Skill shift: Automation and the future of the workforce PART I
Demand
for technological, social and emotional, and higher cognitive skills will rise
by 2030. How will workers and organizations adapt?
Skill shifts have accompanied the
introduction of new technologies in the workplace since at least the Industrial
Revolution, but adoption of automation and artificial intelligence (AI) will
mark an acceleration over the shifts of even the recent past. The need for some
skills, such as technological as well as social and emotional skills, will
rise, even as the demand for others, including physical and manual skills, will
fall. These changes will require workers everywhere to deepen their existing
skill sets or acquire new ones. Companies, too, will need to rethink how work
is organized within their organizations.
This briefing, part of
our ongoing research on the impact of technology on
the economy, business, and society, quantifies time spent on 25 core workplace
skills today and in the future for five European countries—France, Germany,
Italy, Spain, and the United Kingdom—and the United States and examines the
implications of those shifts.
1.
How will demand for workforce skills change with automation?
2.
Shifting skill requirements in five sectors
3.
How will organizations adapt?
4.
Building the workforce of the future
1. How will demand for workforce skills change with
automation?
Over the next ten to 15
years, the adoption of automation and AI technologies will transform the workplace as people increasingly interact with ever-smarter
machines. These technologies, and that human-machine interaction, will bring
numerous benefits in the form of higherproductivity, GDP
growth, improved corporate performance, and new prosperity, but they will also
change the skills required of human workers.
To measure skill shifts
from automation and AI, we modeled skill shifts going forward to 2030—and found
that they accelerated. While the demand for technological skills has been
growing since 2002, it will gather pace in the 2016 to 2030 period. The
increase in the need for social and emotional skills will similarly accelerate.
By contrast, the need for both basic cognitive skills and physical and manual
skills will decline.
All technological
skills, both advanced and basic, will see a substantial growth in demand.
Advanced technologies require people who understand how they work and can
innovate, develop, and adapt them. Our research suggests that through 2030, the
time spent using advanced technological skills will increase by 50 percent in
the United States and by 41 percent in Europe. We expect the fastest rise in
the need for advanced IT and programming skills, which could grow as much as 90
percent between 2016 and 2030. People with these skills will inevitably be a
minority. However, there is also a significant need for everyone to develop
basic digital skills for the new age of automation. We find that among 25 skills
we analyzed, basic digital skills are the second-fastest-growing category,
increasing by 69 percent in the United States and by 65 percent in Europe.
The need for finely
tuned social and emotional skills will rapidly grow. Accompanying the adoption
of advanced technologies into the workplace will be an increase in the need for
workers with finely tuned social and emotional skills—skills that machines are
a long way from mastering. In aggregate, between 2016 and 2030, demand for
social and emotional skills will grow across all industries by 26 percent in
the United States and by 22 percent in Europe. While some of these skills, such
as empathy, are innate, others, such as advanced communication, can be honed
and taught. The rise in demand for entrepreneurship and initiative taking will
be the fastest growing in this category, with a 33 percent increase in the
United States and a 32 percent rise in Europe. The need for leadership and
managing others will also grow strongly.
There will be a shift
in demand toward higher cognitive skills. Our research also finds a shift from
activities that require only basic cognitive skills to those that use higher
cognitive skills. Demand for higher cognitive skills, such as creativity,
critical thinking, decision making, and complex information processing, will
grow through 2030, by 19 percent in the United States and by 14 percent in
Europe, from sizable bases today. However, work activities that require only
basic cognitive skills, such as basic literacy and numeracy, will decline as
automation advances. Basic data-input and -processing skills will be
particularly affected by automation, falling by 19 percent in the United States
and by 23 percent in Europe in the 2016 to 2030 period. The decline will be in
nearly all sectors as machines increasingly take over straightforward
data-input tasks.
The need for most
physical and manual skills will decline, but they will remain the largest
category of workforce skills. The demand for physical and manual skills has
been declining for 15 to 20 years, and this decline will continue with
automation. Between 2016 and 2030, demand for these skills will fall by 11
percent overall in the United States and by 16 percent overall in Europe. The
mix of physical and manual skills required in occupations will change depending
on the extent to which work activities can be automated. For example, operating
vehicles or stocking and packaging products are more susceptible to automation
than are assisting patients in a hospital or some types of cleaning. Physical
and manual skills will nonetheless continue to be the single largest category
of skills (measured by time spent), shrinking from 31 percent of workers’ time
in 2016 to 25 percent in 2030 across the United States and Western Europe.
A survey of more than
3,000 C-suite executives in seven countries—Canada, France, Germany, Italy,
Spain, the United Kingdom, and the United States—that we conducted as part of
our research confirms our quantitative findings. Advanced IT and programming
skills are viewed as the most important skills needed in the next three years.
Higher cognitive skills and social and emotional skills will also be more in
demand, while the need for physical and manual skills, particularly for gross
motor skills and strength needed for occupations such as moving, machine
feeding, and warehouse packing, will likely decline. Executives also expect
declines in the need for basic cognitive skills, particularly the basic
data-input and -processing skills used by data-entry clerks and typists and in
a range of back-office functions.
Our survey shows that
the functions that are already the most automated are experiencing the largest
skill mismatches. These functions include data analytics; IT, mobile, and web
design; and research and development . This finding holds true across almost
all sectors, with the notable exception of manufacturing, in which skill
mismatches are expected to be largest in production and manufacturing
operations.
2. Shifting skill requirements in five sectors
We looked at skill
shifts in more detail in five sectors. This analysis highlights many
similarities in changing patterns of skills requirements but also some
variation. For example, while social and emotional skills will be in growing
demand across all five sectors, the need for basic cognitive skills will
decline in banking and manufacturing, stay flat in healthcare, and only fall
back slightly in retail.
Banking and insurance
Financial services have
been at the forefront of digital adoption, and the banking and insurance sector
is likely to see significantly shifting demand for skills through 2030. The
financial-services sector contains a range of potential uses for AI, especially
in forecasting risk and personalizing the marketing of products to customers.
The number of workers such as tellers, accountants, and brokerage clerks will
decline as automation is adopted. The need for a workforce that uses only basic
cognitive skills, such as data input and processing, basic literacy, and basic
numeracy, will likely decline, while the number of technology experts and other
professionals will grow, as will the number of occupations that require
customer interaction and management. This increase will drive strong growth in
the demand for social and emotional skills.
Energy and mining
Automation and AI are
enabling companies to tap into new reserves as well as increase extraction and
production efficiency. Predictable manual work and administrative jobs that
involve data manipulation, such as meter reading, will be susceptible to being
displaced, while demand for technological jobs will be buoyant. The demand for
physical and manual skills along with basic cognitive skills are expected to
decrease, while demand for higher cognitive, social and emotional, and
technological skills should grow.
Healthcare
Automation and AI will
change the interaction among patients and healthcare professionals. The demand
for care providers, such as nurses, will continue to see growth, while the
demand for office-support staff will see decreases because of automation of
tasks related to record keeping and administration.
Demand for advanced IT
skills, basic digital skills, entrepreneurship, and adaptability will see the
largest double-digit cumulative growth. However, demand for skills such as
inspecting and monitoring patient vitals and medical equipment will stagnate,
despite the overall growth in healthcare, as machines take over more routine
tasks.
Healthcare is the only
sector in our analysis in which the need for physical and manual skills will grow
in the years leading to 2030. This variation reflects the gross motor skills
and strength needed for occupations such as elder care and physical therapy and
the fine motor skills required of registered nurses.
Manufacturing
The next wave of
automation and AI in manufacturing will disrupt production functions in
factories through better analytics and increased human-machine collaboration.
It will also have an impact on product development and on marketing and sales.
The overall need for
physical and manual skills in the sector is decreasing at more than twice the
rate of that for the whole economy. The need for basic cognitive skills is also
declining as office support functions are automated. The number of
professionals such as sales representatives, engineers, managers, and
executives are expected to grow. This will lead to growth in the need for
social and emotional skills, especially advanced communication and negotiation,
leadership, management, and adaptability. The need for technological skills, both
advanced IT skills and basic digital skills, will increase as more technology
professionals are required. Demand for higher cognitive skills will grow,
driven by the need for greater creativity and complex information processing.
Retail
Smart automation and AI
will continue to reshape the revenue and margins of retailers as self-checkout
machines replace cashiers, robots restock shelves, machine learning improves
prediction of customer demand, and sensors help inventory management.
The share of predictable
manual jobs, such as driving, packing, and shelf stocking, will substantially
decline. Jobs that remain will tend to be concentrated in customer service,
management, and technology deployment and maintenance. Demand for all physical
and manual skills and for basic data input and processing will decline, while
growth will be strong in demand for interpersonal skills, creativity, and
empathy. Advanced IT skills and programming alongside complex information
processing skills will also see a surge in demand.
CONTINUES IN PART II
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