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By 2030, automation may force up to 375 million workers to switch occupations

A McKinsey study on the impact of automation on jobs says it has the capacity to displace hundreds of millions of workers, but also has the potential to create new jobs.
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The impact automation will have on employment by the year 2030 could fundamentally alter the global workforce and potentially leave up to 375 million individuals looking for new jobs. But there is an opportunity to adapt if these workers re-skill, according to a new McKinsey Global Institute report.

The McKinsey researchers do not portray a far-flung future where all work is done by robots, but humans and automated technology working in tandem within 13 years. As in previous technological revolutions, they say work will be transformed and new types of jobs will be created, like what occurred during advanced countries’ shift from an agriculture-based society to an urban industrial one. Their findings in “Jobs lost, jobs gained: Workforce transitions in a time of automation” suggest this current transformation is going to take place more quickly and on a bigger scale, presenting different types of challenges.

Following up on McKinsey’s previous study on how automation can be applied to current jobs, the new report examines scenarios on how automation can affect the workforce in leading industrial nations. The researchers say that zero to 30 percent of all work hours globally could be automated within two decades. Yet this outcome will be determined and limited by the worldwide adoption rate for automation.

Source- McKinsey Global Institute

From routine physical tasks to data collection and analysis, McKinsey says automation will displace humans in these jobs but will have a lesser impact on jobs which require a more human touch like in management, health care and elder care. Rising demand for this work and increased production from automation could result in expanded economic opportunity–McKinsey estimates up to 280 million new jobs will be created by automation.

However, there will be difficulties in managing this transition. How will countries like China and the United States respond to large populations of workers being displaced? Between 73 and 93 million workers in the U.S. and up to 100 million in China will see their jobs disappear. The report suggests that policymakers and business leaders “should embrace automation’s benefits” to create solutions which provide workers access to these new jobs through skills training.

The lead author of the study, Michael Chui, tells Axios that government intervention to head off unemployment will require something akin to what the Marshall Plan did for post-war West Germany in terms of scale. Programs will be needed to educate and re-skill mid-career workers and direct them to new job opportunities, which the researchers say are “essential” to ensuring continued economic expansion.

Co-author Susan Lund tells USA Today that automation is less about job destruction but how societies and governments direct their resources to help the unemployed find new jobs.

The report says that governments will also have to pay attention to the increasing polarization of wages, especially in the U.S., which could see a decrease in demand for middle-skill wages while demand for high skilled wages increases. Predicted gains from automation will be negated if the unemployed do not find new work within a year of losing their job, resulting in a rise of “frictional unemployment” and in further wage suppression. This could have a damaging effect on the U.S. middle class, which is the bulwark of a sustainable consumer economy. A possible solution to this problem may lie in a basic income supplement provided by the government, the report says.

Though adapting to this new industrial revolution will be difficult, this latest McKinsey study affirms what history has shown, that humans have the potential to adapt to technological change. Stories about massive job disruption may be “overblown,” as Lund tells USA Today, but understanding automation and its potential to grow the economy is crucial to solving the problems caused by it.

Join the Conversation: Check out the report from McKinsey and let us in on your ideas on how societies can adapt to automation on our Facebook page.

Dana Beth Ardi

Executive Committee

Dana Beth Ardi, PhD, Executive Committee, is a thought leader and expert in the fields of executive search, talent management, organizational design, assessment, leadership and coaching. As an innovator in the human capital movement, Ardi creates enhanced value in companies by matching the most sought after talent with the best opportunities. Ardi coaches boards and investors on the art and science of building high caliber management teams. She provides them with the necessary skills to seek out and attract top-level management, to design the ideal organizational architectures and to deploy people against strategy. Ardi unearths the way a business works and the most effective way for people to work in them.

Ardi is an experienced business executive and senior consultant who leverages business organizational transformation through talent strategies. She uses her knowledge and experience to develop talent strategies to enhance revenue and profit contributions. She has a deep expertise in change management and organizational effectiveness and has designed and built high performance cultures. Ardi has significant experience in mergers, acquisitions, divestitures, IPO’s and turnarounds.

Ardi is an expert on the multi-generational workforce. She understands the four intersecting generations of workers coming together in contemporary companies, each with their own mindsets, leadership and communications styles, values and motivations. Ardi is sought after to assist companies manage and thrive by bringing the generations together. Her book, Fall of the Alphas: How Beta Leaders Win Through Connection, Collaboration and Influence, will be published by St. Martin’s Press. The book reflects Ardi’s deep expertise in understanding organizations and our changing society. It focuses on building a winning culture, how companies must grow and evolve, and how talent influences and shapes communities of work. This is what she has coined “Corporate Anthropology.” It is a playbook on how modern companies must meet challenges – culturally, globally, digitally, across genders and generations.

Ardi is currently the Managing Director and Founder of Corporate Anthropology Advisors, LLC, a consulting company that provides human capital advisory and innovative solutions to companies building value through people. Corporate Anthropology works with organizations, their cultures, the way they grow and develop, and the people who are responsible for forming their communities of work.

Prior to her position at Corporate Anthropology Advisors, Ardi served as a Partner/Managing Director at the private equity firms CCMP Capital and JPMorgan Partners. She was a partner at Flatiron Partners, a venture capital firm working with early state companies where she pioneered the human capital role within an investment portfolio.

Ardi holds a BS from the State University of New York at Buffalo as well as a Masters degree and PhD from Boston College. She started her career as professor at the Graduate Center at Fordham University in New York.