Introduction
Reports suggesting that artificial intelligence and machines will force tens of millions of workers into early retirement over the next 10 years seem like an obvious call. Yet, too many of the projections fail to account for the ability of digital technologies and their applications to generate new jobs, companies, and even whole sectors and industries.
The 451 Take
Over a decade or two, many jobs will evolve or become replaceable due to new technologies and shifts in the production of goods and services. The primary concern for all economic actors is the pace at which replacement occurs and to what degree workers move into tech-augmented jobs or newly created ones. Our Voice of the Enterprise: Macroeconomic Outlook, Business Trends - Advisory Report finds that automation, still in its formative stages, will likely create more new jobs than it will obsolete in the year ahead. More important is what underlies job gains and losses – 2-in-5 organizations assert that automation will change the types of jobs employees perform, and 1-in-3 report it’s having a greater effect on employees compared to one year ago.
Details
Although many of the difficulties of transitioning into a digitally embedded economy cannot be predicted, our research suggests the immediate future is less discouraging than the one frequently described.
- Nearly one-quarter (23%) of respondents (4% strongly, 19% somewhat) agree that over the next 12 months, automation will create jobs in their organization that did not exist previously. Larger firms (1,000+ employees) outnumbered smaller ones that strongly/moderately agree by more than a 2-to-1 margin.
New jobs are being added that leverage advanced technologies, not only software developers and information security specialists – who are constantly in short supply – but also in these areas: health and science, technology, engineering and math professions, health aides, technicians and wellness, education and workforce training. Generally, jobs that tap into human creativity or socio-emotional skills will continue to experience rising demand.
- Less than one-fifth (17%) – just 2% strongly – believe their organization will employ fewer people because of automation over the next 12 months. Once again, larger firms outpolled smaller companies by better than double.
Among the most vulnerable occupations is office support, which employs almost 21 million Americans and is the most common job, according to McKinsey. Food service is another heavily affected category, followed by production work, customer service and sales, builders, and business/legal professionals. About two-thirds of US workers don't have a college degree, which puts them at higher risk of losing work to new technologies.
Our findings indicate that automation’s impact will be less on overall job gains or losses, and more related to changes in the nature of the work being done:
- A higher percentage of respondents agree (8% strongly; 32% somewhat) that automation will change the types of jobs employees perform at their company. By nearly a 5-to-1 margin, larger firms strongly agree with this view in comparison to smaller organizations.
- One-third (33%) agree – 5% strongly/28% somewhat – that automation is having a greater effect on employees at their companies today than it was a year ago. Those in manufacturing and software & IT services expressed the most optimistic view of automation and the effect it is having on employees in these industries.
The broad gaps between small businesses and midmarket to multinational enterprises are due to numerous factors, although availability of capital resources is chief among them. Implementing automation often involves a large up-front investment – and maintaining and improving technology is an ongoing effort. Big or small, however, all organizations must consider everything from financial means to labor costs and return-on-investment for automation projects.
With the unprecedented scale and pace of change in the workforce, how the 21st-century is shaped will largely depend on whether automation addresses the great economic challenges, such as inequality and quality of work, or exacerbates those problems. Our current data suggests that, in the near term at least, the US economy is better equipped to adjust to the upheaval and instability than is widely believed.
Joshua Levine
Senior Analyst, Digital Economics
Joshua Levine covers the macroeconomic impacts of IT for 451 Research. Levine has explored new ways to evaluate data and research, interpret its meaning and context, and convey the essence of narratives and trends for industry experts and the financial market.
Brenon Daly
Research Vice President
Brenon Daly oversees the financial analysis of 451 Research's Market Insight and KnowledgeBase products, having covered more than a quarter-trillion dollars' worth of deal flow for both national publications and research firms.
Partick Daly
Analyst, Information Security
As an Analyst in 451 Research’s Information Security Channel, Patrick Daly covers emerging technologies in