Future of work | Daily News

Future of work

Across the world every human being asks what he can do to earn to live. It’s also true the world continues to innovate, mechanise and uses to technology daily. It could off course begin to place less emphasise on the use and intervention of human hands. The article today looks at global trends. The next article will look at what it’s like in Sri Lanka.

There is growing polarization of labour market opportunities between high- and low-skill jobs, unemployment and underemployment especially among young people, stagnating incomes for a large proportion of households, and income inequality. Migration and its effects on jobs has become a sensitive political issue in many advanced economies.

The development of automation enabled by technologies including robotics and artificial intelligence brings the promise of higher productivity (and with productivity, economic growth), increased efficiencies, safety, and convenience. But these technologies also raise difficult questions about the broader impact of automation on jobs, skills, wages, and the nature of work itself.

Many activities that workers carry out today have the potential to be automated. Independent workers are increasingly choosing to offer their services on digital platforms including Upwork, Uber, and Etsy and, in the process, challenging conventional ideas about how and where work is undertaken.

Labour markets are under strain, and talent is underutilized

Underemployment and unemployment are high around the world. In the United States and the 15 core European Union countries (EU-15), there are 285 million adults who are not in the labour force—and at least 100 million of them would like to work more. Some 30 to 45 percent of the working-age population around the world is underutilized—that is, unemployed, inactive, or underemployed.

This translates into some 850 million people in the United States, the United Kingdom, Germany, Japan, Brazil, China, and India alone. Most attention is paid to the unemployed portion of this number, and not enough to the underemployed and the inactive portions, which make up the majority of untapped human potential. Almost 75 million youth are officially unemployed. Women represent one of the largest pools of untapped labour: globally, 655 million fewer women are economically active than men.

Drop in household incomes in advanced economies

Globalization has brought numerous benefits, including lifting millions of people in emerging economies into the consuming class. But it also has had an impact in some sectors like manufacturing in advanced economies, with some jobs moving offshore. Better support could have been provided to help affected workers build new skills and transition into new sectors or occupations.

A survey we conducted in France, the United Kingdom, and the United States showed a significant proportion of those whose incomes stagnated are worried about their children’s economic prospects—a sharp departure after many decades in which it was an article of faith that every generation would enjoy higher living standards than their parents. Middle-income households have been the most affected, and young and less educated people are especially vulnerable. Across all age groups, medium- and low-skill workers have done worse than those with a college education. Many blame governments, global institutions, corporations, and establishment “elites” around the world, and the principles of free trade and open borders are under attack.

Skills, jobs and locations

Educational systems have not kept pace with the changing nature of work, resulting in many employers saying they cannot find enough workers with the skills they need. In a McKinsey survey of young people and employers in nine countries, 40 percent of employers said lack of skills was the main reason for entry-level job vacancies. Sixty percent said that new graduates were not adequately prepared for the world of work. There were gaps in technical skills such as STEM subject degrees but also in soft skills such as communication, teamwork, and punctuality. Conversely, even those in work may not be realizing their potential. In a recent global survey of job seekers conducted by LinkedIn, 37 percent of respondents said their current job does not fully utilize their skills or provide enough challenge.

Some of the mismatching is locational: where there is demand for work, there may not be available and qualified workers to be found. This geographic mismatch can be seen across regions within countries, and between countries.

Cross-border migration fills some skill gaps but can create tensions

Migrants made an absolute contribution to global output of roughly $6.7 trillion, or 9.4 percent of global GDP in 2015. However, migrant workers, on average, earn wages that are 20 to 30 percent lower than those of comparable native-born workers. More effective integration approaches could lay the groundwork for economic gains of up to $1 trillion globally, benefiting both economies and individuals.

In the context of challenging labour market conditions, popular sentiment has moved against immigration. Surveys conducted by MGI suggest that a significant proportion of middle- and low-income groups in advanced economies who are experiencing flat or falling real incomes are pessimistic about the future and likely to hold particularly negative views about immigrants.

Many activities workers carry out today have the potential to be automated

As machines evolve and acquire more advanced performance capabilities that match or exceed human capabilities, the adoption of automation will pick up. However, the technical feasibility to automate does not automatically translate into the deployment of automation in the workplace and the automation of jobs.

Technical potential is only the first of several elements that must be considered. A second element is the cost of developing and deploying both the hardware and the software for automation.

The supply-and-demand dynamics of labour are a third factor: if workers with sufficient skills for the given occupation are in abundant supply and significantly less expensive than automation, this could slow the rate of adoption.

A fourth to be considered are the benefits of automation beyond labour substitution—including higher levels of output, better quality and fewer errors, and capabilities that surpass human ability.

Finally, regulatory and social issues, such as the degree to which machines are acceptable in any particular setting, must also be weighed. It is for these various reasons that go beyond purely technical feasibility of automation that our estimates for “whole-job” automation are lower than other estimates. Our scenarios suggest that it may take at least two decades before automation reaches 50 percent of all of today’s work activities, taking into account regions where wages are relatively low.

Digitally-enabled independent work is on the rise

The proportion of independent work that is conducted on digital platforms, while only about 15 percent of independent work overall, is growing rapidly, driven by the scale, efficiency, and ease of use for workers and customers that these platforms enable. Such platforms include Uber, Etsy, Didi, and others.

While those who pursue independent work (digitally enabled or not) out of preference are generally satisfied; those who pursue it out of necessity are unsatisfied with the income variability and the lack of benefits typically associated with traditional work. Policy makers and innovators will need to grapple with solutions to these challenges.

Not to be forgotten— technology creates new jobs and income possibilities

Digital technology also can enable new forms of entrepreneurial activity. Workers in small businesses and self-employed occupations can benefit from higher income earning opportunities. A new category of knowledge-enabled jobs will become possible as machines embed intelligence and knowledge that less-skilled workers can access with a little training. In India, for example, Google is rolling out the Internet Saathi (Friends of the Internet) programme in which rural women are trained to use the Internet, and then become local agents who provide services in their villages through Internet-enabled devices. The services include working as local distributors for telecom products (phones, SIM cards, and data packs), field data collectors for research agencies, financial-services agents, and paratechnicians who help local people access government schemes and benefits through an Internet-based device.


How to positively affect the future of work: solution spaces

The disruptions to the world of work that digital technologies are likely to bring about could pose significant challenges to policy makers and business leaders, as well as workers. There are several solution spaces to consider:

Evolve education systems and learning for a changed workplace. Policy makers working with education providers (traditional and nontraditional) could do more to improve basic STEM skills through the school systems, put a new emphasis on creativity as well as critical and systems thinking, and foster adaptive and life-long learning.

Determine how the private sector can drive training. Companies face gaps in skills they need in a more technology-enabled workplace. They could benefit from playing a more active role in education and training, including providing better information about needs to learners and the education and training ecosystem, and proving better learning opportunities themselves.

Create incentives for private-sector investment to treat human capital like other capital. Through tax benefits and other incentives, policy makers can encourage companies to invest in human capital, including job creation, learning and capability building, and wage growth.

Explore public-private partnerships to stimulate investment in enabling infrastructure. The lack of digital infrastructure is holding back digital benefits in many economies, both developing and developed; public-private partnerships could help address market failures.

Rethink incomes. If automation (full or partial) does result in a significant reduction in employment or greater pressure on wages, some ideas such as universal basic income, conditional transfers, and adapted social safety nets could be considered and tested.

Rethink transition support and safety nets for workers affected. As work evolves at higher rates of change between sectors, locations, activities, and skill requirements, many workers will need assistance adjusting. Many best-practice approaches to transition safety nets are available and should be adopted and adapted, and new approaches considered and tested.

Embrace technology-enabled solutions. Such solutions, including richer information signals, can be used in the labour market to improve matching and access and bridge skills gaps. Policy makers will need to address issues such as benefits and variability that these digital platforms can raise.

Focus on job creation. Accelerate the creation of jobs in general through stimulating investment in businesses, and accelerate the creation of digital jobs in particular—and digitally enabled opportunities to earn income—including through new forms of entrepreneurship.

Innovate how humans work alongside machines. Greater interaction will raise productivity but require different and often higher skills, new technology interfaces, different wage models in some cases, and different types of investments by businesses and workers to acquire skills.

Capture the productivity benefits of technology. These can be harnessed to create the economic growth, surpluses, and demand for work that create room for creative solutions and ultimately benefit all.

Migrants in search for a better tomorrow. 

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