Ever since the invention of the first cotton gin, steam engine and railroad track marking the beginning of the First Industrial Revolution in the early 1800’s, the world has experienced unprecedented changes in terms of the contours of the job market shifting the economy from mostly agricultural to predominantly industrial. Furthermore, the sudden shift did not only change the present at the time, but also served as an incubator for the two subsequent industrial revolutions that brought about exponential transformation in terms of technology, job skill requirements, expansion of the labor market, as well as digitalization and computerization of everyday life.
No previous revolution, however, has brought about such radical system-wide innovation like the Fourth Industrial Revolution that we are experiencing today. The interaction between nanotechnology, robotics, 3D printing, brain research, and “smart technologies”, as well as the adoption of cyber-physical systems creates a fertile ground for exponential change that might transform the outlook of everything we know in a matter of years. This universal access to technology and “smart” systems will transform the business model of every industry. The most relevant question that looms over the great promise of our time remains the same as always: how do we avoid joblessness, low productivity and inequality by adapting to the new growing needs of a steadily saturating labor market?
Current State of Affairs
The world we live in today has never seemed smaller, more connected and better suited to all of our needs. Technology and digitalization have penetrated every pore of our private and work life, and “smart” systems have become an integral part of our every experience – working together with us and for us. Economic prosperity, job opportunities and individual progress seem more attainable than ever and yet, they are completely contingent upon our ability to adapt our skills to the demand of the job market. The Fourth Industrial Revolution offers great promise for expanding the job market, creating never before imagined positions and opening up opportunities for a whole range of workers to join this new and digitalized market. However, the technological advancement brought about by this revolution inevitably leads to automation of task performance and reduction of the need for workers to perform a certain job. Nevertheless, the increase in the demand for a specific type of skillset offsets the decrease in demand for skills that are now becoming redundant due to technology, thus maintaining the balance between supply of workforce and demand for workers. However, it is not as simple as it seems. In order to achieve this balance, a long and difficult transition for many workers and a substantial investment in training and preparing a new group of enthusiastic learners are required.
Human Capital Investment as an Asset Rather Than a Liability
In order to adapt efficiently to this ever-changing work atmosphere, a proactive involvement on behalf of government, companies and individuals is crucial. Businesses, through training and upskilling, must actively and continually support the workforce to be able to keep up with the introduction of new technologies, as well as new business models. Individuals must show active interest in self-development and progressive learning, while governments should do everything in their power to assist these efforts either through funding or through other kinds of support. The support can come in the form of organizing state funded training, providing scholarships for professional development and higher education as well as subsidizing the employment of non-specialized workers with the intent of stimulating on-the-job training and talent development. It is important for businesses and government to understand that technological progress and upskilling of workers is intertwined, and that one is dependent on the other. New technology stimulates business growth that in turn provides fertile ground for upgrading and upskilling of workers. The talent development of the workforce, on the other hand, further supports the technological advancement, creating a beneficial cycle of well-rounded progress. Oppositely, skill deficiencies, and faltering to upskill on behalf of both workers and senior management, affects new technological advancement which inevitably leads to the obstruction of the growth of the business sector affecting profits as well as talent development.
The Future of Jobs and Skills across Industries
When discussing the future of jobs and skills, the future of the industries across the business sector must first be addressed. With the ever-increasing use of technology, performing tasks with the help of computers and algorithms is more widespread than ever, which promises to improve both performance and quality, if managed correctly. However, if technology is not used as a tool invented by people and for people, it threatens to widen the skill gaps and create further inequality.
The World Economic Forum recently came forward with an in-depth report and statistical analysis of the current state of the labor market. It used this data to form projections regarding the future of the job market and the skills that will be necessary to join or to continue to participate in the job market. Some of the report’s key findings suggest that by 2022 there will be an accelerated technology adoption, change in employment types, automation of task performance, growth in emerging professions and surge in roles based on use of technology, as well as a need to address skill gaps and devise a strategy for upskilling. (WEF, 2016)
By 2022, high-speed mobile internet, artificial intelligence, cloud technology and big data analytics will be the most widespread technological advancements and will dominate the business sector positively affecting its growth. According to the statistics from the data gathered by WEF, by 2022 more than 85% of companies will have adopted big data analytics, cloud computing and internet. Robotization and virtual reality are also two new emerging technologies, which by 2022 will take a bigger role across various sectors with robots being implemented by almost 37% of the surveyed companies. (WEF, 2016)
This increase in the use of technology and robotization will inevitably lead to an increase in the automation of task performance reducing the need for many workers who, due to this shift, will have become redundant. Almost 50% of companies consider this to be the case, while 38% believe that this shift will open up opportunities for new roles for their workers and create new prospects through retraining. Furthermore, in 2018, 71% of task hours were performed by humans while the rest 29% by machines. This number is expected to significantly drop by 2022, when it is expected for machines to take over a larger share of task performance, covering more than 42% of task hours as opposed to 58% of task hours covered by humans. Due to the very rapid technological advancements in computers and robotics, even the tasks, which as of now are solely performed by humans (research, coordination, advising, managing), by 2022 will have become partially automated with reasoning and decision-making being the most automated tasks. (WEF, 2016)
On the other hand, due to this swift, introduction of progressive technologies and automation of tasks, by 2022 there will be a surge in new and emerging professions aimed at supporting, programming, managing and maintaining the newly employed technology, thus offsetting the decline in jobs in other sectors. According to the World Economic Forum, the estimated percentage of jobs that will become redundant is 10% as opposed to the 11% increase in new emerging professions.
Some of the roles whose demand will significantly increase by 2022 and onwards are data analysts and scientists, e-commerce and social media specialists, as well as software and application developers – positions based on the use of technology. Other roles, which are also expected to increase, are those that cannot be automated and those include customer service workers, innovation managers, sales and marketing professionals, as well as roles connected with training and development. The new roles expected to emerge recently due to the rapid digitalization are related to the understanding of latest technologies such as: artificial intelligence specialists, big data specialists, information security analysts, robotics engineers and block chain specialists. (The Wealth of Humans, 2016)
Due to these new trends in business models and rapid introduction of advanced technologies in the workspace, a shift in the required skillsets is expected. By 2022, almost 54% of all employees will require considerable upskilling and of those, around 35% will need further training of up to six months. Furthermore, 9% will require reskilling lasting six to 12 months, while 10% will require additional skills training of more than a year according to the World Economic Forum report. Some skills that will still be in highest demand are analytical and innovative thinking, active learning and learning strategies. Expertise in new technologies will still be relevant moving forward, however, innately “human” skills such as creativity, originality and initiative, critical thinking, persuasion and negotiation will unquestionably remain crucial, as will as attention to detail, resilience, flexibility and complex problem solving.
Nevertheless, the most important step toward addressing this shift in doing business is how companies and employers address the change. There are three strategic plans that companies can implement in order to keep up with the change in technological progress: (1) hire a new set of employees already equipped with the skills necessary to perform a task, (2) find a way to automate the tasks which need to be performed and (3) retrain the existing set of employees.
According to the conclusions of the World Economic Forum, the chance of businesses retraining their employees is the smallest, while hiring already equipped teams is the preferred strategy of choice, with two thirds of all interviewed companies expecting their employees to adapt and pick up the necessary skills along the way on their own.
As with any other change and technological revolution, there are unpredictable variables which must be taken into consideration and governments, industries and workers must work together in order to meet the demands of this new time of almost unlimited opportunity. Technological progress is changing the outlook of the labor market and the skills needed to join and persist in it are ever growing. The concept of lifelong and divergent learning, as well as retraining of individuals supported and enabled by government and companies remains the biggest challenge. Additionally, companies are relying on specific talent and freelance job arrangements, imposing the risk of polarization and disproportionate task delegation, creating a huge gap between old skill and new talent. This inequality will be visible in both pay and job prospects, so the issue that must be addressed is how the workers who lag behind in training and skill will be protected and adequately retrained so that they do not become obsolete.
Governments must address the effect of new technology on the job market and protect the workers by enabling state-funded or aided retraining of workers, updating the school curricula to match the demands of the newly digitalized market and providing specific vocational training according to the needs of the market.
Companies will have to discover a way to be more inclusive in terms of finding available talent to join the teams, as well as refitting its current workers with the skills necessary to perform the new tasks in order to narrow the gap between these two types of workers, and thus reducing polarization and inequality.
Finally, workers must be proactive in investing in their own lifelong learning and career development, following the latest trends in their industry and asking for support from both employers and government in terms of providing the opportunities and means for retraining and upskilling.
The main goal would be for these three sectors to work together and devise a plan to address this swift change in the business sector by adequately planning and regulating the need for new competences, in order to ensure the security and success of both the businesses and the workers.
As technological progress is changing the landscape of business and task performance is increasingly moving towards automation, we have an unprecedented opportunity to seize this new age of computerization and improve both the quality of life and work, by performing tasks more quickly, efficiently and correctly. However, businesses must not lose sight of the fact that all these new technologies are invented by people, in order to simplify task performance and reduce energy, cost and labor expenditure. Good management is essential in order to navigate these new waters competently. Leaders who recognize not only the benefits of technology, but also the indispensability of people are crucial. By implementing all the latest technologies and ensuring that workers are treated fairly, compensated accordingly and provided with all the relevant opportunities for personal growth and development, companies have a real opportunity to successfully join the Fourth Industrial Revolution and pave the way for sustainable and all-inclusive businesses in the 21st Century.
1. World Economic Forum, the Future of Jobs: Employment, Skills and Workforce Strategy for the Fourth Industrial Revolution, 2016.
2. Avent, Ryan, The Wealth of Humans: Work and its Absence in the Twenty first Century, Penguin, 2016.