The robots are coming, but it’s ok

23 November 2018

Machines are going to take many jobs, but in the wave of disruption that Artificial Intelligence is bringing, the emergence of new types of work we haven’t even dreamed of will outweigh the job losses.

The future of work

 

James Manyika, Chairman and Director of the McKinsey Global Institute, on how digitisation is fuelling the rise of new types of jobs

James Manyika, Chairman and Director of the McKinsey Global Institute, on how digitisation is fuelling the rise of new types of jobs

 
 
Martin Ford, a renowned futurist, has argued that AI will mean the future is one of massive structural unemployment.  In his book Lights in the Tunnel, he foresees a US economy that by the end of the century will have an unemployment rate of 75 percent due to advances in robotics and AI.
 
That’s one way to look at it. Another is that automation could create more jobs than it displaces and bring about new careers that we can’t even imagine.
 
According to James Manyika, McKinsey’s leading thinker on the digital future, past waves of technological change have resulted in job losses, but net job gains have been far greater.  
 
What’s different about the Fourth Industrial Revolution is that never before has technology replaced cognitive skills. That makes the issue of the future of work a compelling question.
65%
of children will find themselves in jobs that don't exist today - WEF estimate
James Manyika
"Some occupations decline, but many others actually grow and rise, and quite often many that grow and rise are the ones we could never imagine."

James Manyika, Chairman and Director of the McKinsey Global Institute

AI will fuel a productivity and growth surge

 
McKinsey has been putting some of its best minds onto thinking about the issue and supports the view that AI promises a new growth surge.  Manyika’s view if that there will be “more jobs, but of a different type”.
 
Historical experience is that “some occupations decline, but many others actually grow and rise, and quite often many that grow and rise are the ones we could never imagine,” says Manyika.
 
And it’s not just highly-skilled jobs that will be created. In fact, says Manyika, low-skilled jobs that are hard to automate will thrive.
 
“Jobs grow because the economy is growing, and yes many of those will be high-skilled,” Manyika says. But there will also be high demand for jobs that are hard to automate, many of which are low-skilled jobs.
 
From gardeners to hairdressers and care workers, Manyika believes it is difficult to automate a job that involves physical work in an unstructured environment.
 
Mckinsey doesn’t see as a case of low-skilled jobs losing out in the rise of exponential technology. “Rather than think primarily in terms of high-skill versus low-skill, it’s worth thinking primarily about what is the content of the work? Is it made up of activities that are easy to automate or not, regardless of the skill involved?”
 
In fact, Manyika points out, many highly skilled jobs that are easy to automate like accounting and data analysis, are most at risk of losing ground to machine learning.
 

An explosion of new careers

 
From Airbnb agents to Bitcoin traders, every decade in most economies, developed and developing, there are “about 10 percent of occupations that did not exist in the previous decade,” Manyika points out.
 
In the US, the “other” category into which the US Bureau of Labour Statistics initially places these new occupations, has consistently been the fastest-growing of any classification for 50 years, he says. And this is the case in most economies.

 

Side hustles and the rise of the gig economy

 
Analytics firm, Gallup, estimates that more than one third (36 percent) of the US workforce are plying their trades in the gig economy.
 
Driven by the proliferation of labour-sharing platforms like Uber and fiverr, the gig economy is defined as a series of freelance or part-time work (gigs) for people who want more flexibility or have a side business to their permanent job. But there are also people who are forced into gigging through necessity.
 
Although the gig economy has been criticised for not providing the benefits associated with permanent, it does give people opportunity, Manyika argues. 
57 million
Americans employed in the gig economy
Lindiwe Mazibuko
"Mechanisation could cause all of the unskilled labour to move over to the global North where the capital resides. When that happens, who’s going to employ our young people?”

Lindiwe Mazibuko, Co-founder and Executive Director of Apolitical Academy

Will South Africa be left behind?

 
At a recent Investec event, Lindiwe Mazibuko, co-founder and Executive Director of Apolitical Academy, said one of the main things keeping her awake at night is the issue of youth unemployment in South Africa, especially in the wake of the Fourth Industrial Revolution.
 
“We have a hugely undereducated workforce,” she says. In a world of AI, machine and algorithmic learning, “what kind of work environment have they been educated for?” she asks
 
Mazibuko disagrees with many African leaders who believe that increased wages and living standards in East Asia will result in a lot of unskilled labour making its way to Africa. “My sense is that mechanisation could change that, and cause all of the unskilled labour to move over to the global North where the capital resides. When that happens, who’s going to employ our young people?”
 
Manyika offered several solutions to put South Africa on a digital path and it all comes down to creating bigger data flows into and out of South Africa. The corporate sector is naturally connected to the global economy, but in South Africa, this sector is relatively concentrated says Manyika. The missing the key ingredients to interconnectivity – “a vibrant a small and medium-sized business sector” and globally-connected citizens.
 
In many other developing countries, Manyika says, “micro-nationals”, who are sourcing and supplying goods and services internationally, are driving the growth of those cross-border data flows.
 
On an individual level, a diaspora community can drive global connectivity, but also the “ability and access to digital platforms, so that individuals can consume digital content”.

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