By Neil Patrick
As I wrote about in my post here, the main theme of the 2016 World Economic Forum (WEF) at Davos was the Fourth Industrial Revolution (FIR). And most normal people completely ignored it (that's both the Forum and my post about it!). But this particular topic has profound implications for anyone who wants to earn a living in the next 20 years or so.
Change has always been around us, what's different is the speed
These things are going change everyone's experience of work - what we have seen so far is just the start of changes so profound that almost no-one has figured out yet how individuals need to respond. Not being one to shy away from a challenge, I am going to attempt to describe what this means and what I think everyone needs to do about it.
Most people are not even aware of the third industrial revolution (this was when computers and the internet combined to create a new digitally connected world), let alone the fourth. The defining characteristics of the fourth industrial revolution are extreme connectivity, rapid change and the increasing automation of work.
VUCA (Volatility, uncertainty, complexity and ambiguity) describes the conditions which will dominate the world in the coming decades. A VUCA world is a place in which some will thrive, but many will wither because they simply do not know how to respond to it.
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| Davos: where the 'great' and the 'good' ponder our futures. |
Education alone will not be sufficient to equip us to cope
Despite my somewhat bearish view of what this all means for the future of jobs, there are things we can all do to reduce our risk exposure. We cannot change the world we live in, but we can change how we respond to it.
I am not yet convinced that the key agents of change (business leaders, educational institutions and government, public and legal bodies) have the motivation, insight and sense of ownership to create the conditions for economic success for citizens in the FIR. They have to become visionary, agile and deeply committed to responding rapidly and effectively to this challenge. I see very little evidence that much of this is happening.
Education is a key pillar to enable the necessary changes in our societies for the digital age. As Vishal Sikka, CEO of Infosys says:
“Today’s classrooms often operate in the same way they did when farmers composed the majority of our societies; when memorization was rewarded more than curiosity and experimentation; when getting something right outweighed learning through failure. We must transition away from our past; shift the focus from learning what we already know to an education focused on exploring what hasn’t happened yet. This system would resemble an ecology – constant, small adjustments made by independent actors inside of a cohesive whole.”
Educational attainments are no longer something we strive for only when we are young. It has to be a lifelong commitment. It is not learning that is redundant, it is how and what we learn as individuals and societies that must change.
But if education is geared to the needs of the past, not the future, it cannot deliver the sort of learning we all need. Just the other day, I was asked by a friend about the wisdom of a decision his sister was making to career shift to being an interior designer. Her plan was to spend the next 3 years and many 000's of dollars studying this at college. I thought she was crazy. Much better to just start doing it - educational qualifications are not the barrier to success in this sort of field. Winning clients and generating profits is. It seemed to me this was a plan for self indulgence, not a successful career shift.
Traditional jobs are going to become much more scarce
In essence this is the problem; if AI and robots do more and more of the work that people used to do, just how much confidence should we place in the ability and commitment of government and businesses to create the 600 million new jobs that the World Bank forecasts we will need by 2030 just to keep pace with population growth?
If you want some stats, the WEF estimates that the following job losses will occur by 2020 i.e. the next four years:
4,759,000 clerical and administrative jobs
1,609,000 manufacturing jobs
497,000 construction and mining jobs
151,000 sports and creative industry jobs
109,000 lawyers
40,000 maintenance and mechanics
So taking just clerical, admin and manufacturing jobs into account, these two categories alone are forecast to lose over 6.3 million jobs in the next 4 years.
The simple maths of the World Bank’s goal of 600 million new jobs is that we need an average of 40 million new jobs being created globally every year between now and 2030. And this requires a massive growth in work for people to do and be paid for. There is just no way that current or projected economic growth will deliver this currently.
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| All careers need one of these... |
Who will win and who will lose?
These changes will create winners, but many more losers. In general, the winners will be those with the most in demand competencies in the FIR which are expected to be flexibility, creativity and tech skills; those without these will be the biggest losers. And if you think the growth of wealth inequality is a problem today, you’ve seen nothing yet…
As Klaus Schwab, Founder and Executive Chairman, World Economic Forum says in his insightful commentary here:
“In addition to being a key economic concern, inequality represents the greatest societal concern associated with the Fourth Industrial Revolution. The largest beneficiaries of innovation tend to be the providers of intellectual and physical capital—the innovators, shareholders, and investors—which explains the rising gap in wealth between those dependent on capital versus labor. Technology is therefore one of the main reasons why incomes have stagnated, or even decreased, for a majority of the population in high-income countries: the demand for highly skilled workers has increased while the demand for workers with less education and lower skills has decreased. The result is a job market with a strong demand at the high and low ends, but a hollowing out of the middle.
This helps explain why so many workers are disillusioned and fearful that their own real incomes and those of their children will continue to stagnate. It also helps explain why middle classes around the world are increasingly experiencing a pervasive sense of dissatisfaction and unfairness. A winner-takes-all economy that offers only limited access to the middle class is a recipe for democratic malaise and dereliction.”
So this is the problem. Our economies are still functioning (sort of) using 20th century models and policies. But traditional monetary and fiscal levers have all failed to reignite the growth that is required for this model to function. Politicians have run out of answers despite their protestations that this or that policy will solve the problem. It won’t.
So when the state fails to deliver for us and shows no promise of doing so, the thing we have to do is take care of ourselves.
In my next post, I’ll describe what I think these things need to be. Just follow this link.
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