Job Growth Created by Technology
We recently wrote about the future of job automation, which led us to an interesting study by McKinsey Global Institute, Jobs lost, jobs gained: Workforce transitions in a time of automation. Technology has improved our lives and increased our productivity, but these advancements also come at the cost of jobs in some sectors. Their key finding is that there should be enough work to maintain full employment levels through 2030, yet the transitions will be difficult, potentially more so than the transitions from agriculture, and later, manufacturing.
In the report, McKinsey mentions, “That even when some tasks are automated, employment in those occupations may not decline but rather workers may perform new tasks. Automation will have a lesser effect on jobs that involve managing people, applying expertise, and social interactions, where machines are unable to match human performance for now.”
It’s easier to assess which jobs can be automated and where displacement could happen than it is to predict what new jobs will be created and the opportunities that will exist. In fact, the idea that there will not be enough jobs for people is not supported by history. Labor markets adjust to the ebbs and flows of employment. To that end, we’ll look at one specific area of the report, the possible scenarios for employment growth.
Rising incomes and consumption, especially in emerging economies
McKinsey has predicted that global consumption will rise by more than $20 trillion by 2030. The majority of this growth will come in developing countries, but the impact will be broader than their borders. In fact, this growth could create as many as 250 million jobs.
As baby boomers age, so does their spending patterns. By 2030 there will be more than 300 million more seniors (65 and older) then there were in 2014. Even with advances in automation, the healthcare field is still predicted to grow by 50 million or more.
Development and deployment of technology
Technology creation, implementation, and management still requires human capital. This field is not as large as others, but it is a high paying field that is expected to grow by as many as 50 million new jobs by 2030.
Investments in infrastructure and buildings
As we’ve seen recently, our infrastructure is aging and requires not only more investment, but continuous investment. Housing shortages will also need to be addressed, and with professions including architects, engineers, electricians, carpenters, among others impacted, there could be 80 million or more new jobs created.
Investments in renewable energy, energy efficiency, and climate adaptation
With alternative fuels like solar and wind receiving more investment and technology creating new energy efficient solutions, the outlook is for 10 million new jobs over the coming decade.
‘Marketization’ of previously unpaid domestic work
Services industries primarily in the domestic arena could become marketized globally to the tune of 50 million or more newly paying jobs. While considered standard in developed countries, many people in developing nations who work in childcare, early childhood education, cleaning, cooking, gardening, and similar roles are unpaid.
In looking at these six areas for employment growth opportunities, the report calls out the following categories with the highest percentage of job growth net of automation:
- healthcare providers
- professionals such as engineers, scientists, accountants, and analysts
- IT professionals and other technology specialists
- managers and executives, whose work cannot easily be replaced by machines
- educators, especially in emerging economies with young populations
- “creatives,” a small but growing category of artists, performers, and entertainers who will be in demand as rising incomes create more demand for leisure and recreation
- builders and related professions, particularly in the scenario that involves higher investments in infrastructure and buildings
- manual and service jobs in unpredictable environments, such as home-health aides and gardeners
We focused this post on areas that could see an uptick in jobs due to technology advancements. One caveat that we want to call out is the need for displaced workers to receive the skills and support they need to transition to new jobs. Per the report, “Providing job retraining and enabling individuals to learn marketable new skills throughout their lifetimes will be a central challenge for some countries over the next decade and beyond.”
It goes on to say, “The challenge for the next decades will be to create effective workforce retraining programs at scale. This could require actions by policy makers, business leaders, and educators, as well as individuals.” Business leaders have unique insights into what roles could evolve as they are on the front lines of technology innovation.
Some companies are already working with education providers to uplevel their employees skill sets. Other ideas include focusing on employee capabilities over degrees, or skills-oriented hiring, and apprenticeships that combine on-the-job training and formal education.
If you’re thinking about what needs you’ll have over the coming decade and a half, send us a note. Our retained executive recruiters at Sheer Velocity are on top of emerging trends and how technology innovation is affecting the employment landscape.