Future of Work
April 1, 2021
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Humanity continues to embark on a period of unparalleled technological advancement. The next 5, 10 and 20 years will present both significant challenges and opportunities. Private sectors, governments, academics and entrepreneurs are all seeking the roadmap for navigating these profound changes in the world of work. Such a road map must be created collaboratively by all stakeholders.
"At its core, an industrial revolution can be characterized by advancements in technology that humanity applies to improve the process of production. But in reality, it means so much more.
The first three industrial revolutions brought to the world water and steam power, electricity and digitization. With every industrial revolution comes refining shifts to social, economic, environmental and political systems that truly alter the course of humanity. Some of these shifts are foreseen, and others are completely unforeseen. ”
Today, a fourth industrial revolution unfolds. The Fourth Industrial Revolution is bringing technologies that blur the lines between the physical, digital and biological spheres across all sectors. Technologies like artificial intelligence (AI), nanotechnology, quantum computing, synthetic biology and robotics will all drastically supersede any digital progress made in the past 60 years and create realities that we previously thought to be unthinkable. Such profound realities will disrupt and change the business model of each and every industry
One of the most immediate and impactful outcomes of technological evolution is the vast advancement in automation. Every day, more manual processes become automated, and as technology continues to accelerate, so will automation.
As a result, the world of work and labor market demand are rapidly changing. According to McKinsey, up to 375 million workers may need to change their occupational category by 2030, and digital work could contribute $2.7 trillion to global GDP by 2025. Faced with the scale of the unstoppable shifts in workforce demands, we must address the challenges associated with workforce transformation, starting by taking an in-depth look at its impact on the world of work. Four key impact areas should be considered:
For most global industries (e.g., logistics, financial, manufacturing, aerospace, etc.), advancements in AI, robotics, 3D printing and the internet of things will put a great deal of pressure on companies to automate in order to remain competitive in a global landscape. This will require companies to have a solid understanding of the way these technologies impact their industries and how they can ensure organizational agility to adapt to these changes. Increased global competitiveness will accelerate cost pressure, which will lead to substantial downsizing or reassignment of a large contingent of workers. McKinsey estimates that up to 800 million individuals may be displaced by automation by 2030.
There are four factors of production that fuel economic growth: land, labor, capital and enterprise. Today, the world is attaining only 52% of its entrepreneurial capacity, and this number is declining year over year. Large, established enterprises have a significant advantage in the future of work than smaller companies due to their ability to adapt to technological changes. However, this is not a recipe for long-term, sustainable economic success. The world must focus on supporting independent entrepreneurs, as small and midsize businesses are the fuel of most economies of the world today.
Technology will continue to change societal values. Today, more than 36% of the U.S. workforce are freelancers for reasons including autonomy, flexibility and extra income. Co-working spaces are exploding in popularity and are often fully subscribed before opening their doors. Technology has enabled people to work anytime, anywhere. By 2027, more than half of American workers will be freelancing.
Part-and-parcel with economic development is one’s ability to access training for employment. Naturally, tectonic shifts are happening in the education space. Students are less interested in stale curriculums and keener to take shorter, skills-based training that is more relevant to today's workplace. Employers are focusing on the skills required to achieve their business objectives and remain competitive and agile, which requires them to ensure their employees the necessary training to fill these skills gaps. Workers, naturally, need to acquire skills “on demand” to adapt to their changing roles and responsibilities.
Despite the challenges we face, we also possess an unprecedented possibility to apply an abundance mindset to solving the challenges. The Fourth Industrial Revolution will provide us with an opportunity to learn and teach new skills, build new jobs requiring unique skills combinations that don’t exist today, explore talent that we didn’t know about and, in doing so, grow our businesses and create a new generation of workers that are highly skilled in more diverse areas. The question is, how do we get there?
Collaborations among the private sector, academia and policymakers will be essential to navigate the future of work as we go through these profound moments. Schools need to work with businesses and the public sector to develop on-demand, relevant, adaptable curriculums and focus on teaching skills; governments need to utilize advanced technologies to generate real-time and predictive insights on the labor market in order to develop sound policies, programming and budgets; companies need to hire for competencies over credentials and, more importantly, take the lead in supporting existing workforces’ upskilling and lifelong learning.
Let’s prepare ourselves for this next transition with an abundance mindset and create a future of work that is prosperous for all.