Results from the survey provide a picture of how businesses expect several macrotrends to impact their operations. Trends ranging from technology adoption to macroeconomic and geopolitical outlook, the green transition, demographics and consumer preferences are expected to drive industry transformation in the next five years.
As illustrated in Figure 2.1, businesses identify increased adoption of new and frontier technologies and broadening digital access as the trends which are most likely to drive transformation in their organization, these are expected to drive trends in over 85% of the organizations surveyed. Broader application of Environmental, Social and Governance (ESG) standards within their organizations will also have a significant impact. The next most-impactful trends are macroeconomic: the rising cost of living and slow economic growth. The impact of investments to drive the green transition was judged to be the sixth-most impactful macrotrend. Supply shortages and consumer expectations around social and environmental issues follow next. Though still expected to drive the transformation of almost half of companies in the next five years, the ongoing impact of the COVID-19 pandemic, increased geopolitical divisions and demographic dividends in developing and emerging economies were placed lower as drivers of business evolution by respondents.
Employers also forecast the expected impact of these macrotrends on employment within their organizations. Figure 2.2 suggests that employers expect most of the disruptions to have a net positive effect on employment, with most macrotrends expected to drive net job growth.
Among the macrotrends listed, businesses predict the strongest net job-creation effect to be driven by investments that facilitate the green transition of businesses, the broader application of ESG standards and supply chains becoming more localized, albeit with job growth offset by partial job displacement in each case. Climate change adaptation and the demographic dividend in developing and emerging economies also rate high as net job creators.
Technological advancement through increased adoption of new and frontier technologies and increased digital access – the two macrotrends judged by businesses to be most impactful on their organization in the next five years – are also expected to drive job growth in more than half of surveyed companies. However, this is offset by expected job displacement in one-fifth of companies, with the remaining respondents expecting the impact on employment to be roughly neutral. The net job creation effect places these two trends in 6th and 8th place respectively. The last section of this chapter will probe which specific technologies businesses expect to drive the reconfiguration of labour markets.
The three key drivers of expected net job destruction are forecast to be slower economic growth, supply shortages and the rising cost of inputs, and the rising cost of living for consumers. Employers also recognize that increased geopolitical divisions and the ongoing impact of the COVID-19 pandemic will drive labour-market disruption, with an even split between employers expecting these to have a positive and negative impact on jobs.
The following sections now briefly explore three facets of this picture more closely: growth and inflation, changing economic geographies and the green transition.
At the beginning of 2023, the global economic situation was shaped by a combination of vulnerabilities that caused high global inflation at 8.8% in 2022 – above the pre-pandemic level of 3.5% – and slowed economic growth which the IMF forecasts to be 2.9% in 2023, below the long-term average of 3.8%.35 These vulnerabilities include the monetary and fiscal expansion that eased pressure during pandemic lockdowns but enabled higher inflation, exacerbated by higher food and gas prices resulting from geopolitical tensions and Russia’s invasion of Ukraine. Several central banks have taken measures to counteract these trends by increasing interest rates.
Over the 2023–2027 period, employers expect these precarious economic conditions to continue to impact their business: as previously noted, three quarters of respondents expect the rising cost of living and slower economic growth to drive transformation in their organizations in the next five years. Of the 10 economies with the highest proportion of businesses expecting the rising cost-of-living to drive transformation, five are from the MENA region. The countries most concerned by slower economic growth are more distributed, with three of the top 10 (including three of the top four) countries from East Asia and the Pacific, with the remaining seven countries split between MENA and Europe.
Against this backdrop, survey respondents expect economic challenges to be the greatest threat to the job market in the next five years, with slower global economic growth, supply shortages and rising costs, and the rising cost-of-living all expected to significantly displace jobs (Figure 2.2). This prediction is more pronounced in the Agricultural and Natural Resources, Manufacturing, and Supply Chain and Transportation industries, where the net decline (the fraction of respondents expecting job decline minus those expecting growth) is almost 40%. Conversely, the Care, Personal Services and Wellbeing and Government and Public Sector industries expect little impact on jobs from these trends. Organizations operating in Latin America expect to be hit hardest by these trends, with net job decline expectations of around 40%, compared to a lower impact of around 25% in Europe and South Asia.
Driven by economic, environmental and geopolitical trends, the world economy is undergoing a structural transformation which challenges the traditional drivers of globalization, with diverging outcomes.36 Though factors such as climate change call for integrated global policy-making and international cooperation, disruptions such as threats to the resilience of value chains due to COVID-19 and geopolitical conflict may make doing business locally more attractive than relying on the stability of international partners.
By comparing how Future of Jobs survey respondents who operate globally (in five or more countries) expect global trends to impact their business to expectations of those who have a single base of operations, this report finds that there are no significant differences between these groups.
These global trends have led to businesses considering ways to enhance resilience in their supply chains, through “nearshoring”, “friendshoring”37 and other ways to distribute risk (e.g. China+1 strategy among multinational firms – whereby they maintain production bases in China while diversifying suppliers to other countries). This possible supply-chain restructuring is particularly relevant in East Asia, which could see benefits from diversification away from China, but equally could see potential reduced demand from European and North American businesses moving supply chains closer to the operation bases.
This report analyses these developments by assessing three macrotrends related to inter-country dynamics and supply chains: increased geopolitical tensions, localization of supply chains, and supply-chain shortages’ impact on organizations’ transformation. Figure 2.3 shows that East Asian countries dominate the top 10 countries for expectations that these trends will drive transformation.
Respondents have differing expectations of the impact these three trends will have on jobs, with mixed opinions (net neutral) on the impact of increased geopolitical divisions, strongly positive expectations for supply chains becoming more localized and strongly negative expectations for supply shortages and rising input costs. With East Asian countries expecting the greatest impact on business transformation from these trends, this region can also expect significant job disruption from changing supply chains and geopolitical tensions in the coming years.
To meet the goals of the Paris Agreement – a pledge to keep global temperature rises below 2ºC and pursue efforts to limit them to 1.5ºC – large-scale global action towards a green transition is ongoing and expected to accelerate. While transitioning to a green economy will disrupt labour markets over the next decade it will also create significant new job opportunities.
The data in this report shows that investments in the green transition, broader application of ESG standards and climate-change adaptation are expected to have strong positive impacts on job creation (Figure 2.3). A deeper examination of the data reveals that job creation will be pronounced in the Energy and Materials and Infrastructure sectors, where roughly 10% more companies expect job creation as a result of these effects. Regarding the application of ESG standards, organizations operating in Sub-Saharan Africa have the highest net expectations for job growth (an excess of 64% of companies expecting job growth less those expecting job decline), well ahead of the lowest-ranking region (Europe at 50%). Regarding investments in the green transition, regional expectations are more aligned, with organizations operating in Sub-Saharan Africa most optimistic (60%), and Central Asia in last place (53%).
In the next five years, these trends are likely to drive job growth through both public and private investments. Since the beginning of the pandemic $1.8 trillion has been spent globally on green stimulus, compared to $650 billion (inflation-adjusted) in response to the 2008 financial crisis.38 Examples of some of these public investment programmes include China’s Carbon Neutrality pledge, the European Green Deal Investment Plan and the United States’ recent Inflation Reduction Act. Similarly, businesses are driving the green transition forward, through their own and joint initiatives. Studies show that investments in renewable energy and energy efficiency often generate more employment in the near term than investments in fossil fuels, but work remains to improve job quality and wages as well as to support workers in carbon-intensive industries.39
Demand for green jobs is growing quickly across sectors and industries. According to a recent estimate by the International Energy Agency (IEA), a green-recovery scenario could lead to close to 3.5% of additional GDP growth globally, as well as a net employment impact of 9 million new jobs created each year.40 Globally, the green transition could create 30 million jobs in clean energy, efficiency and low-emissions technologies by 2030.41 By 2030 the transition to a nature-positive economy in China alone is expected to add $1.9 trillion to the country’s economic worth and generate 88 million new jobs.42
The Fourth Industrial Revolution has accelerated the pace of adoption of technologies and shifted the frontier between humans and machines across sectors and geographies. Technology is altering the way we work, but also changing job content, skills in need, and which jobs are being displaced.43 Understanding how technologies will impact labour markets is crucial for determining whether people will be able to transition from declining occupations to the jobs of tomorrow.44
Future of Jobs Survey results highlight expected future trends in technology adoption across industries. Figure 2.4 presents the technologies according to companies’ likelihood to adopt them by 2027. As in previous years, big data, cloud computing and AI feature near the top of this list, with approximately 75% of companies looking to adopt these technologies in the next five years. The data also shows the impact of the digitalization of commerce and trade, with platforms and apps likely to be adopted by 86% of companies and e-commerce and digital trade likely to be adopted by 75% of businesses. The second-ranked technology is education and workforce technologies, with 81% of companies looking to adopt this technology by 2027.
The Future of Jobs Survey also probes the expected impact of technology adoption on employment. Figure 2.5 shows that all but two technologies are expected to be net job creators in the next five years. Big data analytics, climate change and environmental management technologies, and encryption and cybersecurity are expected to be the biggest drivers of job growth. Agriculture technologies, digital platforms and apps, e-commerce and digital trade, and AI are all expected to result in significant labour-market disruption, with substantial proportions of companies forecasting job displacement in their organizations, offset by job growth elsewhere to result in a net positive. Generative AI has received particular attention recently, with claims that 19% of the workforce could have over 50% of their tasks automated by AI45 and job losses making headlines, while others expect the technology to enhance jobs.46 Only robots, whether humanoid or non-humanoid, are forecast to have a net negative overall impact on employment in our data, with roughly equal cohorts of companies expecting growth, displacement and neutral impact. The shares of oragnizations surveyed which forecast a neutral impact are not plotted.
While respondents operating in different industries show differing preferences for technologies, there are a few industries that show much higher overall expectations to adopt new technologies while some are more cautious. The Electronics and Chemical and Advanced Materials industries are planning to adopt more technologies than average, while the Employment Services, Insurance and Pension Management, and Real Estate industries are the least inclined to adopt new technologies.
Environmental management technology is one of the technologies with the most differentiated uptake across industries, with 93% of Oil and Gas employers expected to adopt the technology, followed by Chemical and Advanced Materials (88%) and Production of Consumer Goods (86%). In contrast, just 26% of Employment Services employers expect to adopt this technology, followed by Education and Training (36%) and Insurance and Pension Management (42%). Similarly, augmented and virtual reality is likely to be heavily adopted by organizations in Electronics (80%); Research, Design and Business Management services (77%); and Energy Technology and Utilities (75%) industries, compared to Mining and Metals (46%); Accommodation, Food and Leisure services (42%); and Agriculture, Forestry and Fishing (30%) industries. Sectoral data on technology adoption is also included in Appendix B.
Looking specifically at robots, Future of Jobs Survey data highlights the Electronics (83%), Energy Technology and Utilities (72%), and Consumer Goods (71%) industries as likely top adopters. Data from the International Federation of Robotics shows that the number of industrial robots per 10,000 workers has continued to rapidly increase over the last five years across countries.47 Industrial robot density has nearly doubled over the last five years, reaching 126 robots per 10,000 workers on average. Regarding robots’ impact on employment, the strongest sectoral picture emerges for the adoption of non-humanoid robots, wherein 60% of companies operating in the Production of Consumer Goods and the Oil and Gas industry foresee job displacement, and 60% of companies operating in Information and Technology services foresee job creation in the next five years.
As businesses adopt frontier technologies, tasks such as information and data processing are increasingly automated, reconfiguring labour markets and changing the skills needed for work. Previous editions of the Future of Jobs Report have documented the shifting frontier between the work tasks performed by humans and those performed by machines and algorithms. We do so again this year.
The human-machine frontier has shifted since the 2020 edition, which was released in the midst of COVID-19 lockdowns and remote working, when expectations for increasing automation were high. The fraction of automated tasks has increased less than previously expected, and the horizon for future automation is stretching further into the future than surveyed businesses previously anticipated.
Organizations today estimate that 34% of all business-related tasks are performed by machines, with the remaining 66% performed by humans. This represents a negligible 1% increase on the level of automation estimated by respondents to the 2020 edition of the Future of Jobs Survey, suggesting that augmentation rather than automation has taken place in this period. This pace of automation contradicts expectations from respondents to the 2020 survey that almost half of business tasks would be automated in the following five years. Overall, relative to 2020, employers have revised their predictions for future automation down by 5% (from 47% automation by 2025 in 2020 to 42% automation by 2027 now). Task automation in 2027 is expected to vary from 35% of reasoning and decision-making to 65% of information and data processing (see Figure 2.6).
The potential scope of automation and augmentation will further expand over the next few years, with AI techniques maturing and finding mainstream application across sectors. It remains to be seen how technologies going through the most rapid changes, such as generative AI technology, may further change the make-up of automatable tasks over the 2023–2027 period, with some recent studies finding that Large Language Models can already automate 15% of tasks. When combined with applications which can correct known issues with existing Large Language Models (such as factual inaccuracies), this share may increase to 50%.48