According to a new report from the Brookings Institution, “Employment has shifted from the career, to the job, to the task.” In the report, Jerry Davis, a professor at the University of Michigan’s Ross School of Business, asserts that jobs will vanish because advances in information and communication technologies have given rise to the “gig economy.”1
The most obvious example of the gig economy is Uber, which roughly doubled its number of drivers in the 9 months from December 2014 to September 2015. Those 327,000 drivers, however, are not employees but independent contractors; Uber’s salaried workforce consists of only about 2,000 employees.
As Davis points out, “There is now an Uber for almost any personal service you can imagine . . . from package pickup and mailing to housecleaning and house calls by physicians. . . . When smartphones are ubiquitous, Uberization has the prospect of turning the world into a Home Depot parking lot,” where independent workers are hired by the day for construction projects.
Davis sees this model applied to all types of jobs: “From the provision of medical care to college lectures, a wide range of activities currently classified as ‘jobs’ could easily become ‘tasks’ paid on a piece rate.”
Many other pundits agree:
- According to Gartner research director Peter Sondergaard, “Gartner predicts one in three jobs will be converted to software, robots, and smart machines by 2025. New digital businesses require less labor; machines will make sense of data faster than humans can.”2
- The Oxford Martin Program on the Impacts of Future Technology predicts that, “Nearly half of U.S. jobs could be susceptible to computerization over the next two decades.”3
- A study by McKinsey & Co. concludes that, “[O]ur research suggests that as many as 45 percent of the activities individuals are paid to perform can be automated by adapting currently demonstrated technologies. . . . In the United States, these activities represent about $2 trillion in annual wages.” The authors add, “Although we often think of automation primarily affecting low-skill, low-wage roles, we discovered that even the highest-paid occupations in the economy, such as financial managers, physicians, and senior executives, including CEOs, have a significant amount of activity that can be automated.”4
All of this leads to the inescapable conclusion that networked intelligence, smart machines, and robotics are destroying jobs and hurtling the economy toward a future in which unemployment will be rampant.
Fortunately, that bleak scenario is unlikely to become reality. What most observers omit from their visions of the future is the potential for technology and automation to create new jobs to replace those that will be obliterated.
Among the proponents of this more optimistic outlook is Robert Cohen, a senior fellow at the Economic Strategy Institute. Cohen argues that even as automation takes over many manufacturing jobs, companies are responding by adding new jobs in services.5
In addition, all of the Big Data that sensors are capturing from the Internet of Things are creating a demand for human analysts who can interpret that data and take actions as a result. In all, he estimates that 25 million new jobs will be created. Thus, subtracting the jobs lost to automation leaves a net gain of 15 million jobs.
During his presentation at the Internet of Things Summit in Boston in September 2015, Cohen pointed out that while driverless cars will reduce the need for emergency response jobs, the massive buildout of the driverless car infrastructure will create enormous demand for construction workers with technical skills, along with jobs in sensor system management, installation, and sales.
Across industries, even companies that are not currently considered technology firms are developing new products and services to exploit the potential of the Internet of Things.
For example, Cohen notes that automobile manufacturer Ford has set up an alliance with Amazon and Wink to enable its cars to communicate with the systems in drivers’ homes. This will enable users to monitor their home security systems, adjust the lighting, and control the thermostat as they drive.
That’s just one example among many; aircraft manufacturers, banks, insurance firms, hospitals, and pharmaceutical companies are all accelerating the integration of technologies based on sensors, smart machines, and Big Data into their business models.
This means that computer programmers, data analysts, and people who develop or install sensors and robots will be in high demand over the next two decades. So will people who have (or can quickly develop) the skill sets to perform the managerial, marketing, manufacturing, cybersecurity, and support jobs that will be needed as the technologies evolve and become more integrated into people’s daily lives.
People who lack college degrees aren’t doomed to unemployment, according to Cohen. He believes that community colleges, technical schools, and nonprofit organizations will help people learn how to work with the new technology and become valuable contributors that will be coveted by employers.
As this trend accelerates, we foresee the following developments:
First, as we’ve pointed out in previous issues, robots and other technologies won’t make human workers obsolete; instead of replacing people with machines and software, companies will pair humans and technology in combinations that will be more productive than either would be alone.
This will create new kinds of jobs that haven’t existed, as well as new business models that will enable people to do old jobs in new ways. In a post on Tech Crunch, Alastair Bathgate, CEO of robotic process automation software provider Blue Prism, echoes this assessment: “What many may consider a race against the machines is more realistically going to play out as a relay race?with teams comprised of both a human and virtual workforce seamlessly working together on assigned tasks for which they are ideally and respectively suited to complete an end goal, be it building a car, processing a payment, or deploying a service. Ultimately the benefit will be to the humans, who can eliminate rote, mundane tasks from their daily routines in favor of more engaging and thought-provoking tasks.”6
Second, many jobs will remain immune to automation even as the new technologies continue to advance.
People who are skilled in creativity and understanding people’s emotions have nothing to fear; there are no technologies on the horizon that pose a threat to their jobs. As software, robots, and sensors take over the more routine and mechanical aspects of today’s occupations, employees and professionals will increasingly migrate to the more creative, emotionally sensitive parts of their jobs.
According to McKinsey, “Financial advisors, for example, might spend less time analyzing clients’ financial situations, and more time understanding their needs and explaining creative options. Interior designers could spend less time taking measurements, developing illustrations, and ordering materials, and more time developing innovative design concepts based on clients’ desires.”7
Third, jobs in the healthcare industry will also evolve, with technology taking over many tasks traditionally handled by physicians and lab technicians.
In India, machines at Thyrocare Technologies Ltd. already process more than 100,000 blood tests per day, with results delivered to the patient by the next day. Robots can perform medical procedures more precisely than human surgeons. Artificial intelligence can outperform doctors at diagnosing diseases and other medical conditions based on recognizing patterns of symptoms. Best of all, unlike human doctors, machines don’t need decades of training to develop their skills; and unlike human doctors who retire 40 years after completing their medical training, the knowledge that technology develops is never lost, but continues to grow infinitely.8
References 1. To access the report “Capital Markets and Job Creation in the 21st Century,” visit the Bookings Institution website at: http://www.brookings.edu/research/papers/2015/12/30-21st-century-job-creation-davis2. ComputerWorld, October 6, 2014, “One in Three Jobs Will Be Taken by Software or Robots by 2025,” by Patrick Thibodeau. ⓒ 2014 Computerworld, Inc. All rights reserved. http://www.computerworld.com/article/2691607/one-in-three-jobs-will-be-taken-by-software-or-robots-by-2025.html3. To download the report “Technology at Work v2.0: The Future Is Not What It Used to Be,” visit the Oxford Martin School website at: http://www.oxfordmartin.ox.ac.uk/publications/view/20924. To access the report “Four Fundamentals of Workplace Automation,” visit the McKinsey & Company website at: http://www.mckinsey.com/business-functions/business-technology/our-insights/four-fundamentals-of-workplace-automation5. Fortune, January 15, 2016, “25 Million New Jobs Coming to America, Thanks to Technology,” by Rick Wartzman. ⓒ 2016 Time Inc. All rights reserved. http://fortune.com/2016/01/15/new-jobs-technology/6. TechCrunch, January 15, 2016, “Will Robots Save the Future of Work?” by Alastair Bathgate. ⓒ 2016 AOL Inc. All rights reserved. http://techcrunch.com/2016/01/15/will-robots-save-the-future-of-work/7. To access the report “Four Fundamentals of Workplace Automation,” visit the McKinsey & Company website at: http://www.mckinsey.com/business-functions/business-technology/our-insights/four-fundamentals-of-workplace-automation8. Queensland University of Technology, January 18, 2016 “Digital Diagnosis: Intelligent Machines Do a Better Job than Humans,” by Ross Crawford, Anjali Jaiprakesh, and Jonathan Roberts. ⓒ 2016 Queensland University of Technology. All rights reserved. http://blogs.qut.edu.au/science-engineering-education-research/2016/01/18/digital-diagnosis-intelligent-machines-do-a-better-job-than-humans/
