Further down the horizon the accelerating progresses in Artificial Intelligence (AI), machine learning and online retail, may trigger the disappearance of retail stores or even banking facilities within the next 30 years. What will the people who are currently working in retail and banking be doing?
With the advent of AI and machine learning, not even lawyers, accountants and teachers will be saved, as standard work tasks will be done by machines as they can be “trained” to learn repetitive tasks and improve on them, and do the work much faster and better than we humans can.
Anthony Goldbloom, a machine learning scientist, delivered an interesting talk on TED about “The jobs we will lose to machines and the ones we won’t.”
According to him, machines can excel at high volume frequent tasks, but will fail at novel situations as they cannot handle things they haven’t seen many times before. Machines can only learn from past data, humans don’t - they can connect different threads they have not seen before.
As a result, the future existence of any human jobs relies on one single question: ‘To what extent is that job reducible to high volume frequent tasks and to what extend does it face novel situations’.
On the same theme, as outlined in the table below, C. Frey and M. Osborne created an interesting probability table about a variety of jobs and their susceptibility to computerisation and the resulting job losses.
The Demographic and Socio-Economic challenge
In addition to technological changes, there are also major changes under way in the demographic and socio-economic environment. For example, the world economic forum forecasts that 44% of the demographic and socio-economic changes our society will experience in the coming 5 years will come from changes in the nature of work and the flexibility around work location.
The End of Jobs
A daunting title and not one I came up with first. Nor maybe
Taylor Pearson, who in his book also entitled "The End Of Jobs",
depicts the drivers that will most certainly lead to a significant
shortage of jobs. But more importantly, he also shares insights
in how people can build a less dependant future for themselves.
From my point of view, a number of trends, challenges and evolutions are impacting our society as we speak, which in turn will create not only a penury of jobs but more importantly maybe the end of jobs as we know them.
The Population Growth Challenge
Probably, one of the main reasons for the potential penury of jobs is the exponential growth of the population. Global population growth has outpaced job growth by 2.4 times since 2000 and this number is set to increase going forward.
Furthermore, the labour force participation rate, which represents the population between the age of 15 and 64, is lower than in the past since many of these people remain out of the labour force, partly as they gave up looking or engaging in regular work. Hence some of the unemployment figures look better than they should, as part of the people of working age are not counted anymore.
To prove the point, as show in the diagram below, the US has reached a 35 year low in labour force participation.
Corporations breath in and out – hire and fire as their economic performance demands. The reliance on employment and an environment that will deliver future employment and prosperity might be an ill guided and very fragile approach to life.
The new Dawn of Entrepreneurship
The current challenges our society currently faces also offers an upside for people who can be or dare to be more independent and who have the courage to free themselves from the slavery of employment and take charge of their own economic lives.
The biggest advantages the industrial revolution of today provides are, low entry barriers in regards to knowledge or information required, low capital requirements to start many types of business today and the possibility to work from almost anywhere as long one is connected.
Access to a global marketplace, economies of scale do not matter much in many areas anymore and the rise of billion dollar companies in just a few years shows that it is possible. Now not every enterprise needs to be a Unicorn as many VCs wish, but every size of business can be a rewarding undertaking compared to taking a mere salary at the mercy of others.
There is enough proof that we have reached a point in time where entrepreneurial opportunities are attainable more than ever before.
Never before have we seen so many government initiatives in regards to entrepreneurship and start-up support, across many of the developed countries at least, as we have seen in the past couple of years.
As long as governments believe in the importance of regulating and administrating a fertile economic environment, entrepreneurs and new business can strive. Companies will be much smaller, maybe, but will be made of stakeholders rather than employees.
It’s time to take a leap!
For example, decades ago, work force mobility was about people migrating within a country (due to urbanisation) or immigrating to another country to find more or better work. Foreign workers competed with the domestic talent available, typically on lower cost or for a premium where skill gaps existed.
But the immigration flow of low paid people will end one day as soon, as they are often better off at home as their home country’s economies and lifestyles improve.
In addition, there are clear signs that services are moving to lower cost countries, as their skills improve and migration won’t be required anymore. People can stay at home, get an overseas inflated pay and don’t even have to get out of their pyjamas.
The Economic Challenge
Most economies heavily affected by the 2008 financial crises have not really recovered to their previous levels. Inflated they might have been, but most advanced economies continue to struggle with economic growth and high unemployment is the consequence.
Especially hard hit are the young academics or graduates who largely indebted themselves to invest time and money to achieve a higher education and therefore better job prospects. But as the graph below shows, the recent statistic about the employment rates of European graduates in some countries leave a lot to desire.
In a number of countries with higher employment figures, the graduates may be forced to do jobs which actually would not require any academic qualification, hence the employment numbers are higher.
Since November 2004, the US population increased by a little more than 25 million people. During the same period, only about 7.2 million non-farm jobs were created. Since non-farm payrolls account for roughly 80% of all US jobs, we can assume that a total of 9 million jobs were created during the period.
This leaves a deficit of 16 million jobs!
The Technology Revolution Challenge
Nevertheless, the penury of jobs is not only triggered by the population growth outstripping job creation rates, as another cause is the technology revolution.
Today, we are at the beginning of another Industrial Revolution. Developments in internet and communication technologies, genetics, artificial intelligence, robotics, nanotechnology, 3D printing and biotechnology, to name only a few, are all building on and amplifying one another.
This will therefore lay the foundation for a more comprehensive and all-encompassing revolution than another we have seen before.
The rise of the sharing economy will allow people to monetise everything from their empty house to their car. Disruptive changes to business models will also have a profound impact on the employment landscape over the coming years.
Consequently, many of the major drivers of transformation currently affecting global industries are expected to have a significant impact on jobs, ranging from significant job creation to job displacement, and from heightened labour productivity to widening skills gaps.
In many industries and countries, the most in-demand occupations or specialties did not exist 10 or even five years ago, and the pace of change is set to accelerate. By one popular estimate, 65% of children entering primary school today will ultimately end up working in completely new job types that don’t yet exist.
While the impending change holds great promises, the patterns of consumption, production and employment created by it also pose major challenges.
Technological progress in automation, artificial intelligence and machine learning are some of the key factors attributed to them. Whilst the early industrial revolutions were largely effecting very manual jobs in factories or in farming, we will now see the technological and internet driven revolution fostered by increasing globalisation and competition and the effect this will have on the well educated workforce.
To that effect, the graph below shows the technological drivers for change. As you will see, the developments in communication technology and services taking the biggest share in the coming few years.