McKinsey has come out with a report on the impact of automation on jobs. According to the ‘Jobs lost, jobs gained: Workforce transitions in a time of automation’ report, 400-800 million workers will be displaced due to the emergence of robots and automation by the year 2030. The 400 million figure is a midpoint; dependent on the pace of adoption of the technology, there could be 800 million people who could be displaced.
The silver lining in the cloud is that technology will also lead to the creation of jobs that would offset the job loss. The caveat here being that organizations and countries will have to be adept at ensuring the smooth transition of the displaced workers towards the sectors and areas of strong job creation.
The report also states that around 75-375 million people would have to switch occupation by 2030. Here too, 75 million is the midpoint, while 375 million is when the adoption of technology will be fastest.
The impact of automation will also vary:
- By the country’s income level
- Industry structure
According to the report, the following factors will serve as a catalyst in the creation of work for both the developed and the developing economies:
- Rising incomes and consumption, especially in emerging economies: The report estimates that global consumption would grow $23 trillion between 2015 and 2030. And as income will rise, the consumption pattern will also change with consumers spending more on all categories. The sectors which will be affected by the same leading to greater job creation are as follows: consumer durables, leisure activities, financial and telecommunication sector, housing, healthcare, and education.
- Healthcare of aging population: The report estimates that there will be an addition of 300 million to the population above 65 years of age as compared to 2014. This will lead to increased spending on healthcare and personal services. Potentially, this could result in the creation of 80 million jobs globally in the healthcare and related sector.
- Investment in infrastructure and building: The report estimates on an average $3.3 trillion per year will need to be invested per year to fill the infrastructure gap. This could lead to the creation of 80-200 million jobs by 2030.
- Investment in renewable energy, energy efficiency, and climate adaption: In case of a step scenario, which is organizations and nations proactively working towards meeting the commitment of the Paris climate accord, there could be a potential creation of 10 million jobs in manufacturing, construction, and installation.
- Technology development: The report estimates that investment in technology will increase by more than 50 percent between 2015 and 2030. The investment would be largely focused on technology services and technology consultation. The resultant would be the rise in jobs related to the developing and deploying technology. The jobs which will be impacted would include the following profile: computer scientists, IT administrators, and engineers. Approx, 25-50 million jobs will be created globally.
- Marketization for previously unpaid work: As per the report, 75% of the unpaid work is taken care by the women. There could be a shift with individual households either investing in paid work, or the government providing universal childcare and other services. The shift could lead to the marketization of 50-90 million unpaid jobs by 2030.
The report also goes on suggests the following to nations across to ensure that the jobs created due to technology offset the job losses:
- Maintaining robust economic growth creation
- Scaling and reimagining job retraining and workforce skill development
- Improving business and labor market dynamism
- Providing income and transition support to workers
About 9-19% of the work activity hours will get automated by 2030 dependent on the pace of adoption of technology leading to automation.
Around 60 to 120 million workers could be displaced in India, and 3 to 38 million would be likely needed to change their occupation by 2030 dependent on the pace of automation.
There is a potential of creating 138 million jobs in India by 2030 (in a step up scenario) which would offset both the job loss and the rise in labor.
Following will be the percentage increase in jobs across sectors:
- Builders (construction workers, electricians): 18%
- Other jobs, predictable environment (machinists, cooks): 27%
- Customer interaction (retail sales, bartenders): 11%
- Caregivers (surgeons, nurses): 3%
- Other jobs, unpredictable environment (farm workers, firefighters): 32%
- Educators (Teachers, librarians): 2%
- Managers and executives: 2%
- Office support (payroll, clerks, data entry): 3%
- Professionals (business specialists, lawyers): 1%
The share of labor across sectors in India will change. Following is the net change in labor force across sectors in India by 2030 (in Million).
- Agriculture: -16
- Manufacturing: 41
- Retail and wholesome trade: 11
- Construction: 71
- Transportation: 1
- Government: 2
- Education: 6
- Finance: 3
- Healthcare: 11
- Accommodation and food services: 14
- Others: 12