Earlier this year, the World Economic Forum (WEF) published “The Future of Jobs Report 2023.” The WEF has been publishing Future of Jobs Reports since 2016 to explore how socio-economic and technology trends are likely to shape the evolution of jobs and skills over the following 5 years.
“In 2023, labour-market transformations driven by technological breakthroughs, such as the coming of age of generative artificial intelligence (AI), are being compounded by economic and geopolitical disruptions and growing social and environmental pressures,” wrote WEF Managing Director Saadia Zahidi in the Preface of the 2023 Report. Encompassing almost 300 pages, the report explores how jobs and skills are likely to evolve in the 2023-2027 period. Its trends and predictions are based on a survey of over 800 large companies which collectively employ over 11.3 million workers across 27 industry clusters and 45 economies from all around the world.
Let me discuss a few of the report’s key findings and predictions.
Diverging labour-market outcomes between low-, middle- and high-income countries. “The intertwined economic and geopolitical crises of the past three years created an uncertain divergent outlook for labour markets, widening disparities between developed and emerging economies and among workers.” At 4.9%, the 2022 unemployment rate across OECD countries is at its lowest level since 2001, while the unemployment rates in three quarters of OECD countries are below pre-pandemic levels. On the other hand, the labor-market recovery from COVID-19 disruptions has been significantly slower in many developing economies.
Employment levels have also been diverging for individuals. Workers with only a basic education were hardest hit in 2020, and slower to recover to their pre-pandemic employment levels. “In many countries the increase in unemployment from 2019 to 2021 of workers with a basic education level was more than twice as large as the impact on workers with advanced education.” Women experienced greater employment loss and a slower recovery than men during the pandemic, and so did younger workers. In addition, the global economy has experience the largest inflation levels in almost 40 years, leading to a cost-of-living crisis which has affected the most vulnerable hardest.
Technology adoption will remain a key driver of business transformation in the next five years. Over 85% of surveyed organizations identified increased adoption of new and frontier technologies and broadening digital access as the macrotrends most likely to drive the transformation of their companies.
The Fourth Industrial Revolution, first introduced by the WEF at its 2016 annual Davos Forum, has been accelerating the pace of technology adoption and shifting the frontier between humans and machines across sectors and geographies. Building on a fusion of technologies that blur the lines between the physical, digital, and biological spheres, technology is not only altering the way we work, but also changing job content, skills in need, and which jobs are being displaced.
Approximately 75% of companies are planning to adopt big data, cloud computing and AI over the next five years. Digital platforms and apps topped the list, the choice of over 86% of respondents, followed by education and workforce technologies (81%), big-data analytics (80%), IoT and connected devices (77%), cloud computing (77%), encryption and cybersecurity (76%), e-commerce and digital trade (75%), and artificial intelligence (75%).
The impact of most technologies on jobs is expected to be a net positive over the next five years. Big-data analytics was selected by 58% of survey respondents as the job most likely to grow by 2027, followed by climate change mitigation (50%) and environmental management technologies (46%), encryption and cybersecurity (43%), biotechnology (43%), agriculture technologies (41%), digital platform and apps (41%), health and care technologies (40%), and education and workforce development technologies (40%).
AI is expected to result in significant labor-market disruption, with substantial job displacement offset by job growth elsewhere in the organization to result in a net positive. “Generative AI has received particular attention recently, with claims that 19% of the workforce could have over 50% of their tasks automated by AI and job losses making headlines, while others expect the technology to enhance jobs.”
Broader application of Environmental, Social and Governance (ESG) standards was identified by 81% of organizations as having a significant impact in driving business transformation. “Climate change adaptation and the demographic dividend in developing and emerging economies also rate high as net job creators.”
The human-machine frontier has shifted, with businesses introducing automation into their operations at a slower pace than previously anticipated. Organizations estimate that about one third of all business-related tasks are being performed by machines while the remaining two thirds are performed by humans. This is about the same as the level of automation estimated by respondents in the WEF’s “Future of Jobs Report 2020.”
Overall employers have revised down their predictions for automation five years out, from a prediction of 47% automation in the 2020 report to a prediction of 42% automation in the 2023 report. Task automation predictions vary from 35% for reasoning and decision-making, 47% for performing complex and technical activities, and 65% for information and data processing.
“The potential scope of automation and augmentation will further expand over the next few years, with AI techniques maturing and finding mainstream application across sectors. It remains to be seen how technologies going through the most rapid changes, such as generative AI technology, may further change the make-up of automatable tasks over the 2023–2027 period, with some recent studies finding that Large Language Models can already automate 15% of tasks. When combined with applications which can correct known issues with existing Large Language Models (such as factual inaccuracies), this share may increase to 50%.”
Employers estimate that 44% of workers’ skills will be disrupted in the next five years. Cognitive skills will keep rising in importance, reflecting the increasing importance of complex problem-solving in the workplace and the economy. Not surprisingly, creative thinking was mentioned as an increasingly important skill by 73% of survey respondents, followed closely by analytical thinking which was mentioned by 72%. They were followed by technological literacy (68%), curiosity and lifelong learning (67%), resilience, flexibility, and agility (66%), systems thinking (60%), AI and big data (60%), motivation and self-awareness (59%), talent management (56%), service orientation and customer service (55%), leadership and social influence (53%), and empathy and active listening (52%).
Respondents express confidence in developing their existing workforce, however, they are less optimistic regarding the outlook for talent availability in the next five years. 60% of organizations highlight the difficulty of bridging skills gaps in their local labor markets as the key barrier preventing their industry and workforce transformation, while 53% identify their inability to attract talent as their main barriers.
“The transformation of jobs and skills have significant impacts on businesses, governments and workers worldwide,” said the WEF Future of Jobs Report 2023 in conclusion. “It is crucial to develop insight forecasts, identify the appropriate talent to promote growth, and make informed decisions on managing the significant disruptions to jobs and skills for employers and workers alike.”
“After widespread instability in the last three years across the world of work, we hope the outlook provided in this report will contribute to an ambitious multistakeholder agenda to better prepare workers, businesses, governments, educators and civil society for the disruptions and opportunities to come, and empower them to navigate these social, environmental and technological transitions. The time is ripe for business leaders and policy-makers to decisively shape these transformations and ensure that future investments translate into better jobs and opportunities for all.”
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