The shape of the economy is changing under our feet, and Senator Mark Warner (D-VA) and cyber business leaders in Loudoun aren’t sure we’re keeping up.
That was the takeaway message from a roundtable discussion Tuesday at the Mason Enterprise Center in Leesburg, where Warner met with business leaders to talk about cybersecurity and the “gig economy”—services like Uber that let people use their cell phones to monetize their cars, gig work, and time.
Warner said these are two subjects that “at first blush may not be all that connected, but they are both reflective of the changing nature of our economy.”
The ‘Gig Economy’
The gig economy is hard to nail down. In fact, nobody’s even yet agreed on a name for it—some people call it the on-demand economy, for example.
“You know you’re in the right spot when they don’t even have a name for it yet,” said Warner, who was a venture capitalist before entering politics. He said the gig economy started with outsourcing. Companies began shedding employees who weren’t essential to the company’s central function, and hiring employees on a per-job basis rather than keeping them on as salaried or hourly employees.
“Jobs are being transformed the same way the cable package is being transformed,” Warner said, highlighting the trend customers buying of individual cable channels rather than cable television packages. “You used to buy the whole person, and now you’re just trying to buy the individual task or job on an a-la-carte basis.”
Warner cited a study published in January that found 22 percent of the adult population had worked on an on-demand basis. This presents a problem for employees and employers: the federal government doesn’t yet have a good way to classify these employees.
“The law only looks at you in two buckets: You’re a 1099 independent contractor, or you’re a W-2 employee,” Warner said. This means that on-demand workers slip through a big crack in social safety nets. Benefits like insurance and retirement that are traditionally attached to a job are usually unavailable, and employers who try to chip in to help with those costs expose themselves to litigation. Warner said the solution involves reinventing the American social contract.
“What we’re looking at now is, maybe we need to come up with a whole new set of benefits that travel with the person,” Warner said, wondering how that could be balanced with flexibility, freedom, and uneven income that characterizes gig work. One of the handicaps, he said, is that the government doesn’t have good data on the gig economy.
“The last time the federal government looked at the contingent workforce was 2005,” Warner said. “That’s about as useful as if it was 1895.”
He said the Bureau of Labor and Statistics has begun a new look at the gig economy.
“I’ll make you a wager: whomever the next president’s going to be, this is going to be one of the most significant issues that our country’s going to have to address,” Warner said.
But the first topic on the minds of the executives and elected representatives in the room was cybersecurity.
“One of the biggest things that keeps me up at night is the cyber threat to our country,” Warner said. “If Americans knew how many times a day every institution is under some level of attempted hacking or cyberattack, it would be pretty loud.”
John Wood, CEO of Telos Corporation, agreed whole-heartedly, and said the problem requires a change in the way we think about cyberspace.
“Cyber, really, is another domain, just like land, sea, and air is a domain,” Wood said. “And I would argue that those other domains are easier to secure.”
Cybersecurity also lends itself very well to asymmetrical warfare, in which small groups, often unaffiliated with any recognized government, can stymie efforts by large governments, which can’t bring their superior numbers and force to bear.
“A group of hackers in Kiev could have as much potential as a whole country, in some cases,” Warner said.
And John Binkley, who serves on the Town of Leesburg’s Technology Commission, giving cybersecurity students practical experience is risky in the current legal environment.
“For cybersecurity, safe spaces are actually becoming more scarce as there is increasing legislation and regulation around researching techniques, and using those techniques even in laboratory environments,” Binkley said. “If you want to create this generation, this wave of cybersecurity experts, which is what I think we need as a country, you need to create a space for them to learn.”
But as Loudoun well knows, cyber and cybersecurity jobs are appearing faster than they can be filled. There are 200,000 unfilled cyber jobs in America, and Warner said more of those are in Virginia than anywhere else.
Binkley and others agreed that, with the dearth of employees to fill the glut of jobs, workforce development will be crucial to American cybersecurity. Warner mentioned recent proposals to teach coding as a language in schools.
“It’s something that puts a stake down and says to the world: We’re ready for the future,” Warner said.
But Virginia isn’t yet seen as the place for tech innovation. The Department of Defense and other federal and private offices look first to the elephant in the digital room—Silicon Valley. What’s more, California is fertile ground for new tech business.
“In the Valley, the funders tend to become part of the screening process, and there’s a network there that’s forty years old,” Warner said. “We don’t have that same ecosystem here, and that’s part of what we’re trying to create.”
Tech startups in Virginia face a number of hurdles: lowest-cost competition from larger companies, significant regulatory and paperwork hurdles for government contracts, and a lack of access to capital for small businesses.
Warner goes back to Washington with several ideas: a private startup fund for new cyber businesses, rules that allow workers more flexibility for workers switching back and forth between the public and private sectors, and a better training and career pipeline through public schools, community colleges, and universities.
“One of the challenges from today is going to be, how do you make sure that that small business voice is heard?” Warner said.