The debate on automation and jobs

The increasing pace of digitization and automation is one of the most debated factors affecting the workplace and the structure of the workforce today. Robotic Process Automation (RPA) is being adopted across industries. In our annual global CEO survey1, CEOs reiterated the strategic importance of robotics and automation to their businesses and spoke of rates of adoption growing at more than 100% across functions. They further went on to estimate that 18% of jobs would be automated in 5 years’ time. Other sources of research corroborate this trend, with the Swedish Foundation for Strategic Research estimating that 35% of all jobs would be replaced by technology by 2035.

This trend taken in isolation can be a worrying one, more so for a nation like us where 120 million youth enter the workforce every year. Recently, on my way to the farms in Thiruvalluvar in Tamil Nadu, the team I was traveling with discussed about the technological innovation in the agriculture sector which now allowed mechanization of all parts of the cycle including ploughing, planting, harvesting, as well as applying inputs such as fertilizers and pesticides. We expected to see resistance to this mechanization in the farms we visited. We also were of the view that in a populous country like ours, a mechanized model was probably not the apt solution given the need to provide employment (even if this meant lower levels of productivity). It hence came as a surprise to see the farmers we visited actively embrace mechanized methods of cultivation, with a clear rationale that their crop yields and profits per acre of land had increased by 50-60%. This had not led to an increase in the unemployed in the villages – on the contrary, the youth had moved towards better paying jobs in the city and if anything, mechanization had helped solve the problem of not enough hands to help. Economies with low population growth such as in parts of Europe would look at automation in a similar way.

This experience and similar conversations across industries within the corporate sector brought home that historically, we have always had this situation with respect to technology and jobs. Technology has been providing us solutions to get work done more efficiently and to scale, which by definition means taking away jobs that can be done by a human being. During the Industrial Revolution, there were concerns that the cloth mills would mean occupation and livelihoods being taken away from the weavers. In the last century, transport systems meant jobs taken away from carriage drivers and stable boys. More recently, wide spread use of computers meant typists and stenos became redundant. A particular skill – and hence livelihood involving that skill – becoming obsolete has happened through the course of history. The scale of it may be larger in our current context, but that is also because the global population is at the highest it has ever been.

History had also shown us that if there is a better way to do something through automation, we should not allow barriers to adoption. Economies and countries have faced this dilemma and tried to balance between productivity enhancement and employment generation. Doing the latter at the cost of the former has only led to inefficiencies and is not sustainable in the long term. Rather, we have seen that productivity gains have meant greater surplus at a collective level that can then be redistributed – either by the government system or by corporations through CSR activities they undertake. I am not factoring in here the benefits automation has provided to customers and to workforce themselves – we have examples today in the insurance sector where a customer can submit pictures of auto accidents as a way to simplify and shorten the claims process. On the shop-floor, robots taking on a greater share of the load have resulted in fewer accidents and better health and safety record for the workmen. 

So what is really different now? All throughout history, even as jobs became redundant due to technology, newer ones have been created. Henry Ford's plant in Detroit meant many carriage drivers were under threat of their livelihood, however line operators, shift supervisors and managers were needed to run the assembly line and run sales and other functions. Having said that, the scale of organizations and workforce, and the increasing pace of technology change have made the issue have a greater impact than it may have had in the past.  The "cognitive re-apportionment" to aid collaboration between man and machine means that white collar jobs are being eliminated which is happening for the first time in history. 

For one, we will see an increasing need for reskilling in the coming years, where large sections of the workforce will need to learn new skills. To take an example from the banking sector, technologies such as Blockchain could mean that large parts of the settlement process are managed without the need for human interface. Workforce will need to show openness to learning these new skills, and organizations will need to provide platforms and avenues for it. The human mind can focus on tasks requiring more ingenuity than routine and repetitive tasks, with value add being related to "diagnosing" relating to domain-specific knowledge and experience. Thus an experienced hand in a cement plant would be valued for the ability to judge issues with the size of limestone being crushed in the clinker based on the sound being produced; an artisan's craft would be more valued and priced. We could see a generation of digital artisans with highly specialized skills grow and thrive. Also, workforce will need to be encouraged to develop skills and work in a "market place model" to look for buyers for those skills, rather than continue to bank on permanent employment models. Organizations will need to encourage entrepreneurial models of engagement and as a society we will have to see how to provide platforms for building entrepreneurs across the spectrum – from offering standardized skill based jobs to highly specialized ones.

Secondly, organizational structures will need to be revisited. The development of organizations with large workforces created the need for managers who added value through supervising the work of other people, however automation and new workforce models will increasingly mean that this role becomes less relevant. We will see more individual contributors at senior levels who bring in specialized skill sets that are not standardized; at the same time, supervisors will need to move away from "managing teams" to rolling up sleeves and having more direct engagement with customers and getting deeper into business and ways to add value. The traditional pyramid model will come under pressure and move towards more matrixed and collaborative ways of working – both within organizational boundaries as well as with an extended ecosystem. The mindset of managers in terms of how they add value and build their self-worth will have to be reshaped – this will not be an easy challenge considering that a belief system will need reshaping. This will also mean that newer methods of performance management, reward management and workforce engagement will need to be created. 

One of the areas of greatest impact will perhaps be on the leadership required for this digital age. We will need leadership that is not focused on pure cognition – as machine intelligence can build predictive models and conduct analytics far better – but has the ability referred to as "sense making". Further, leadership should be able to engage with teams within the organization and without, and inspire them with a vision and purpose, be courageous and stay the course through failure, and above all demonstrate a strong moral and ethical compass. In many ways, the focus will be back on the fundamentals of leadership. Creating this strong core to guide organizations in this digital age and build value in a sustainable and responsible manner will emerge as a key determinant of success in the coming years. 

¹ http://www.pwc.com/gx/en/ceo-agenda/ceosurvey/2016.html