We live in a world where productivity, a key pillar of long-term economic growth, has crumbled. Now comes potential help, in the form of advanced robotics, machine learning and artificial intelligence, which can already outperform humans in a range of activities, from lip-reading to analyzing X-rays.
The catch is that adopting these technologies will disrupt the world of work. No less significant than the jobs that will be displaced are the jobs that will change, and those that will be created. New research by the McKinsey Global institute suggests that roughly 15% of the global work force could be displaced by 2030 in a midpoint scenario, but that the jobs likely created will make up for those lost. There is an important proviso: that economies sustain high economic growth and dynamism, coupled with strong trends that will drive demand for work. Even so, between 75 million to 375 million people globally may need to switch occupational categories by 2030, depending on how quickly automation is adopted.
The trade-off between productivity and employment is actually less than it might seem at first sight, since the bounce that productivity brings to gross domestic product will raise consumption and, hence, demand for labor. This effect will be stronger and faster if the gains in value added turn into income in the hands of those who are likely to spend it. Broadly distributing income gains will then translate productivity growth into GDP growth.
On the supply side, the key will be to address a range of issues that will help us through the transitions.
Three priorities stand out:
First, a much sharper focus on skills and training.
Second, we should take another look at making the labor market more fluid, including by more active use of digital technologies for job matching and for stimulating the rise of independent work. Government, businesses, educational institutions and labor organizations need to collaborate to ensure that incumbents and new entrants to the labor market have accurate forward-looking knowledge of the evolving mix of skill and experience requirements.
The third priority should be a re-evaluation of income and transition support to help displaced workers or those struggling with transitions to new occupations.
Ultimately, the productivity conundrum can be resolved, if we embrace and unleash the benefits of automation and put in place a smart set of policies to ensure that everyone is prepared for it, and everyone can benefit.
(James Manyika is the San Francisco-based director of the McKinsey Global Institute.)
