April 20, 2017

Automation, Unemployment & the Skills Gap

The Internet of Things is positioned to change life – and work – as we know it. IoT applications can allow businesses to be more efficient by addressing user preferences, avoiding truck rolls, controlling and monitoring things from afar, fixing problems faster, helping us locate resources more quickly, saving energy, and generally making life more pleasant and productive.

In the process, IoT is positioned to accelerate massive change in the workplace. And while there are many good aspects to that, it’s not all great news for everybody. The automation that IoT can engender could displace a greater number of employees. And that will only expand the high-level skills gap we’re already staring into.

It’s easiest to automate physical activities that are highly structured and predictable, as well as data collection and processing tasks, notes a January paper by McKinsey Global Institute. That kind of work makes up 51 percent of activities in the U.S. economy and accounts for nearly $2.7 trillion in wages, McKinsey says.

“They are most prevalent in manufacturing, accommodation and food service, and retail trade,” McKinsey researchers write. “And it’s not just low-skill, low-wage work that could be automated; middle-skill and high-paying, high-skill occupations, too, have a degree of automation potential. As processes are transformed by the automation of individual activities, people will perform activities that complement the work that machines do, and vice versa.”

That will call for a workforce with very different skill sets. And it will mean many of those skills will be at a higher level. That’s good, right? Taking humans out of the equation when it comes to mind-numbing tasks is a plus. And nobody in business has ever argued against being more productive. Yet the fact remains that we’re already grappling with a shortage of highly skilled workers. And our universities and other schools aren’t churning out people with the right skill sets at a fast enough rate.

“The headline here is how the nature of work is changing,” Rebecca Winter, Microsoft’s talent management director for EMEA, said in a recent Q&A with HRD Connect. Winter then pointed to how businesses of all stripes are undergoing digital transformation. She also talked about how automation of work will contribute to the skills gap.

Obviously, part of the problem is that we need to educate the workforce and up-and-coming generations in the right way so they have the skills they’ll need for today and in the future. But this is a more complex equation than just adding skills and people. Businesses and educators also have to decipher exactly what kinds of skills are and will be most relevant, because we’re covering new ground. 

Edited by Ken Briodagh

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