Knowledge workers are taking over.
A third of American employees are already knowledge workers. The number is lower in Australia and New Zealand. Yet we’re catching up.
In developed, developing and even in some undeveloped countries they are the fastest-growing employment group.
Knowledge workers outnumber industrial workers
In the developing world, knowledge workers outnumber industrial and agricultural workers. In more advanced countries they outnumber the two groups added together.
America has roughly as many as service industry workers. In most rich countries knowledge work is the most important sector in terms of economic and political clout.
A new idea
The idea that people can earn a living dealing purely with knowledge has only been around for 50 years.
Writer and management expert Peter Drucker is often credited with inventing the term. He first used the term ‘Knowledge Worker’ in his 1959 book “Landmarks of Tomorrow”.
Drucker modestly claims to be only the second person to use the phrase. He says the honour belongs to Fritz Machlup, a Princeton economist.
Drucker popularised the term. He spent 40 years expanding on the original idea, explaining its implications.
Knowledge workers misunderstood
Although the term is widely used and people generally understand what it implies, there is still much misunderstanding about its exact meaning.
One common misconception is that the term applies exclusively to people working in the information technology industry or elsewhere using products created by IT workers.
While almost all IT workers qualify, they are only a subset.
Anyone who makes a living out of creating, manipulating or spreading knowledge is a knowledge worker.
That’s a wide definition. It includes teachers, trainers, university professors and other academics. You can categorise writers, journalists, authors, editors and public relations or communications people as knowledge workers. We’ll put aside for one moment arguments about whether the knowledge created by these people is accurate. Lawyers, scientists and management consultants are all included.
One key difference with other white-collar workers is the level of education and training. There may be some who don’t have a formal tertiary education or high-level training. They are a minority.
You need a degree, most of the time
As a rule, they have a minimum of a university undergraduate degree. That’s not always the case. Older knowledge workers tend to have less formal qualifications than younger ones. That’s partly because higher education wasn’t ubiquitous when they started out — university isn’t the only path to knowledge.
Another reason is that practical experience counts for a lot. The idea here is that each individual possesses their own reservoir of accumulated knowledge they apply in their work.
Compared with other groups of workers, they are well paid. Knowledge workers can belong to unions. But are often not organised in that sense.
This can lead to forms of genteel exploitation. Few knowledge workers get overtime payments. Yet employers expect most to voluntarily work for considerably more than the basic 40 hours a week.
On the other hand, knowledge workers are more mobile than industrial workers and can often take their skills elsewhere at the drop of a hat. They often do.
Any employer who abuses knowledge workers’ professionalism is likely to see their most important assets walk out of the door. This applies as much today as it did when there were more jobs around.
Few governments have come to terms with the implications of having a highly mobile, highly educated, knowledge workforce.
Many can quickly find a new employer if necessary, most can move freely between countries. Any nation that doesn’t look after its knowledge workforce can expect to lose it.
New Zealand knowledge workers
This applies in New Zealand. We operate a so-called progressive income tax system that, at times, appears deliberately designed to alienate knowledge workers.
The marginal and absolute rates of income tax paid by most New Zealand knowledge professionals are higher than in many competing nations.
From that point of view, Australia looks attractive.
If anything the flow of knowledge workers migrating to more benign economies is accelerating.
Drucker distinguishes between classes. High-knowledge workers include professional groups such as doctors and teachers. They deal mainly in the realm of the mind. While knowledge technologists work with their hands and brains in the IT industry, medicine and other areas.
Although both categories are growing, the bulk of growth comes from this second group.