Last year, McKinsey launched a multi-year study to explore the potential impact of automation technologies on jobs, organizations and the future of work. “Can we look forward to vast improvements in productivity, freedom from boring work, and improved quality of life?,” its initial article on the study asked, or “Should we fear threats to jobs, disruptions to organizations, and strains on the social fabric?”
Most jobs involve a number of different tasks or activities. Some of these activities are more amenable to automation than others. But just because some of the activities have been automated, does not imply that the whole job has disappeared. To the contrary, automating parts of a job will often increase the productivity and quality of workers by complementing their skills with machines and computers, as well as by enabling them to focus on those aspect of the job that most need their attention.
Given that few jobs or occupations will be entirely automated in the near-mid future, the study focused instead on the kinds of activities within jobs that are more likely to be automated, as well as how those jobs and business processes will then be redefined. It did so by analyzing the extensive data in O*NET, a web-based application sponsored by the US Department of Labor which includes the most comprehensive information on US occupations.
The study analyzed around 2,000 work activities across 800 different occupations, and grouped them into 18 different capabilities, - 3 of them social in nature; 10 cognitive; and 5 physical, - and then assessed the automation potential of each. It found that 45% of work activities could be automated using existing, state-of-the-art technologies.
But, AI, robotics and other advanced technologies are now challenging these automation assumptions. “It’s no longer the case that only routine, codifiable activities are candidates for automation and that activities requiring tacit knowledge or experience that is difficult to translate into task specifications are immune to automation.” Automation is now increasingly applied to activities requiring cognitive, physical, and social capabilities that not long ago were viewed as the exclusive domain of humans. “In many cases, automation technology can already match, or even exceed, the median level of human performance required.”
According to McKinsey, “fewer than 5 percent of occupations can be entirely automated using current technology. However, about 60 percent of occupations could have 30 percent or more of their constituent activities automated. In other words, automation is likely to change the vast majority of occupations - at least to some degree - which will necessitate significant job redefinition and a transformation of business processes…”
“As roles and processes get redefined, the economic benefits of automation will extend far beyond labor savings. Particularly in the highest-paid occupations, machines can augment human capabilities to a high degree, and amplify the value of expertise by increasing an individual’s work capacity and freeing the employee to focus on work of higher value.”
This past July, McKinsey published a second article on its automation study, which examined in more detail the technical feasibility of automating 7 different occupational activities:
- Physical work in predictable environments, e.g., manufacturing, food service: 78% automatable;
- Physical work in unpredictable environments, e.g., construction, agriculture: 25%;
- Processing data, e.g., finance, retail: 69%;
- Data collection, e.g., transportation, utilities: 64%;
- Stakeholder interactions, e.g., retail, finance: 20%;
- Expertise in decision making, planning, creative tasks, e.g., professional, education: 18%;
- Managing others, e.g., management, education: 9%;
A companion interactive website adds the ability to analyze the automation potential of over 800 occupations based on the study’s data sets. For example, the US manufacturing sector comprises 11.8 million full time employees, and has an overall automation potential of 59%, based on the automation potential and time spent in each of its 7 occupational activities; the finance and insurance sector comprises 5.5 million full time employees and has a 43% automation potential; and the administrative and government sector has 17.3 million full time employees and an automation potential of 38%.
The article reminds us that while technical feasibility is a necessary precondition for automation, it’s not a sufficient predictor. Other factors also come into play, including the costs of developing and deploying the automation technologies; the availability and costs of labor; additional benefits like higher quality and performance; and regulatory and social considerations.
The most automatable sector in the economy is accommodations and food service, with a 73% potential. Almost half the labor time of its 12 million employees is spent on predictable physical activities with an automation potential of 94%, which includes food preparation, cooking and serving; cleaning food preparation areas; and collecting dirty dishes. A variety of technologies are being tested, including self-service ordering, robotics servers, and even the automation of a number of cooking and food preparation tasks.
“But while the technical potential for automating them might be high, the business case must take into account both the benefits and the costs of automation, as well as the labor-supply dynamics…,” notes the article. “For some of these activities, current wage rates are among the lowest in the United States, reflecting both the skills required and the size of the available labor supply. Since restaurant employees who cook earn an average of about $10 an hour, a business case based solely on reducing labor costs may be unconvincing.”
Not surprisingly, healthcare and education are among the sectors with the lowest potential for automation since they both involve extensive human interactions, expertise and judgement. Overall, healthcare has a 36% automation potential. The potential is lower for health activities requiring medical expertise and direct contact with patients, and higher for activities like food preparation in hospitals and data collection.
At 27%, educations has the lowest automation feasibility of all the sectors examined in the McKinsey study. “To be sure, digital technology is transforming the field, as can be seen from the myriad classes and learning vehicles available online. Yet the essence of teaching is deep expertise and complex interactions with other people,” - among the least automatable of tasks.
“Understanding the activities that are most susceptible to automation from a technical perspective could provide a unique opportunity to rethink how workers engage with their jobs and how digital labor platforms can better connect individuals, teams, and projects. It could also inspire top managers to think about how many of their own activities could be better and more efficiently executed by machines, freeing up executive time to focus on the core competencies that no robot or algorithm can replace - as yet.”