The new capitalism makes money out of people. The things that used to be the scarce resources in older versions of capitalism -- first land, later machines and buildings, then money -- are now readily available if and when needed. People with the right skills and aptitudes are now the sought-after assets.
In the short term it pays to milk those assets as hard as one can. Their time literally is money. In the longer term such overuse weakens the assets and they leave, burn out or find their skills outdated. Without proper nurturing the value of the assets declines. Balancing the short- and long-term use of their human assets is the most pressing challenge for manufacturers and other employing organizations in the new capitalism.
Organizations, however, are themselves changing. No longer do people need to be in the same place at the same time in order to get work done. People don't even need to be on the payroll. Organizations are dismantling themselves, spreading themselves geographically, and experimenting with different ways of paying for work and for ideas.
It will go further and more experimentally as organizations fit themselves around their key people. It is even possible that the whole structure of capitalism will have to evolve into something very different. Will ownership of a business mean anything much when most of the real assets of the organization are actually outside the organization? In one month in 2005 no fewer than 280,000 people became self-employed, the new members of the free agent society. Many of them will still be working for an organization, but they will not be on its payroll, nor in its buildings, nor participants in its pension plan.
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The difference is crucial. The individual is now in charge, free to determine the price of the work delivered, free to decide how much time to spend on it, and how much time to devote to other aspects of life. No longer will life be a balance of life and work, but a portfolio of activities, some for money, some for love, some for self-development, and some for duty's sake.
The new freedom is full of risk. But it also offers each of us the chance to set priorities for ourselves -- to change the balance of the portfolio as life changes. No longer can the organization be held responsible for the greater part of our life, for providing a career with a mix of interesting work, for offering development opportunities and, hopefully, a steadily increasing income. Employability, not guaranteed employment, is all that is being offered now. That is a nice way of saying, "It's up to you."
Some people will rejoice in the new freedom this contract offers, the chance to design one's own life. Many will tremble at the thought. But we would do well to prepare for it, for as life gets longer, careers inside the organization get shorter and fewer.
Charles Handy is a social philosopher living in London. A former RoyalDutch/Shell executive, an economist, and a professor at the London Business School, he is the author of such works as The Age of Unreason and The Age of Paradox. His latest book is Myself and Other More Important Matters, published in May in the UK by William Heinemann. Forthcoming is The New Philanthropists, to be published in October 2006.