Mind the Gap or Jump Straight into It?
Volume 1
/Business, Society, Gap Analysis
Writer: Katie Pagenkopf
/Art Direction: Christian Garavito
Gaps have a conflicted identity. Depending on the context, a gap could be a problem to fix, an opportunity to exploit or the best place to buy a pair of blue jeans. In business, the gap between consumer needs and a competitors' offerings is sought after as a new revenue stream by executives and is an example of a "good" gap. In services, a gap between the number of agents available to answer inbound calls and the volume of calls is a “bad” gap as it will lead to long queues of frustrated customers.
AWS: The lifecycle of a business gap
In the early 2000s, when Amazon was just an online bookstore, its leaders found that the speed to release new features was not keeping pace with consumer demands (a bad gap!) so they decided to build a shared layer of infrastructure. This innovation became Amazon Web Services (AWS) but originally existed to save software engineering teams time, “on general capabilities like storage, compute capabilities [and] data bases,” meaning that this initiative was undertaken specifically to fill a gap, not to launch a new business unit. Despite the original charter, the company did start to sell excess infrastructure capacity; fast-forward twenty years and AWS' operating profit is three times that of Amazon's overall. In this example, Amazon took one of their own operational gaps, solved the gap, then monetized their solution in the marketplace. Amazon's evolution of AWS, over two decades, shows how gaps start as problems but can morph into opportunities.
Our future on Earth: Too few people for the jobs to be done
Now, let's look at gaps in demographics and how they might impact the way civil society functions. We know that household sizes are shrinking as fewer adults have fewer children. We also know that lifespans are extending, changing the ratio of life dedicated to full time work so that, “By 2050, people aged 65 and older will make up nearly 40% of the population in parts of East Asia and Europe. That's almost twice the share of older adults in Florida, America's retirement capital.” This means that our future on this small blue dot will be an increasing number of older people who need support by a smaller and smaller cohort of working people.
Lest you think 2050 is too far off to be taken seriously, consider that by 2030, "There will be a global human talent shortage of more than 85 million people," or roughly the population of Germany. As of 2023, the United States is already experiencing worker shortages in certain industries like home-building where pre-fabrication methods are accelerating in response; as well as long distance trucking where the average age of drivers was 35 years old, when Amazon execs were first hatching their plans for AWS but is now 55. The US Chamber of Commerce confirmed that as of 2023, "all industries have a worker shortage except for nondurable goods manufacturing, wholesale and retail trade, construction, and transportation and utilities."
How technology creates experiences that could cure gradual depopulation
Enter Raquel Urtasun, the CEO and founder of a self-driving tech start-up, Waabi. Urtasun says “By eliminating most human truck drivers, it allows those workers to consider more attractive jobs that don't require being on the road for weeks.” These more attractive jobs could be in elder care or home construction where workers can swing by the grocery store after their shift instead of sleeping in the back of a truck's cab at a generic rest stop. Society accrues qualitative benefits like stronger community bonds and more meaningful employment. Assuming that self-driving technology continues to evolve over time, more use cases for its application will be identified, built, and deployed making it cheaper and more reliable.
Now imagine your favorite diner. Imagine the type of work that is needed from the employees at your diner. While it may not require weeks away from home like a trucker, the work is generally repetitive, the hours can be inconsistent, and the pay is not outstanding.
At minimum, you are likely to use a QR code to view the menu on your phone, you may even place and pay for the order on the same device. To order, consume and pay for your meal, you may only need two human interactions for the experience: A host to show you to your table and the server who brings you your order. Unless of course, the diner has robotic servers that can deliver a stack of pancakes to your table without the need for a human. What was once a high-touch experience where you'd be asked multiple questions (How would you like your eggs? Butter served on top or on the side?) is now possible through technology one, with maybe two human interactions. Covid-19 is the often-blamed culprit of service changes in restaurants, but in truth, the pandemic simply accelerated existing trends of staffing shortages. Experts from Restaurant365 advise that we are experiencing, "Deep-seated and long-term supply dynamics," that create, "A persistent gap between employer demand for new hires and the supply of candidates." Expect that the QR codes, digital payment and robotic servers are here to stay.
Covid-19 is the often-blamed culprit of service changes in restaurants, but in truth, the pandemic simply accelerated existing trends of staffing shortages.
So what?
Between today and 2050, it's the companies who learn how to deploy new technology in ways that decrease their need for a human work force who will best navigate an ever-shrinking human population. As more and more technological solutions are deployed to replace human interactions, there will need to be coordination across multiple systems, and there will be gaps that will emerge. Self-driving trucks sound fabulous, but how does it refuel or recharge? How do the world's gasoline stations retrofit themselves to service automobiles that don't have a human operator? Each gap that new technology creates will represent an opportunity—suddenly the future points towards an entirely new format of gasoline stations, and a commercial opportunity for the company that figures it out. Ensuring seamless integration of experiences may be "just" a service issue today, but in the world of tomorrow, it is a strategy for staying ahead of demographic shifts.