Commodification

When I started my career many decades ago, the mantra of the time was to make everything systematic so that even if individuals change, the system would sustain and provide uninterrupted service. Of course, there were always individual qualities that cannot be replaced, but a good deal of standardization of experience can be achieved. Take the example of an institution delivering education. If the curriculum was designed around a base of slides and exercises with a delivery format consisting of key points, then most classes would end up delivering a base quality regardless of how good or bad the instructor was. Then if the organization was good at hiring the best, it was assured of consistent good quality. Without the system, the organization is held hostage to star performers. This concept led to explosion of the franchise style business.

Over the decades this idea has morphed into commodification of everything. Commodification has helped package work in a structured manner and outsource it to low cost destinations. This as in turn helped generate employment in developing countries as well as providing cheaper goods in the developed countries. The motivation to this process was to increase the bottom line by cutting costs.

Is there something called too much of a good thing? The next step to cut cost follows in the same vein. Using automation and self service options where possible to reduce employee costs further. This has led to great improvement in profits but also meant that in developed countries, the rank of self employed has increased and average wage increase is anemic at best. Another trend in this area is the demand for temporary foreign workers in the developed countries despite the fact that millions from the developing countries come to USA/Canada etc for studies. The paradox is that education in developed countries do not meet employer requirement but employees from developing countries have the cutting edge skills that are needed. So the question is how bad are Canadian and American universities compared to universities in the developing countries when it comes to producing employees meeting the requirement of employers?

Coming back to the original train of thought, the current iteration of refinement of commodification is to have a corporation that is just an intermediary. Ride share companies are a prime example. The extreme version would involve individuals buying self driving cars and letting them out as rental.

Overall commodification and technology revolution is bringing greater choice and lower costs. The million dollar question is how will the customer be able to pay the costs when even low level work like driving a truck or taxi is going to be automated? I guess the question in front of every youngster would be that if university education is not going to provide stable job assuring a decent life, what is going to be the education of the future?

 

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