World Economy

Automation may wipe out 1/3 of global workforce by 2030

According to a recent report by the private-sector think tank McKinsey Global Institute (MGI) entitled “Jobs Lost, Jobs Gained: Workforce Transitions in a Time of Automation”, over 1/3 of activities could become automated for about 60% of occupations, with more workers displaced in advanced (i.e. The USA and much of Europe, including the UK and Germany) than emerging economies.

The bulk of those displaced will have been doing what McKinsey terms “predictable physical” labour, and since the new jobs that are created will, the report says, “require social and emotional skills, creativity, [and] high-level cognitive capabilities,” there is likely to be severe stress on existing educational and job-training systems.

The report elaborates: “The potential impact of automation on employment varies by occupation and sector. Activities most susceptible to automation include physical ones in predictable environments, such as operating machinery and preparing fast food. Collecting and processing data are two other categories of activity that can increasingly be done better and faster with machines. This could displace large amounts of labor, for instance in mortgage origination, paralegal work, accounting, and back-office transaction processing.”

Furthermore…

“Across all countries, the categories with the highest percentage job growth net of automation include health-care 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; and “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 will also grow, particularly in the step-up scenario that involves higher investment in infrastructure and buildings. Manual and service jobs in unpredictable environments will also grow, such as home health aides and gardeners.”

It should be noted that this is by no means an all “gloom and doom” scenario, since technicological advancement does have an overall tendency to increase the total requirement for jobs.

However the observation is made that “There are few precedents in which societies have successfully retrained such large numbers of people.” And this is the key question: how do you retrain people in their 30s, 40s and 50s for entirely new careers?

The implication is that potentially over one third of the US and European workforce could be seeking new employment.

As usual such a scenario has major implications for the poorer strata of society, that is in addition to society as a whole. It is vitally important that training systems react as early as possible to the likely forthcoming trend.

The full 160 page MGI report can be downloaded from the following link: Jobs Lost, Jobs Gained.