On the day Ocado announced two company acquisitions to boost its robotic manipulation capabilities, Walmart announced it was scrapping its shelf-scanning robots - it had reportedly found that humans were more effective.

Walmart’s move perhaps signals that the much-heralded future automation of work is still a little way off for some. Nonetheless, the unstoppable march of technology continues and is sure to have profound impacts on what we all do in the years ahead.

THE IMPACT OF AUTOMATION AND THE COVID-19 PANDEMIC ON THE FUTURE OF JOBS

In 2016 Klaus Schwab, Founder of the World Economic Forum, wrote that the Fourth Industrial Revolution was “characterised by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres”. He commented that “We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before.”

Alongside this, the disruption caused by the Covid-19 pandemic has been a catalyst for many businesses to accelerate change and increase the rate of technology adoption and automation. Remote working at scale, brought about by the pandemic, has highlighted the potential of technology to change the way many of us work. Job cuts in this period also mean that employers will be reviewing alternative resourcing (and automation) options once demand picks up again. We considered a number of ways in which the Covid-19 crisis will significantly impact how businesses operate in the future in this previous insight for the Future of Work Hub.

WORLD ECONOMIC FORUM: THE FUTURE OF JOBS REPORT 2020

Against this background, last month the World Economic Forum published a 163 page report called The Future of Jobs Report 2020 (the Report) which focusses on this double whammy of “pandemic-related disruption” and “the expected outlook for technology adoption jobs and skills in the next five years”. The Report contains a wealth of data and numerous comparative tables and is a must-read for anyone interested in the future world of work.

Key findings from the Report

The report set out eleven key findings which include:

• The pace of technology adoption is expected to remain unabated and may accelerate in some areas.

• Automation, in tandem with the Covid-19 recession, is creating a ‘double-disruption’ scenario for workers.

• Although the number of jobs destroyed will be surpassed by the number of ‘jobs of tomorrow’ created, in contrast to previous years, job creation is slowing while job destruction accelerates.

• Skills gaps continue to be high as in-demand skills across jobs change in the next five years.

• The future of work has already arrived for a large majority of the on-line white-collar workforce.

• The window of opportunity to reskill and upskill workers has become shorter in the newly constrained labour market.

Most of these findings are unsurprising. However, one which merits further examination is the conclusion that, despite a slowing in the creation of new jobs and an acceleration in the loss of old jobs, new jobs created will ultimately exceed in number those lost.

A FUTURE OF JOB CREATION OR JOB DESTRUCTION

Future gazers have always divided into two camps. The optimists who are confident that change will only increase the available jobs. They point to past times of disruption where this optimism has invariably proved right. The pessimists say that just because jobs increased in the past does not mean it will happen this time. They point to the rapid pace of change this time and the impact automation has on so many areas of the economy. The World Economic Forum are clearly amongst the optimists.

LOOKING BACK TO PAST INDUSTRIAL REVOLUTIONS

Each of the past three Industrial Revolutions saw a transformation in jobs. The First Industrial Revolution, from 1760, arose as steam and water power drove an agrarian society to one based on manufacturing. By the time that electricity, oil and steel had led to the Second Industrial Revolution in 1870, the UK service sector had grown to 36% of the working population; manufacturing now accounted for 33%; with 25% employed at this time in the primary industries (mining, quarrying, agriculture and fishing).

By the time of the Third Industrial Revolution with the advent of automation and computing from 1969, the proportion of the British workforce employed in the service sector had increased to 64%; the proportion in manufacturing had declined to 24%; the proportion in construction had not changed greatly at 7% of the workforce; whereas there had been a dramatic decline in those employed in the primary industries to barely 3% of the workforce.

By the time of Schwab’s Fourth Industrial Revolution, four years ago, it was manufacturing which had declined dramatically to only 8% of the workforce. The service sector had now increased to 84%; construction was unchanged; and primary industries accounted for only a third of their numbers three and half decades earlier.

With the service sector dominating the British economy, the most significant parts of the sector are currently: retail and wholesale at 15%; followed by health and social care at 13%; education and hospitality both at 9%; transport at 5%; finance at 4%; and arts and entertainment at 3%.

Interestingly, like construction, the proportion of the workforce employed in retail and wholesale has not changed greatly over the last 150 years even if the nature of the jobs in that sector has.

LOOKING AHEAD TO THE FUTURE OF JOBS

In the winter of 1928, John Maynard Keynes imagined what the world would look like a century hence. By 2028, he predicted that, in Europe and the United States, his generation’s grandchildren would work about three hours a day. He has not been proved right.

The Report gives a fascinating insight into how jobs might change over the next five years and beyond. The Report looks at the jobs (in the US) which have declined most over the last ten years. The list includes: computer operators, secretaries, telemarketers, mail sorters and brick-masons.

Illustrating how new job replace the old, another World Economic Forum article identified ten jobs which had not existed a decade earlier. These included: app developer; social media manager; cloud computing specialist; data scientist; sustainability manager; YouTube content creator; and drone operator.

THE IMPACT OF AUTOMATION ON THE FUTURE OF JOBS

Over the next few years workers will move out of jobs made redundant by automation and technological advances. Other jobs will be impacted by the Covid-19 pandemic. However, it does not require a crystal ball to predict some of the jobs for which demand will increase over the next few years. These jobs might arise from technological advances; they might arise from professional and personal behaviour change prompted by the experiences over the last few months; and others might develop as a result of other changes such as confronting the climate crisis and the rise of social media.

In addition, just as the prospect of employment as an app developer or You Tube influencer would have been met with incomprehension a decade ago, there will, no doubt, be new jobs beyond our imaginations.

Over the next five years, the World Economic Forum predicts an increase in jobs in data and AI, cloud computing, product development, people and culture, marketing and sales whereas data entry, accounting, administrative and factory jobs will, it predicts, decline. The Report also points to new roles emerging within existing sectors such as: materials engineers in the automotive sector; ecommerce and social media specialists in the consumer sector; renewable energy engineers in the energy sector; FinTech engineers in financial services; biologists and geneticists in health and healthcare; and remote sensing scientists and technicians in mining and metals.

THE IMPACT OF THE COVID-19 PANDEMIC ON THE FUTURE OF JOBS

The profound impact of the Covid-19 pandemic will have resulted in many workers in the entertainment, hospitality and retail sectors having been forced to take new jobs in very different sectors. There was uproar about the government’s job advertisement as part of its “Rethink. Reskill. Reboot” campaign highlighting the opportunities in new sectors and featuring a young ballet dancer not knowing her future lay in cyber security. The advertisement was crass. However, it is indicative of some of the underlying challenges ahead in reorienting people towards the jobs of tomorrow.

Will these workers return to their old jobs once society opens up again? Some probably will but others will no doubt stay in their new areas of work. One interesting table (see below) in the Report shows the movement in recent months of young workers from entertainment, hospitality and retail to hospital and health care; financial services; and information technology.

THE IMPACT OF CHANGING VALUES ON THE FUTURE OF JOBS

Changing values and behaviours accelerated by the Covid-19 pandemic will increase the pace of change. More remote working and video conferencing is already having an immediate impact as jobs as varied as airline pilots, taxi drivers and conference organisers adapt to much reduced demand. There appears little likelihood of a return to anything like the number of city centre workers as the numbers of office workers they serve will decline dramatically even once the health risks of the pandemic are, hopefully, behind us. The genie is out of the bottle and the newly-appreciated benefits of remote working will mean that it cannot be put back in.

Now many employers see how effectively office work can be done remotely, attention is turning to how easily jobs could be done from lower cost locations. The term the “gig economy” was first coined in 2009 by former New Yorker editor Tina Brown, anticipating flexibility in the knowledge economy rather than with delivery riders or rideshare drivers. Will the Covid-19 pandemic hasten the realisation of Brown’s vision?

The rapid growth in online shopping is decimating the High Street. Will Joe Wicks and an increased interest in cycling and other forms of outdoor exercise result in many deciding not to renew their gym membership once the gyms reopen? The immediate future for many jobs looks uncertain.

Changes in priorities and values may well result in a renewed prioritisation for healthcare and caring employment. Statistics show that the two jobs in the UK thought to be the least vulnerable to automation were medical professionals and teaching staff in higher education. Whilst there would seem demand for many more jobs in healthcare and the caring professions, even these might be under threat as AI, for example, improves algorithm-based medical diagnosis and the Japanese pilot robot carers. Further, will remote learning in higher education reduce the demand for teaching staff in the longer term?

AN OPTIMISTIC OR PESSIMISTIC OUTLOOK ON THE FUTURE OF JOBS

Perhaps the optimism from the Report is well-placed but looking longer-term, Ocado’s robotic investment and Walmart’s next generation of shelf scanners will replace many retail jobs; driver-less vehicles and drones will reduce the driving and delivery jobs which are flourishing in Covid-19 times. Technology will find ways of undertaking tasks which even new jobs are creating for human workers.

Numbers of app developers and You Tubers; renewable energy engineers; biotech specialist; cycle repairers; nurses; and caring professionals may well increase. As with earlier times, new jobs which we probably do not have the vision to predict will appear.

However, today 40% of British jobs are in manufacturing; arts and entertainment; retail; transport; or hospitality. Arguably these are the sectors most likely to be impacted by the “double whammy” of the Covid-19 pandemic and automation. That’s a lot of jobs to be replaced, and quickly.

The jobs of tomorrow whether in cloud computing or e-commerce; healthcare or biotechnology are generally highly skilled. Even if the Report is correct and the number of new jobs available will outweigh the old ones which will go, training enough people to acquire the necessary skills will pose a huge challenge for employers and for our society as a whole.

Over the Summer, the Future of Work Hub hosted a three-part discussion series in collaboration with the RSA looking at how the pandemic is accelerating future of work trends. You can view our summary of the key themes and perspectives from these discussions here.