’s be clear. There are no shortcuts. There is no way to stay on top unless you have full command of a powerful innovation/commercialization engine. If you don’t because you fell behind, or because you never got there (think about scores of poor, under resourced struggling countries), then you do not have a chance. You are in the dust, looking at the others forging ahead.

And this brings me back to Amazon and its bold announcement of its large work force retraining program. This one and other similar programs already adopted or soon to be adopted by other companies, if well structured, will have a positive impact on the company and its profits, on the employees themselves, and on millions of customers. Assuming that many other companies will follow Amazon’s lead, hundreds of thousands of workers, may be millions, will learn new skills and most probably will become employable in more challenging jobs that require a higher degree of ICT knowledge and technical sophistication.

Life time learning

But the real issue and challenge here is that for this approach to work as intended, training and retraining must become part of a “life time learning” culture and approach to employment. This culture must be understood and embraced by all or most workers –not just at Amazon, but everywhere.

And here is the thing. All this sounds good. But in reality it is hard, really hard. Human beings are of course intelligent and generally flexible, adaptable and capable of learning new things. However, for millennia, with very few exceptions, (craftsmen, artists, scientists, and very few inventors), a person’s occupation consisted in doing again and again (until they retired) what they learnt as a young person, And this applied even to the few who went to school and/or apprenticeship programs. Even after the onset of the industrial revolution, the new factory workers usually learnt and practiced a few, relatively simple manual tasks. Their jobs were about repeating the same operation again and again.

Change was slow

At a different level, the disruptive changes brought about by industrialization took a long time before they could be felt by the broader society. Even after the introduction of major innovations, the old ways survived for a long time.

For instance, the invention of the automobile more than a century ago did not mean that overnight all professions and crafts focused on horses (horse breeding, stable boys, blacksmiths, saddle and stage coach makers), disappeared. It took many decades for the car to affirm itself as the default, cost-effective modality for individual transportation on a large scale. It took Henry Ford, the assembly line, and the Model T for cars to be mass produced and finally become affordable. And even that radical transformation took decades. In other words, change, even very disruptive change, used to take a long time. And this long time frame allowed for some kind of transition and adaptation from the old to the new.

A different world

Today, we are literally in a different world. In certain sectors, including most ICT or IT related fields, the notion of the rapid obsolescence of even the most sophisticated innovation is a given. Focus on R & D and related high levels of funding must be a priority at all times. Even a major breakthrough –think of the first Apple iPhone— soon enough is copied, mass produced and eventually commoditized, while an eager public public waits for the next breakthrough.

All this is exciting. But it is also very problematic for the millions and millions of workers who have to embrace this life learning philosophy, unless they want to be left behind because they lack the skills of tomorrow.

It is great that a behemoth like Amazon, with more than 630,000 employees worldwide, has the resources, the vision and the internal organization to launch such an ambitious, multi-year retraining program.

Supply chains

But what about everybody else? What about medium sized tech companies in Malaysia, Vietnam, Mexico or Romania? Most of them today do reasonably well as suppliers and vendors to bigger companies. But what if the big company tomorrow needs a completely different set of parts or software? Can the medium size vendors quickly adapt, absorb the new technologies and deliver according to exacting specifications? Inevitably some will not be up to the task.

Efficient production is now based on ever more complex global supply chains. However, for this model to work smoothly everybody has to deliver their product or service according to a plan that will inevitably include the latest innovations. What is some key links of the chain falter because the workers in supplier X do not fully understand what they are supposed to do? This would cause delays or interruptions. And this upsets everything.

The new task of education

My last point is about the mediocre to poor quality of public education, in the US, but also other countries. This absolutely vital life learning approach has to be embedded in young people’s minds from a very early age, so that it becomes a good habit, and not a burden. But I am not sure that we are doing this today. May be this is happening in some elite, top schools. But not in your average American or European public school.

So, here we can see a huge disconnect between the pressing needs of corporations for adaptable workers eager to learn new things on a daily basis and a public education system usually based on imparting some discreet knowledge to students, giving them the misleading impression that this will be enough for their future professional life.

Well, it is
not enough. Hence the need to retool education, both in terms of its content
and in terms of the broader message given to young people: “Remember that school is just stage one of your life learning process
and obligations. If you do not embrace this constant learning approach wholeheartedly,
you will be left behind”.