The Fourth Industrial Revolution is upon us. How will it affect our jobs?
The economist John Maynard Keynes predicted that by 2030 we would only work three hours a day because machines would be doing our jobs for us. However, he also recognised that work gives our lives meaning and brings stability to societies. So the question above is much bigger than “are we going to be unemployed?” It’s also about how technological progress will revolutionize the world of work.
Meanwhile, we are living longer, healthier lives, which – with the spending power of those over the age of 60 expected to rise to $15 trillion by 2020 - is an opportunity for economies.
This is a topic we have already explored on our blog platform Agenda.
This explainer, for example, asks – what is the future of work? It reads:
“In many countries there has been a drop in unemployment numbers since the global financial crisis, but there is some evidence that this is not so much due to jobs growth as because the long-term unemployed are giving up on trying to find a job.
“Technology is changing industries at a rapid pace and the labour market is therefore entering a period of uncertainty. Managing this transition is an important challenge, as is preparing for the future beyond an expected increase in automation…
“…The types of skills that employers need are changing all the time. Employees are under pressure to continually learn and adapt to evolving and emerging industries. As technology further reshapes business needs, both individuals and countries will have to address ongoing skills gaps.Traditional education is often badly equipped to develop dynamic skills in students. Most schools and universities are teaching a 20th-century education to young people who will need cutting-edge 21st-century skills. This is an issue that calls for long-term commitment to reform from successive generations of political leaders.”
So what’s the solution?
Allen Blue, co-founder of LinkedIn, wrote recently on Agenda that:
“Many members of the global workforce can’t keep up with the shift in skills required for jobs, which are seen by some as part of the evolving Fourth Industrial Revolution. However, the increasing availability of data about labour supply and demand and the economy more broadly can help policymakers, employers, educators, and members of the workforce react quickly and effectively to changes in demand for skills and collectively increase economic opportunity worldwide.”
A recent publication by the Forum – The Future of Jobs report – also sets out possible solutions to this major disruption in the labour market. “The skill sets required in both old and new occupations will change in most industries and transform how and where people work. It may also affect female and male workers differently and transform the dynamics of the industry gender gap,” it reads.
Here’s a graphic showing a timeframe of when various industries will be affected:
Some countries – both developed and developing – will feel the effects more keenly
And while some industries will witness a decline, others will see a boost.
In just five years’ time, the skills that are most highly valued today may not be quite as important, and vice versa. So, what are the skills you need to thrive in the Fourth Industrial Revolution?
This session will aim to answer two questions, says moderator Hiroko Kuniya:
Artificial Intelligence is already replacing workers in some areas, says Dileep George. It is not a question of whether it will happen; it is a question of when. Breakthroughs are unpredictable, but we’re not far away from AI that can think and act like a human.
There is no economic law which says that everyone is going to benefit, says Erik Brynjolfsson. It’s possible that some people will emerge from these breakthroughs way ahead, while others will be left behind. Throughout most of history, a rising tide lifted most boats, but in the past 20 years we’ve seen a “great decoupling”; continued growth and productivity, record GDP numbers and more millionaires than ever, accompanied by median incomes that are lower now in the US and other countries than there were in the late 1990s.
This is partly because technological progress can be biased towards social groups, entrepreneurs, or another system or corner of society.
Nobel economist Christopher Pissarides makes the case for new policies to redistribute wealth and favour those who have been left behind, without taking away the incentive to work. “Redistribution is not a dirty word,” he says.
There are also sectors that will never be able to automate, such as nurses, and those in the leisure industry. “You don’t want to sit in a restaurant and be served by a robot, or cooked for by a robot,” he adds.
Could businesses enter into a vicious cycle of automation, Hiroko Kuniya asks. Troels Lund Poulsen, Denmark’s Minister for Business and Growth, says automation doesn’t just have to be negative. Danish companies have shown that it can be effective at creating – even exporting - jobs.
There is no question that old jobs are being automated, says Brynjolfsson. But this should be seen as a good thing, as it replaces routine tasks. Teaching new skills and creating new types of jobs will mean people are doing productive work, which – along with R&D, education and entrepreneurship – is preferable to the introduction of basic income and similar measures.
Where in the labour market might we see areas of growth?
In services, argues Pissarides. These will be labour intensive jobs but they will require better communication skills. There will also be jobs in entrepreneurship, as this is what creates jobs. This is an area where Europe lags behind the US, and needs to catch up.
The panel seems to agree that entrepreneurship will be key to job creation, but can it create enough to cope with the numbers who are being replaced by machines (47% of American workers according to one Oxford University study)?
Dileep George believes machines will soon be doing our jobs, and doing them better than us because they won’t get tired. But people will always be coming up with new technologies, and this will create new careers. He cites the example of television, which few people could have dreamt of before it’s invention, and now it’s a huge industry.
George also suggests that, one day, our work and income could become detached from one another.
Brynjolfsson agrees that machines will soon be able to do almost anything – but it’s a long way off. The immediate challenge, he argues, is not that all jobs are being automated; it’s that some of them are, and these people are being pushed out as their skills are no longer valuable. This leads to inequality.
But there are some things, of course, that computers can’t do. They can’t deliver an inspiring speech, for example, or carry out creative tasks like writing a novel, starting a successful business or making a scientific breakthrough. Complex, unstructured problem solving is beyond them, so let them sit in a room and count while we learn different skills.
Should we slow the pace of innovation, and would this give us more control?
Easier said than done, says Dileep George.
Finally, Brynjolfsson points out that it’s important to remember that the future of work does not just have to benefit the few, and shame on us if we think rising wealth is a bad thing – as long as we distribute this wealth fairly.
Governments have a role to play here, including moving out of the way of innovation, argues Fujimori. They should accelerate, not slow down, the arrival of these new technologies, because they are creating jobs.
The other role of government, of course, is to spread prosperity throughout all levels of society.
Good morning, and welcome to the fourth and final day of our Annual Meeting in Davos.
Among today's sessions, we have The Global Economic Outlook with IMF Managing Director Christine Lagarde and British Finance Minister George Osborne. Then a little later we're looking at the top science trends for 2016, and what we can do to preseve our humanity in an age of technology.
While you wait for today's sessions to begin, why not look back at what happened yesterday.
Troels Lund Poulsen