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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To avoid massive unemployment, humans must train to work new jobs which rely on some form of automated technology. Photo – Shutterstock

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.

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