Manufacturing AUTOMATION

Rise of robots, AI to cost 5 million jobs by 2020

January 18, 2016
By Manufacturing AUTOMATION

Jan. 18, 2016 – The Fourth Industrial Revolution — which includes developments in artificial intelligence (AI), machine-learning, robotics, nanotechnology, 3D printing, genetics and biotechnology — will result in a net loss of 5 million jobs and cause widespread disruption to business models over the next five years, according to a report published today by the World Economic Forum (WEF).

In terms of overall impact, the Future of Jobs report indicates that as many as 7.1 million jobs could be lost through automation, redundancy or disintermediation, with the greatest losses in white-collar office and administrative roles. This loss is predicted to be partially offset by the creation of 2.1 million new jobs, mainly in more specialized “job families,” such as computer, mathematical, architecture and engineering, it adds.

The report is based on a survey of chief human resources officers and strategy executives from companies across nine industry categories, covering 15 economies that account for approximately 65 per cent of the global workforce, says the WEF.

Respondents expect strong employment growth across the architecture, engineering, computer and mathematical job families, a moderate decline in manufacturing and production roles and a significant decline in office and administrative roles. On the plus side, across all job families, chief human resource officers expect major challenges in recruiting.


When it comes to respondents’ outlook on how best to deal with these sweeping changes, the news is more encouraging. The most popular workforce strategy across every industry is investing in reskilling current employees. Other practices, such as supporting mobility and job rotation, attracting female and foreign talent and offering apprenticeships, also scored high. Indeed, the survey suggests that those companies that are treating future workforce planning as a priority are almost 50 per cent more likely to invest in reskilling than those that do not.

“Without urgent and targeted action today to manage the near-term transition and build a workforce with futureproof skills, governments will have to cope with ever-growing unemployment and inequality, and businesses with a shrinking consumer base,” said Klaus Schwab, WEF founder and executive chair.

Drivers and barriers of change
The analysis finds the most significant driver of change, across all industries, is the changing nature of work itself. As new technologies make “anytime, anywhere” work possible, companies are breaking up tasks in new ways, leading to a fragmentation of jobs across many industries, it notes. These effects are further compounded by the rise of mobile internet and Cloud technology, enabling the rapid spread of Internet-based service models. However, while the new “gig economy” may be one of the most visible and current manifestations of disruptions to the labour market, there is more change — both positive and negative — expected in specific industries, leading to new management and regulatory challenges, it says.

There is also a gender implication to the future of jobs. Based on the absolute job gains and losses mentioned above, the burden of job losses seems to fall equally on women (48 per cent) and men (52 per cent), according to the analysis. However, given that men represent a larger share of the overall job market than women, this even spread translates into a widening of the employment gender gap, with women losing five jobs for every job gained compared with men losing three jobs for every job gained, it found. This is also partly explained by low participation by women in the “job families” that are expected to grow, such as computers and mathematics, thus adding to the urgency with which leaders must address the chronic problem of getting more women into STEM (science, technology, engineering, mathematics) professions.

One of the major barriers to change identified by chief human resource officers is the lack of specificity on the types of disruptive change under way.

“While forecasts vary by industry and region, momentous change is under way and, ultimately, it is our actions today that will determine whether that change mainly results in massive displacement of workers or the emergence of new opportunities,” concludes the report.

“Our analysis reveals that upcoming disruptions to the employment landscape will be about much more than simply automation. It is essential that we act collectively now to prepare ourselves for the changes that we know the Fourth Industrial Revolution will bring,” continues Saadia Zahidi, head of the Global Challenge on Employment, Skills and Human Capital at the WEF.

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