Automation and the Impact on Jobs

As technology progresses, many categories of jobs currently undertaken by people are being increasingly delivered by machines. We reviewed this topic recently in this post. ‘Automation’ isn’t a doomsday scenario; recent data from PwC and McKinsey suggests that while machines have assisted in replacing humans, so too have new jobs been created in an ever-automated working environment. Hence, we’re not looking at employed technology and jobless humans, but we are looking at a very different future to our recent past.

How so? Read on…

Automation and Work

There are many more categories of jobs today where automation has delivered a better, cheaper outcome.

PwC’s research, which reviewed tasks involved in over 200,000 jobs across 29 countries, sought to determine the potential for automation over the next 20 years.

They found a pattern over three periods, or ‘waves’. Check it out:

So… during the first ‘algorithmic’ wave, there’s a low displacement of workers to technology at around 3% in the early 2020s. Women will likely be more affected at this time, due to their higher representation in clerical and admin roles.

By phase two, the augmentation phase, an increase occurs as technology matures and becomes increasingly ubiquitous and sophisticated.

By the third wave – what they’re calling the ‘autonomy’ phase, which takes us up to the mid 2030s – up to 30% of jobs are likely to be automatable. In this phase, it’s estimated that men will be affected more, as machines take over physical and manual tasks – given the expected increase in autonomous machines.

According to this PwC research, automation has the potential of contributing $15 trillion to GDP in the year 2030, globally.

In addition:

  • Automation is expected to reach up to 30% of all jobs by the year 2030.
  • 30 % of the jobs reviewed are at risk of automation by the year 2030.
  • 44% of workers with lower education are at a higher risk of automation by 2030.
  • Jobs for women were at higher risk of automation over the next few years.
  • Jobs with male workers were at highest risk of automation in the longer term.

Source: PwC

Factors Determining the Level of Threat to a Job

When the topic of job automation comes to mind, we usually think of low-paying jobs as the immediate victim. However, research from MIT Management Review on threats to jobs proved that different categories of jobs and professions are at different risk of falling to the rise of automation. For example, a blue-collar worker, such as an electrician, is likely to see less disruption than a lawyer in the coming decades.

The prevalent discussion in the market today can focus on whether there will be enough jobs for workers in this ever-automated world. Historically this fear has proven unfounded, as labour markets adjust to technology, and, as we said earlier, also create new jobs. Check out the chart below: a look at the shift of employment and sector shifts over history in the US. Source, McKinsey.

A Plan for Integrating Automation into the Workforce

As time goes on, it’s likely that workers with a greater level of education will be less affected by automation. The answer to this: upping the education and retraining of talent.

This isn’t only the responsibility of business: according to PwC, governments also need to work towards providing opportunities for people to be retrained and to prepare them for potential career changes. This requires a cultural shift, where adaptability and ongoing learning will play a key role in ensuring society accepts the benefits of automation, AI & robotics, especially as the population ages, and the need to work extends to later in life.

In consideration of industries, STEM skills are the obvious one. A vast improvement and increase in female uptake of STEM careers will play a key role in filling tech jobs, and in enabling more workers to take on high-tech jobs in the advanced fields of AI & robotics.

Importantly though, remember this: soft skills remain critical. There are skills technology will never replace like engagement, interpersonal skills, management abilities, communication skills, character traits, emotional intelligence and social skills.

For more insights, take a look at the PwC report, here. McKinsey have also published research on the topic, here.

We’re keen to hear your views. Let us know in the comments below.