The Five Hidden Forces That Help Determine a Worker’s Value
How Michael E. Porter’s seminal model can help us plan for the future of work
Michael E. Porter’s Five Forces has been an influential framework to model business strategy since its original publication in 1979. Porter, an influential economist and Harvard Business School professor, developed the Five Forces as a tool through which to assess the competition within an industry. The premise is simple: business leaders can analyze their industry through five lenses — threat of new entrants, threat of substitutes, bargaining power of suppliers, bargaining power of buyers, and rivalry among competitors — to better understand the attractiveness of that industry and the restrictions on profitability for companies within it. With this information, it becomes easier to determine where to focus your company’s resources and attention.
When I first learned the model, I couldn’t help but wonder if it could be applied to a different economic perspective. And as an advocate for worker empowerment, of course I had to find out if it could help illustrate the dynamics of a labor market in a new way. Instead of looking at the environment of competition between firms selling products, I decided to use the model to look at the environment of competition between workers selling their labor.
