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Is the hollywood model the future of work?

20/06/2015

Econtalk had a terrific conversation this week between host Russ Roberts and planet money co-founder Adam Davidson about the Hollywood model of high performers coming together to complete short term projects and what it may portend about the future of jobs.

The conversation was inspired by an article Davidson wrote in the New York Times Magazine on this subject after he had worked as a technical adviser for the forthcoming film The Big Short.

For the first half an hour, Roberts and Davidson discussed Davidson’s experience working on the film itself then they go into more discussion about what the model suggests for the future of jobs.

Here are the key elements of the Hollywood model:

  • Workers have highly specialised and valued skills (make up artists and set builders command higher salaries than in the normal economy).
  • Workers come together to collaborate on a short term project which may last only a few months.
  • Constant market signals send participants relevant information about the value of their respective skills. Since each worker will likely work on three or four projects per year, they will often be negotiating wages so they are aware how the market is adjusting and whether their particular skill set is highly valued or whether they should develop other skills.
    (Davidson recounts a conversation with the make-up artist who noted a premium for making people look undead had arisen with the popularity of zombie films in recent years)*.
  • This model means high performers are likely to be handsomely rewarded as employers are more aware of their “added value” but mediocre performers are likely to struggle.

I found the discussion particularly interesting as a future journalist in a time of rapid changes to that industry yet Davidson signals a hopeful tone for high quality story tellers, if you can communicate your ability to add value you will do well.

I think the essential skill for many workers in the new economy will be marketing, each of us will need to establish our “brand” in someway and communicate as well as demonstrate how we can best add value.

The rise of Uber, AirBnB and other elements of the so-called “sharing” or “gig” economy provideĀ  opportunities for more workers to become entrepreneurs but these changes also affect relationships between employee and employer as employee benefits beyond the market wage each worker can command do not easily fit this new model.

Both the podcast and Davidson’s article are illuminating and highly recommended. Links are provided below.

Podcast discussion between Roberts and Davidson about the “Hollywood model”.
Adam Davidson’s article: What hollywood can teach us about the future of work.

*Hayek’s great insight was that prices reflect the specific knowledge of space and time. The Hollywood model makes those signals more explicit.

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