- Deal Lead, Wellington Access Ventures
Ireland, Institutional
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Historically, big shifts in technology have had a profound impact on the workforce. The Industrial Revolution, for example, transitioned the US from an agricultural economy to a manufacturing economy, changing the skill sets that were most in demand. We believe the recent advancements in artificial intelligence (AI) represent a similarly seismic change that will affect labor markets for decades to come. At the same time, we believe a generational shift in values — including the definition of success — is taking place, which will alter tomorrow’s workforce in fundamental ways.
Recent research suggests that millions of younger Americans aim to earn their living through self-employment and/or in blue-collar work, avoiding the expense (and debt) of a four-year college education and eschewing a career behind a desk. We believe these trends will increase the demand for new approaches to education, training, and technological upskilling. Additionally, we believe that in the search for independent success, younger generations will increasingly leverage AI for help with launching a business, working as full-time creators, and monetizing their skill sets online and offline. Startups with business models geared toward delivering for the next-gen workforce can help enable this shift and may see growing addressable markets.
Capitalizing on the next generation’s desire for independent work
A 2023 survey found that 50% of Gen Z Americans (born between 1997 and 2012) envision a career as an entrepreneur, 44% aim to work in creative arts and media, 21% see AI as creating opportunities, and 40% expect AI to be a major disruptor.1 The desire for careers that are at once creatively based and independent from the corporate world appears to be a significant generational paradigm shift. Making a “side hustle” the main hustle or leveraging a unique skill or creative pursuit to launch a business are increasingly more attainable with the progression of technology and advancement of generative AI (gen AI) and agentic, or adaptive, AI.
Older Gen Zs are entering the workforce just as AI’s challenges and opportunities are coming into view. This generation will be the first to shape their careers around newer, tech-enabled — or better said, tech-dependent — industries that support and advance the low-carbon transition, the Internet of Things, and untold products and services across industries. Finally, younger generations, including Gens Z, Alpha (2013 – mid 2020s), and Beta (born today), are social media natives, typically far more comfortable building businesses and leveraging online distribution models than older generations. (It goes without saying that their customers are also equally comfortable transacting with e-commerce companies of all kinds.)
Younger workers increasingly appear to appreciate the value of a trade-based education and careers outside of an office — with some caveats. Research by ADP has found that the blue-collar share of employment among younger workers (aged 20 – 24 at the time of the study) spiked on the heels of the COVID-19 pandemic but has leveled off since 2022, to around 18%.2 While technology — including AI, automation, and robotics — will almost certainly reduce the number of human employees required for certain trades and manufacturing jobs, the abundance that AI will generate for society will lead to new types of blue-collar careers.
Recent legislation, including the 2022 US Inflation Reduction Act and the 2022 CHIPS and Science Act, is projected to create millions of jobs in manufacturing and construction, as industries ranging from solar power to semiconductors are incentivized to operate on US soil. The massive onshoring is likely to create a large employment gap in the medium term. We believe this gap is a tailwind for younger workers and their desire to move toward trade careers. One study suggests that without upskilling and other changes in the labor force, nearly two million jobs could go unfilled through 2033.3 Meanwhile, the economy for independent workers continues to expand. McKinsey’s 2022 American Opportunity Survey found that 36% of employed respondents identified themselves as “independent workers,”4 a significant increase since the consultant’s 2016 survey, in which 27% of worker respondents identified as independent.5
Where are the investment opportunities?
Building skills and making connections
While it would be practically unthinkable for a young workforce not to incorporate technology, the next generation of blue-collar workers will likely require upskilling and reskilling to be competitive in a job market that will increasingly require technological savvy (think robotics manufacturing). We are actively researching startups that help workers learn and acquire new skills with AI. Career-matching services that connect job seekers with companies aiming to fill trade-specific roles represents a growing market. We envision the potential for “LinkedIn 2.0” or an all-in-one career-focused social platform that catalyzes new types of professional connections. This platform could potentially unlock careers outside of traditional white-collar jobs, and instead open up new categories of blue-collar and trade careers, or even artistic pursuits.
Passion projects: Turning skills into entrepreneurship
In addition to upskilling and reskilling , we seek companies developing vertically integrated software to expedite the expansion of the independent-worker economy and help small businesses and entrepreneurs deliver their products and services at scale. We expect to see business models that leverage technology to help people establish independent work and turn it into a full-time opportunity that provides sufficient income, thereby truly propelling the SMB/independent economy. As well, we anticipate a market for AI-enabled software as a service (SaaS) designed to help workers connect the dots between their passions and their skill sets, toward the ultimate goals of monetization and career building.
As daunting as launching an entrepreneurial pursuit is, managing the day-to-day aspects of a new business are that much more complicated and time consuming. Gen AI can be used to facilitate payroll, accounting, and legal, tax, and financial hurdles. Small business owners — who often have no managerial experience — may be able to deploy AI agents to help run the show at a fraction of the cost of human employees. People seeking to translate a vocational interest or skill set into a business may greatly benefit from increasingly intuitive AI-enabled tools.
The psychological theory known as Maslow’s hierarchy of needs — also known as the hierarchy of motivation — posits that people work toward personal fulfillment, covering basic needs like physical safety first, and progressing toward cognitive satisfaction and “self-actualization” over time. The concept is commonly applied in business management, as a framework for career building. With AI making it faster, cheaper, and easier for entrepreneurs to launch a business, we believe companies that find ways to facilitate the next generation’s penchant for independent fulfillment could benefit from these generational tailwinds.
1“Gen Z is defining the future of work on their own terms,” Morning Consult and Samsung, 19 October 2023. | 2Sam Adieze and Ben Hanowell, “Gen Z prefers blue-collar jobs. Or does it?” ADP Research, 27 April 2024. | 3“Strong growth in US manufacturing, even as talent challenges persist,” Deloitte Research Center for Energy & Industrials, 3 April 2024. | 4“Inflation-weary Americans are increasingly pessimistic about the economy,” McKinsey & Company, 13 December 2022. | 5“Freelance, side hustles, and gigs: Many more Americans have become independent workers,” McKinsey & Company, 23 August 2022.
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