By Rohit Talwar

The world is experiencing an unprecedented rate of technologically-driven disruption – adding weight to the proposition that humanity will see more change in the next 20 to 25 years than the last 200. Although a critical driver, it is important to realise that exponential science and technology developments (e.g. Internet of Things, Big Data, artificial intelligence (AI), robotics) exist within the context of other disruptive drivers:

• A shift from physical to digital mindsets
• Linear versus exponential business thinking
• Human versus machine
• Potential for major shifts in employment patterns
• Financial stress driving new economic thinking
• Migration from central control to distributed – e.g. digital currencies, Blockchain, and cryptocontracts
• New industries emerging
• Desire for trust and transparency
• Social structures and political governance models at a crossroads.

While technological change is a constant factor across all these drivers, let’s home in on how exponential technology development could impact the future of business and work.

Research into the future of work

There have been several studies into the possible impact of automation – mostly through AI and robotics – on jobs and employment. There are a range of perspectives, but looking across the studies, the broad consensus is that something significant will happen – and arguably is already happening – to the jobs market. We can see evidence now that many jobs – or task components within jobs – will be automated. The questions are, which jobs? What proportion of existing jobs? What and how many new jobs will new economic activity create? The choice we have as a society is to take action now to prepare the ground work for a range of different responses, to prepare for a complex and uncertain future world of work, or to do nothing and face increasing complexity and potentially a widening wealth / poverty gap that could have grave consequences for the fabric of our society.

We would like to highlight the different range of perspectives on the potential job impacts arising from four significant studies:

1. Pew Research (2014) – AI, Robotics, and the Future of Jobs

This posed the question, ‘Will networked, automated, AI, and robotic devices have displaced more jobs than they have created by 2025?’

48% of respondents said robots and digital agents will displace significant numbers of blue- and white-collar workers – anticipating this could lead to increased income inequality, significant numbers of unemployable people, and breakdowns in social order. However, 52% argued the reverse – with the assumption that lost jobs will be more than offset by our ingenuity to create new occupations and industries. While a more optimistic scenario, the caveat is that current social structures (e.g. education) are not preparing people for the skills needed in the future job market.

While we don’t have space to explore the answers here, the study also examined key societal issues – e.g. could automation provide the opportunity for humanity to reassess society’s relationship to employment? Could it give people time for leisure, self-improvement, or to spend time with loved ones?

2. The McKinsey Global Institute (MGI) report (2016) – Artificial intelligence: The impact on jobs – Automation and anxiety (referring a to 2013 study on the Future of Employment by Carl Benedikt Frey and Michael Osborne of the Oxford Martin School).

This MGI report cited the 2013 Oxford Martin study – which identified that 47% of workers in USA had jobs at high risk of potential automation and suggesting the key sectors likely to be impacted included transport and logistics (taxi and delivery drivers); sales and services (cashiers, counter and rental clerks, telemarketers and accountants); and office support functions (receptionists and security guards). The equivalent ratios in the UK and Japan were 35% and 49% of the workforce, respectively. Complex services and creativity represent significant components of UK economic activity for example, and are thought to be more resilient in the face of increasing automation.

3. McKinsey Global Institute briefing note – Fortune Vatican Forum (2016) Technology, Jobs, and the Future of Work

MGI considered 2,000+ work activities across 54 countries representing 95% of global GDP. Their more optimistic scenario suggested less than 5% of jobs can be fully automated by adapting currently demonstrated technology, although for middle-skill categories it could rise to 20%. MGI estimated that at least 30% activities across 60% of all jobs are automatable based on current technologies.

Automation technologies were predicted to affect up to 49% of the global economy – 1.1 billion employees and $12.7 trillion in wages. China, India, Japan, and the USA account for more than half of these totals. This research suggested it would be two decades at least, before automation reaches 50% of all of today’s work activities.

4. World Economic Forum (2016) – The Future of Jobs, Employment, Skills and Workforce Strategy for the Fourth Industrial Revolution.

This research examines an increasingly dynamic jobs landscape. The headline finding is that 65% of children entering primary school today will work in job types that don’t yet exist. Here the estimate is that 3.5 time as many jobs will be lost to disruptive labour market changes by the turn of the decade than are created.

The study anticipates losses in routine white-collar office functions, and gains in computing, mathematics, architecture, and engineering. Related fields and functions expected to become critically important by 2020 include: data analysts (leveraging big data and AI); specialized sales representatives (commercializing and articulating new business propositions); and senior management and leadership (to steer companies through upcoming change and disruption).

The research points to a re-balancing in skills requirements. Social skills — such as persuasion, emotional intelligence, and teaching others—will be in higher demand across industries than narrow technical skills, such as programming or equipment operation and control.

Exponential businesses

Based on Moore’s Law (which suggests that the amount of computer power we can buy for $1000 doubles every two years), we like to consider how similar thinking can create exponential organisations.

These organisations develop their thinking and new business propositions rapidly and seek to disrupt the markets they operate in. They are asking if technology can radically change what they do, what else they can change to solve problems faster, and reframing the way they think about problems, solutions, and opportunities. They are changing the personality of their organisation, posing the question, ‘Should we play by the rules of the game or change the game?’ Staying still – taking no action – is normally tantamount to going backwards. Classic examples would include simple changes like parallel loading bays allowing multiple people to pass through airline security in parallel, through to game changing disruptors such Broad Group in China erecting 57 story buildings in just 19 days, Local Motors – 3D printed cars designed at one thousandth of the cost of traditional manufacturers, and Airbnb handling 80 timers more bedrooms per employee than they typical hotel group.

Future Skills and Leadership Challenges

Clearly there’s a challenge here. Many of us like to work in a world that is calm, stable, and predictable – but the new reality is very different. The world is changing ever faster, so we need to become proficient at working with uncertainty, with complexity, in a world where change is increasingly rapid, where solutions are unclear and even the issue is not well defined. We are heading into a world of wicked problems that will require ‘Extraordinary Leadership’ rather than ‘Ordinary Management.’

The leadership and management style required when working in uncertain situations can be challenging. For Ordinary Management, we apply accepted best practice approaches; it’s the domain of tame problems and technical challenges. But for the increasingly disruption filled world we are heading into, we require Extraordinary Leadership where issues are difficult or impossible to solve because of incomplete, contradictory, and changing requirements that are often difficult to recognize. In this realm, a new skill set will be critical, including:

• Foresight
• Curiosity
• Sense making
• Accelerated learning
• Tolerance of uncertainty
• Scenario thinking
• Coping with complexity
• Social awareness
• Mentoring.

Questions for Leaders

• So our questions for IT leaders – and leaders across the organisation – are:
• What is it that the customer values in their interaction with your business; the products and services you offer?
• What are the issues for your business in serving current customers in existing markets, existing customers in new markets, new customers in existing markets, and new customers in new markets?
• Automation is often targeted at operational efficiency, but what are the critical technologies that could help the business deliver against rapidly evolving customer value expectations?
• What are the implications of the choices you might make on your business model? Do you want to play by the rules of the existing game, or create a new game?
• How will companies balance the need for efficiency through automation and their social responsibility as an employer?
• How will your leadership help to take your colleagues with you, especially through a period of exponential change?

Image: https://pixabay.com/illustrations/science-fiction-sci-fi-future-751758/