A few weeks ago, the World Economic Forum (WEF) released The Future of Jobs Report 2018. The report takes an in-depth look at the world of work in what the WEF calls the Fourth Industrial Revolution. The report is based on a survey of over 300 chief human resource officers and top strategy executives from large global companies across 12 industry sectors. These companies collectively represent more than 15 million employees, and conduct business in 20 developed and emerging economies which collectively account for about 70% of global GDP.
First introduced at its 2016 annual Davos Forum, the WEF positions the Fourth Industrial Revolution within the historical context of three previous industrial revolutions. The First, - in the last third of the 18th century, - ushered the transition from hand-made goods to mechanized, machine-based production based on based on steam and water power. The Second, - a century later, - revolved around steel, railroads, cars, chemicals, petroleum, electricity, the telephone and radio, leading to the age of mass production. The Third, - starting in the 1960s, - saw the advent of digital technologies, computers, the IT industry, and the automation of process in just about all industries.
“Now a Fourth Industrial Revolution is building on the Third…” wrote WEF founder and chairman Klaus Schwab in a December, 2015 Foreign Affairs article. “The possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing.”
The Future of Jobs 2018 examines the potential of these advanced technologies to eliminate and create new jobs, as well as to improve the current workplace and prepare people for emerging jobs. Rather than looking at the future of work over the longer term, the report chose to examine the 2018-2022 period, which is within the planning horizon of the companies and executives that participated in the survey.
Drivers of Change
The survey identified four specific technology advances that are set to dominate business growth over the next five years: ubiquitous, high speed mobile Internet; widespread adoption of big data analytics; artificial intelligence; and cloud computing. These technology advances are being complemented by a number of positive socio-economic trends: the expansion of affluence, education and the middle classes in developing nations; growing economies around the world; and the move towards a greener global economy through advances in new energy technologies.
The survey also identified a few trends that will negatively impact business growth, including increases in protectionism and nationalism, cyber threats, increasingly aging societies, and climate change.
A Net Positive Outlook for Jobs
Survey respondents were asked to classify jobs, - across the total employee base of all participating companies, - in one of three categories: new, redundant, and stable, - in both 2018 and 2022:
- new, emerging jobs, are set to increase their share from 16% in 2018 to 27% in 2022;
- jobs expected to become redundant are set to decrease from 31% in 2018 to 21% in 2022;
- 48% of jobs are expected to remain stable over the 2018-2022 period.
“Applied to our sample, representing over 15 million workers in total, the above numbers would suggest a decline of 0.98 million jobs and a gain of 1.74 million job. Extrapolating from these trends for the global (non-agricultural) workforce employed by large firms… 75 million jobs may be displaced by the above trends, while 133 million additional new roles may emerge concurrently.” These projections, should be treated with caution, as they primarily represent the changes expected among the kind of large multinational companies that participated in the survey.
Achieving such a positive jobs outlook will require the careful management of a series of workforce shifts. Almost 60% of respondents expect that they’ll have to significantly modify their value chains by 2022, and nearly half said that they may also have to make changes to their geographical base of operations; almost 50% of companies expect that automation will lead to reductions in their full-time workforce; and over a quarter expect that it will also lead to the creation of new roles in their firms. “In summary, while overall job losses are predicted to be offset by job gains, there will be a significant shift in the quality, location, format and permanency of new roles.”
Emerging In-Demand roles
The survey also examined which jobs and skills are likely to be growing, which will likely decline and which will remain stable by 2022.
Jobs that are based on and enhanced by the use of technology are set to experience increasing demand. These include data analysts and scientists, AI and machine learning specialists, software and application developers, big data specialists, IT services, process automation, information security analysts, robotics engineers, and e-commerce and social media specialists. Also in demand are roles that leverage human social skills, including sales and marketing professionals, organization development specialists, innovation professionals, user experience and human-machine designers, and people and culture specialists.
Jobs expected to become increasingly redundant are generally routine-based, middle-skilled white-collar roles, including data entry clerk, accounting and payroll clerks, administrative and executive secretaries, accountants and auditors, bank tellers and cashiers. These jobs are most susceptible to advances in technology and process automation.
Among the jobs expected to remain stable are managing directors and chief executives, general and operations managers, human resources specialists, financial and investment advisers, database and network professionals, supply chain and logistics specialists, university and higher education teachers, compliance officers, and energy and petroleum engineers.
A Shifting Human-Machine Frontier
Most jobs involve a number of activities or tasks. Some of these activities are more routine in nature,- and thus more susceptible to automation, while others require judgement, social skills and other hard-to-automate human capabilities. But just because some of the activities in a job have been automated, does not imply that the whole job has disappeared. It generally means that the job is being done by humans and machines working alongside each other. And as technologies continue to advance, jobs will experience significant changes as an increasing percentage of their tasks will be automated and done by tools or machines.
Survey participants were asked to estimate the percentage of a job being done by machine now and in the future across the 12 industries covered:
- in 2018, an average of 29% of task hours were performed by machines versus 71% performed by humans;
- by 2022 this average is expected to shift, with 42% of tasks performed by machines and 58% by humans;
- by 2025, the shift is expected to further increase, with 52% of the tasks performed by machines and 48% by humans.
“Workers will require new sets of skills as the division of labour between humans and machines continues to evolve.”
The Reskilling Imperative
According to the WEF report, by 2022 over 50% of all employees will require significant retraining and/or upskilling. The growing demand for expertise in rapidly advancing technical fields like data science, AI, robotics, technology design and programming will require continuous training. We will also see increased demand in human skills like creativity, originality, critical thinking, emotional intelligence, leadership, reasoning, problem solving and ideation.
Surveyed companies highlighted three main strategies to manage their skills gaps. 84% said that they will hire new permanent staff already possessing the required skills; 81% said that they will seek to completely automate the tasks concerned; and 72% said they will try to retrain existing employees. In addition, two-thirds expect their employees to pick up the necessary skills on the job, and around 60% said that they will likely turn to external contractors, temporary staff and freelancers with the relevant skills.
Respondents also indicated that they will focus their reskilling efforts on high value and high performing employees, while only one third said that they will also target for reskilling those employees whose jobs are expected to be most affected by technological disruption. “In other words, those most in need of reskilling and upskilling are least likely to receive such training.”
“The inherent opportunities for economic prosperity, societal progress and individual flourishing in this new world of work are enormous, yet depend crucially on the ability of all concerned stakeholders to instigate reform in education and training systems, labour market policies, business approaches to developing skills, employment arrangements and existing social contracts,” wrote Klaus Schwab in the report’s preface. “Catalysing positive outcomes and a future of good work for all will require bold leadership and an entrepreneurial spirit from businesses and governments, as well as an agile mindset of lifelong learning from employees.”
This survey/study/report makes a great deal of sense. I am always bothered by projections of work that primarily look at / analyze the aggregate workforce at the macro level. I remain optimistic that at some future point in time, we will make the transition from the current age to a future age. Things will be better. This study seems to address a multitude of factors that will lead to successfully addressing issues that bridge from now to the future and/or that provide early warning of needed course changes to governments, employers, employees and those who hope to become employed.
Posted by: Bud Byrd | December 05, 2018 at 03:40 PM