As AI grows smarter, physical robots are put to work building, packing, driving and delivering, while software robots are unleashed in the back office processing invoices, ordering supplies and sending shipping notices. Automation is replacing jobs – of that, there is no doubt – leaving a critical question forming on the lips of many of today’s happily employed: “Is my job safe?” So – what is the extent of the situation, and which jobs, in particular, are at the highest risk of being lost to automation?
Jobs at Risk of Automation
A June 2019 report by analyst firm Oxford Economics – How Robots Change the World – paints a stark picture for those working in manufacturing. 1.7 million manufacturing jobs have already been lost to automation since 2000, according to the report, including 260,000 in the US, 400,000 in Europe, and 550,000 in China. But the rate of displacement is increasing. The report forecasts that 8.5% of today’s global manufacturing positions – 20 million jobs – will be displaced by industrial robots by 2030. Each new industrial robot that’s installed wipes out 1.6 manufacturing jobs, Oxford Economics says, with regions where more people have lower skills (and resultant weaker economies and higher unemployment) being the most vulnerable to job loss through automation.
(Image source: Oxford Economics)
And this is just one sector in which automation is replacing jobs. In fact, the report finds that people displaced from their manufacturing positions in the near future are likely to find that comparable roles in the services sector have also been squeezed by automation.
Oxford Economics finds that workers who move out of manufacturing tend to look for new roles in transport, construction, maintenance, and office and administration work – all of which are vulnerable to the rise of service robots. “Robots are steadily gaining traction in specific segments of the service economy, from baggage handling in airports to maintaining inventory in warehouses and even bricklaying on construction sites,” write the report’s authors. “Guided by sensors, cameras, and machine intelligence, which grow cheaper and more powerful by the year, robots are beginning to stake out their presence in the hospital ward, on the retail sales floor, and in hotels and restaurants.”
And what about the rise of robotic process automation (RPA) – where not physical but software robots are deployed to automate repetitive business processes? Well, as you might suspect, automation is replacing jobs in the back office, too. A recent article from SimpliLearn cites figures claiming that RPA will threaten approximately 9% of the global workforce – or about 230 million jobs – by 2030.
And it’s not just the relatively basic back-office roles that will feel the impact of automation. Professional service roles will also be hit, according to research from PwC. For example, automation is replacing jobs in finance and insurance. 30% of such roles in developed economies are at risk of automation by 2029, while 50% of all clerical roles are imperiled by automation over the same period. Data-driven industries such as the financial and insurance sector – and others, including the information and communication sector – are particularly automatable, says PwC, as workers in these sectors typically spend a disproportionately larger amount of their time engaged in simple computational tasks, much of which can be automated.
(Source: PwC)
The Big Picture of How Automation Is Replacing Jobs
The long and the short of it is that automation is replacing jobs in all sectors. But the effects of automation will not be felt evenly – nor at the same time – across all places or occupational categories.
A recent report from McKinsey – The Future of Work in America: People and Places, Today and Tomorrow – finds that less than 5% of today’s occupations can be automated in their entirety. However, within 60% of jobs, at least 30% of activities could be automated by adapting currently-demonstrated technologies. As such, what lies ahead is not a sudden robot takeover, but a period of ongoing – albeit accelerated – change in how work is organized and shared between humans and robots throughout the economy.
Harking back to PwC’s study, we can see how automation will impact industries differently over time. For example, the financial and insurance sector has the highest share of existing jobs at potential high risk of automation over the coming decade, but peaks at just over 30% in the early 2030s. By contrast, the transport and storage and manufacturing sectors have lower potential automation rates over the 2020s, but soar to over 50% by the 2030s – by which time, of course, autonomous vehicles are likely to have become widespread across the economy.
(Source: PwC)
As such, when we look at the big picture, what we are not likely to see is sudden mass unemployment. Nonetheless, many occupations are expected to shrink over the coming decade and beyond due to attrition and reduced hiring. McKinsey notes that this has already been occurring in certain roles, such as office support. Once populated by armies of administrative assistants, research librarians, and payroll and data clerks, offices are now run with leaner support teams and more digital tools. In fact, administrative assistants, bill collectors, and bookkeepers lost a combined 2260,000 jobs between 2012 and 2017, according to McKinsey. Gradually, even more of these types of roles will fall beneath the heavy axe of automation as time progresses.
McKinsey gives the top ten occupations with the highest potential for displacement and shows the potential impact across demographics.
(Source: McKinsey.com)
Final Thoughts
Automation is replacing jobs – and the more repetitive the role, the higher its risk of being wiped out. It remains difficult, however, to accurately pinpoint a specific window when automation will make any particular job redundant. As Michael Chui, Partner at McKinsey Global Institute points out; automation technologies are developed and adopted slowly – but come on fast once they hit the mainstream. “For any technology in the past few decades, the time between commercial availability – say that there’s an actual positive business case – and the plateau in adoption of this technology across the economy, is roughly one to three decades,” he says. “We model it out as eight to 28 years.”
So – is your job safe? It might well be for the time being, but eventually, no matter your occupation, you’re going to need to take a long hard look at your role and ask yourself if any of your daily tasks can be automated – for your employer sure will be. In the meantime, look out for our next blog – “Will My Job Be Automated?” – where we will be exploring online tools and research papers that will help you answer this question.
How does automation effect employment?
A June 2019 report by analyst firm Oxford Economics – How Robots Change the World – paints a stark picture for those working in manufacturing. 1.7 million manufacturing jobs have already been lost to automation since 2000, according to the report, including 260,000 in the US, 400,000 in Europe, and 550,000 in China. But the rate of displacement is increasing. The report forecasts that 8.5% of today’s global manufacturing positions – 20 million jobs – will be displaced by industrial robots by 2030. Each new industrial robot that’s installed wipes out 1.6 manufacturing jobs, Oxford Economics says, with regions where more people have lower skills (and resultant weaker economies and higher unemployment) being the most vulnerable to job loss through automation.
