There is a greater concern regarding the future of employment today than there has been at any point in probably the last 100 years or more. The question is whether or not this concern is justified.
Since 2000, we have witnessed the acceleration of a technological revolution; a radical transformation more comprehensive and more encompassing than anything we have seen before. There is no question that technology is doing an increasing number of jobs traditionally undertaken by humans, and this trend is set not only to continue, but to do so at a faster pace affecting both workforce size and composition.
In a recent study undertaken by the World Economic Forum (WEF) involving 15 economies covering some 65 percent of the world’s total workforce, it is suggested that by 2020, around 7 million jobs will be lost and just 2 million created as a result of developments in genetics, artificial intelligence, robotics and other technological change. The belief is that if human involvement is not essential, technology can do a more efficient job.
But haven’t we been here before? History has a litany of incidents where technology has replaced workers. A notable development was the introduction of the mechanised loom in the UK in 1811 that made hand weavers almost redundant. When the Luddite Movement set about smashing this new technology, it not only resulted in significant military force being used to suppress the actions of the Luddites, but also the Tory government’s enactment of the Frame Breaking Act of 1812 that made the death penalty available.
Drastic measures for sure but, today, a big difference from yesteryear is that few doubt that technology holds great promise for the future, both on a personal and business level. However, the patterns of employment, production and consumption resulting from these developments are creating major challenges.
One clear example is the widening gap between employment and productivity. In the aftermath of WWII, employment and productivity closely tracked each other. Increases in employment corresponded to increases in productivity. The latter was a crucial indicator of growth and wealth creation, a measure of progress. As businesses generated more value from their employees, everyone benefitted. Countries became more wealthy which, in turn, increased economic activity and created even more jobs.
The close tracking continued until 2000 when things started to dramatically change. As the economies of developed countries became more dynamic, employment and productivity started going in different directions. The gap between the two widened with job growth suddenly slowing but productivity remaining robust.
It would be reasonable to assume that the developments in technology are largely responsible for both the healthy growth in productivity and the decline in jobs. Technological advances have also resulted in a downward pressure on wages. Coupled with increasing numbers or workers becoming unemployed, the upshot of that has been less money available for the goods being produced. A double-edged sword!
Despite widespread agreement that technology will make huge advances in the coming decade, the jury is still out on the real impact on employment. In a recent Pew Research Centre study (August 2014), an attorney with a major US law firm stated: “The field within which I work currently employs many thousands to review documents. They are already being replaced by predictive coding algorithms. By 2025, those jobs will not exist for any but the most opaque documents and thus there will be many thousands of lawyers out of work. I find it difficult to imagine any industry which is more knowledge and thought intensive than law and we are already being replaced by machines.”
The Pew report also quoted Celia Pearce, an associate professor of digital media at the Georgia Institute of Technology: “Although they certainly shift and disrupt the labor ecosystem, if you look at the total net effect, history does not bear out the myth that technology replaces people. First, people make technology, and since technology becomes obsolete at an increasingly accelerated pace, the need for people who make it will only grow; second, people are required to maintain technology—technology is notoriously poor at taking care of itself; third, people are also required to assist other people in using technology.
So the view of technology and its effect on employment is not universally negative. Disruption is not the same as displacement. The key issue here is that technology will require new labour forms, not less.
If, as the WEF study suggests, 35 percent of the skills considered important in today’s workforce will have changed by 2020, then the concern about the future of employment may be justified. It is incumbent on individuals, businesses and governments to address this with some degree of urgency.
Individuals will need to take a proactive approach to their career development through continuous learning. Business leaders will need to establish training programmes that address not only their short- and long-term corporate objectives, but also the career aspirations of their employees. Governments must create an environment (both through the education system and in employment) that encourages and assists companies and individuals to achieve their objectives.
What shape will the new labour forms take? Much will depend on the industry, and some, particularly in manufacturing, will be affected more by technological change than others. However, the overriding shift will be in digital-age literacy as new technology creates new and different kinds of jobs..
Even with advanced technology, basic literacy such as the ability to read and write will remain essential. As the workplace changes and evolves, people at all levels in the organisation will need to be able to master both current and new technology to communicate and collaborate with others, to effectively solve problems and to accomplish the tasks that they are given. They must learn how to select the most appropriate tools for these tasks and to apply them efficiently and effectively.
The digital era will also push a growing percentage of the workforce towards creativity, inventive thinking and entrepreneurship. Society has always evolved and will continue to do so. Some jobs will be displaced but others will be created. And out of this will come further opportunities.
The gap between employment and productivity may continue to widen but, fundamentally, the way we live and work (aside from any geopolitical issues) should change for the better. As the so-called “Fourth Industrial Revolution” takes shape, Individuals and business leaders simply need to recognise the technology-driven transformations and opportunities that lie ahead and capitalise on them accordingly.
By Stuart Hall of Tyzack.
Stuart has spent the last fifteen years in Executive Search. He started his career working for a property company in the early 1990's. Stuart conducts searches on a Pan European and Global basis to hire Executive and Non Executive Directors for businesses in the Financial Services and Real Estate sectors who are typically going through a period of change and transformation. He has also appointed Board members in the Not for Profit and Academic arenas in recent years. Typical mandates have included: CEO, Head of Strategy, Global Head of Specialised Lending, Head of Investment as well as functionally CFO and CRO.
He joined Tyzack in 2013 having spent the previous nine years with Garner International and Norman Broadbent where he was responsible for Real Estate and Wholesale Financial Services. Prior to joining Garner, Stuart worked for a Singapore based Executive Search firm.
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