But simple answers to complex changes to the labor markets are rarely correct. Prognoses in economics and technology can be good as indicators for what you should prepare for strategically in businesses and organizations.
But predictions rest on certain presuppositions and constants regarding society and people, which is exactly why they have rarely been able to predict how the real multifaceted future will unfold.
We live in a digital time and there will be plenty of changes in the labor markets of the future, which we need to be aware of.
The gloomy predictions
For the past 5 years I’ve been very preoccupied with the digital and technological revolution as a crucial megatrend in society, no matter if it’s called Big Data, Disruptive Technology or Industry 4.0. We’re living in an in-between time, where new technologies, their influence and scope will fundamentally change teaching, production, services etc. in both public and private businesses. So there’s every reason to have a strategic focus in this area.
The big numbers and big headlines sell the best and more scientists/experts predict that more than 40% of jobs will disappear from the labor market within the next 15 years. Recently I heard Josephine Fock from Alternativet use this argument to advocate a 30 hour work week, since there simply wouldn’t be enough work for all of us in the future otherwise.
A very widely discussed study (JP 15/11 2016 for example) done by Frey and Osborne (2013) from Oxford University, predict that nearly 50% of all jobs in USA will disappear because digitalization and there was also an overview that showed which types of jobs would largely be gone by 2030.
The Devil is in the Detail!
The new thing Frey and Osborne did in 2013 was to use the word computerization in the same way as digitalization, where the word connotes a number of technologies, like for example artificial intelligence, robots, and reorganization of tasks and to look at the likelihood of future technologies replacing work tasks within the individual profession/job.
Mika Pajarinen, Petri Rouvinen and Anders Ekeland (2015) used the same method to predict the extent to which digitalization will replace jobs in the future in Norway and Finland and found it likely that 30% of all job functions would be replaced by new technology in the shape of digitalization and automation.
This means it’s an entirely technological prediction of how new technologies such as automation could replace job functions within individual jobs/professions.
Mika, Petri and Anders also point out that especially low-wage jobs and unskilled jobs are most likely to be replaced and that the private sector is more accommodating to new technological changes than the public sector is, which has been protected by rules that make the implementation of new technologies happen at a radically different speed.
This point is very relevant. In these technological predictions, society is kept constant, meaning that it’s the same society by 2030 that it is today. It’s highly unlikely that we won’t live, make laws, spend money, communicate, and shop in many different ways over the next 15 years. It’s not just the labor market and technologies that change, but also politicians, people, systems and markets that are under constant change.
At the same time, they haven’t taken changes in job functions and how jobs will overlap up till 2030 into account, which is a not insignificant detail, since positions and jobs are under constant change in the job market. It’s not unusual that about half of all jobs disappear in 10 years and the same amount of new jobs is created in the same period, even if fewer are created during crises.
Jobs and job functions are fusing together into new jobs. An electrician, for example, might’ve been able to do most tasks in the past, while today there are many different specializations, directions and educations within the profession, because it needs to match businesses and society’s needs for specialized labor in many different contexts.
Trends in the job market up till 2030
First of all, what we expect won’t always happen, and that is especially true for what the prognoses predict. Like Rolf Jensen, one of the founders of research on the future in Denmark, used to say, “I retain the right to wise up over a very short period of time”.
Wisely said, because it’s quite an important trait, to be able to get smarter and change directions quickly in the job market of the future. That’s simply because it’s a recurring trend that things rarely happen the way we expect them to.
As an example, when globalization really took hold in the 00s, it was predicted by many people that all unskilled labor would disappear to countries with cheaper labor costs. Today we have de facto fewer unskilled jobs than we did 10 and 20 years ago and in just 2 years, from 2013 to 2015, around 20.000 unskilled jobs have disappeared. But unskilled jobs still exist in the Danish labor market and my claim is that even in 15 years, we’ll need unskilled workers who can solve tasks and situations that the digitalization can’t handle.
The biggest change has been and is, that we all, no matter length of education, are in a global, local or regional competition for our jobs and functions in our jobs. Companies have whenever possible moved job functions and positions to places in the world where they could be solved best and cheapest, and since there are now many well educated people in places like South East Asia, many tasks such as graphics, image retouching, 3 and 4D animations and engineering calculations are handled in other places in the world where there’s highly qualified labor. The crucial factor is that the job or job function hasn’t been connected to the physical world and can be moved easily to be solved in many places.
At the same time globalization has created new jobs in companies, for example for those who manage and assess quality in processes and products and it has given multiple Danish companies big opportunities to develop sales and markets in more countries than was possible earlier.
Permanent or temporary immigration, especially the local one from Europe and other parts of the Western world has brought more competition in the labor market and many unskilled jobs in service, industry, agriculture and horticulture that were occupied by Danes are today mainly done by skilled workers or highly educated people from Poland and Hungary. It gives the unskilled Danish workers some difficult odds in the competition on the labor market. It’s also a recurring trend that people move based on work, if it offers them the chance at a better life both workwise and privately.
Digitalization in broad terms is already in full swing at changing globalization. More companies are taking their job functions and production home such as Jysk in Denmark and Lenovo in USA, because it’s actually possible to make better and cheaper products than earlier thanks to new technology. Digitalization can therefore be seen as a way to secure jobs and production in Denmark in the future.
It’s easily imaginable that the people employed in the Scandinavian village in Poland, who solve bookkeeping tasks and economy functions for private businesses in Scandinavian countries will lose their jobs because digitalization can solve the tasks better and at lower costs for companies like Arla A/S. So it’ll be routine jobs and therefore many different nationalities’ jobs all over the world that will be automated up till 2030.
Digitalization in the shape of new digital platforms in the labor market, so called interface agents, go between the supply and demand for workforce, such as Upwork.com and Amazon’s intelligent Turk, that make sure that it’s easy for those who hire to compare those who supply workforce on their competencies and prices etc. as we know it from products and for the suppliers to access a far larger market. In this way a free and easily accessible global job market for select tasks and areas is encouraged.
We’ll see more freelancers and as some call it, a precariat, because people in the latter category have to work with no job security, pension and rights that you’d otherwise only have as an employee. Again the development isn’t clear cut, but I imagine at the very least two groups of freelancers.
First of all there’s a lot of competition on the jobs that are so-called unskilled jobs such as cleaning, taxiing and transport because easy access to a relatively uncomplicated service with a lot of supply means an extremely tough competition on price. The price, meaning the salary, will be forced down by the many suppliers and less demand. It’s not a fun place to be on the labor market.
On the other hand, other freelancers, including highly educated and/or the very specialized, who are in possession of very attractive competencies and abilities will be able to create a far better life for themselves as freelancers. Exactly because there are few suppliers and many who want their competencies, it’ll be possible for many it-specialists to work less and earn far more than if they were employees in a company.
The lack of workforce in many professions seen even today might also mean that digitalization is a necessary solution that’ll allow businesses to keep producing goods and services in the future. In that way, the lack of a workforce will force companies to replace workforce with new technology.
Brave new digital world up till 2030
In broad terms we’ll all work with digitalization seeing as we have to develop, control and implement the brave new digital world in companies ourselves. It won’t happen on its own. In the next 10 years we’ll start talking in earnest about work tasks, rearranging and which tasks might best be handled by a diverse range of new technologies, even some we don’t yet know.
New technology needs to be developed in the market and in the situation and the relevant actors, whether they are citizens, customers or employees, should be included in the development, otherwise it’ll likely fail. There are plenty of examples of that. That’ll also hold in the future.
In industry, which is already automated at a relatively high level, the new systems and technologies will relatively easily raise production, sales etc. to the next level.
The private service sector will go through big changes since large parts of the service sector hasn’t seriously started to automate and digitize and therefore haven’t had the same productivity and efficiency jumps as industrial companies have. Here digitalization will really change the number of jobs and the content of those jobs.
In the public sector it’ll depend a lot on the political will. It’s very imaginable that intelligent robots can help citizens with disabilities with far more flexibility than the fast drive-in care worker that show up for a short time and then rushes on. Citizens aren’t just interested in warm hands, but also in getting the help they need 24/7. Here digitalization offers a number of new opportunities if you dare to and want to use them.
There’s a lot going on in the scientific area, like the IBM robot Dr. Watson that has all medical research in the field on oncology stored and which is being constantly updated. It’s therefore able to more precisely and efficiently connect health data from a patient with existing valid research and based on that is able to make a more precise diagnosis and efficient treatment. A current gathering of knowledge, that a doctor would need years to build up, is suddenly automatically stored in an intelligent robot.
It’s also easily imaginable that new technology can democratize relevant healthcare science to all employees in the healthcare system if it’s handled properly.
In the education sector we already have the teaching assistant Watson Dr. Jill that can help the teacher answer questions about schedules, content, deadlines etc. The robot’s capacity is massive compared to the individual teacher. It helps improve the conditions for students, because far more of them receive answers to their numerous questions than they could before.
So be prepared for a challenging and very exciting journey to the digital workplace of the future.
Published here 2017
Head of Research