Skill shifts have been around since the start of the Industrial Revolution and probably before that time. And as innovation and new technologies appear, workers have to learn new skills in order to run the machinery as well as learning the technical skills to keep that machinery running.
It has been going on for a very long time, but the McKinsey report points out that the “adoption of automation and artificial intelligence (AI) will mark an acceleration over the shifts of even the recent past.”
The report found that by 2030, the demand for technical skills like software programming and data analytics will increase, however, the number of workers with these skills won’t grow fast enough to meet the demand.
San Antonio, Texas-based consulting firm, Frost & Sullivan echoed the findings of the McKinsey report in a May 31, 2018, blog post at Frost Perspectives, “Global Workforce Transformation in the Era of Industry 4.0.”
The Frost blog notes that the transition to AI, 3D printing, and industrial robots that enable fully automated and digital manufacturing capabilities is a disruptive process in this era of digitalization. But it is also disruptive to the workforce and its capabilities.
Manual labor will still be the major skill set in many countries – even with automation taking over many manufacturing processes. However, not having the skill sets for a digitalized and automated system will have negative consequences for the economy and labor market, according to the McKinsey report.
Workforce 4.0
The Frost blog terms the disruption to the workforce as “Workforce 4.0.” Basically, this means that companies will have to recruit workers with cognitive abilities, certain skills, and technical aptitudes, as well as social and emotional skills. These skills will rise, even as the demand for others, including physical and manual skills, will fall.
This transition will require workers to broaden their skill sets or even find new ones, while companies will need to seriously rethink how work is organized within the company itself.
As the Frost report states: “Manufacturers are in great need to reinvent themselves in terms of [their] workforce and prepare it for more value-added responsibilities. Manufacturers now are investing in acquiring tech-savvy talent and up-skilling the faculty to be able to leverage the new technology and adapt to its implications.”
Previous McKinsey studies have focused on the number of jobs lost to automation, with estimates ranging from 10 million to 800 million jobs being eliminated, However, this most recent report focuses on job skills impacted by automation.
There are many more considerations to think about when dealing with the problem of a skilled workforce, like who is going to pay for the additional training needed? And keep in mind that there is still a need for manual and physical labor skills. We are not at the point of sitting back and letting machines do everything, yet.
Another interesting consideration is the claim that automation and robots will force less skilled workers from high-paying factory jobs into the lower-paying service sector or even worse, out of the job force altogether. However, these claims are not supported by the data on recent economic performance or careful analyses of future labor-force trends.
Why? It seems productivity has stalled, despite automation. “From 2010 to 2016, productivity growth in manufacturing has averaged less than 1 percent—a period of unprecedented stagnancy,” says City Journal.
