Blockchain: A solution to the broken data layer underlying the global labor market

Let’s face it: The job market is completely out of date. It’s been like that for a while. Change finally comes based on three major forces all converging. These forces—the volatile and disrupted labor market, growing privacy concerns, and the rise of blockchain technology—are creating a necessary shift in the way individuals navigate their careers and livelihoods, and how employers and other labor market stakeholders make workforce-related decisions. The possible end result is a once-in-a-generation revolution for the labor market.

A volatile and disrupted labor market

Technological and social changes are driving the megatrends for the future of work. With the global skills gap, the talent shortage, the polarization of the labor market, increased inequalities and the increasing flow of non-standard employment, the labor market continues to be one of humanity’s biggest challenges in the coming decades.

The right to work – free choice of work – is a fundamental human right. The modern labor market is fragmented, ultra-specialized, filled with all kinds of alternative work arrangements or gigs. It becomes an extremely confusing environment to navigate as the growing sense of job insecurity cuts to the core of identity and social stability. Now more than ever, we must accelerate our ability to develop and deploy human capital on a global scale.

Growing privacy concerns

With the advent of the commercial Internet in the 1990s, data collection efforts began to increase exponentially to generate mountains of information. The personal information users give away for free is transformed into a valuable commodity. For a long time, brands could do this unabated and consumers did not voice their concerns. However, that is beginning to change. According to the Pew Research Center, 79% of Americans now report that they are concerned and confused and feel a lack of control over the way companies use their personal information. These growing concerns and the cascade of privacy scandals that have come to light in recent years are driving lawmakers toward much stricter privacy laws and enforcement.

The rise of distributed ledger (blockchain) technologies

Blockchain is no longer just about Bitcoin or cryptocurrencies in general. Instead, it can be seen as a disruptive, revolutionary technology that will have a major impact on multiple aspects of our lives. A blockchain is a distributed database or ledger shared between nodes in a computer network operated by a community of independent and unrelated entities, usually incentivized to provide computational resources to the network. The innovation of blockchain is that it guarantees the fidelity and security of the data records it stores and generates trust without the need for a centralized controlling entity.

The revolutionary power of such technology can be compared to the revolution sparked by the internet. Just as the internet is a means of sharing information, blockchain technologies can be seen as a way to introduce the next level: the sharing of trust.

Fixing the broken data layer that underlies the global labor market

The new contours of the new world of work are quickly becoming a lived reality for millions of workers around the world. The possibilities for economic prosperity, societal progress and individual flourishing that lie in this new world of work are enormous. Yet they crucially depend on the ability of all affected stakeholders to initiate reforms in education and training systems, labor market policies, business approaches to developing skills, employment arrangements and existing social contracts.

Hiring people based on what they say about their own skills, identity and educational credentials is terribly inefficient. Self-reported career records are unreliable and non-standardized. Misrepresentation is common. Verifying applicants’ and employees’ data requires manual, week-long processes that add unimaginable friction and costs to the labor market. In fact, today’s labor market data exchange infrastructure has more in common with the outdated postal service than with this generation’s digital world.

Clearly, we need a new data-sharing architecture to replace the outdated, fragmented way talent represents their career reputation across the labor market via resumes and other self-reported online profiles.

Blockchain technology has the power to overcome these challenges by allowing individuals to own their careers and personal information, rather than relying on LinkedIn and other third-party job boards to ultimately control an individual’s data.

Blockchain has the potential to radically change the way people navigate their careers and livelihoods and how employers make talent decisions. Ultimately, this technology – although still in its infancy – may just change the labor market.

Dr. Gurevich is the founder and CEO of Velocity Career Labs™ and the Velocity Network Foundation®.