The EIU: What will be the biggest trend affecting the future of work in the next 10-15 years?
Ian Stewart: The speed of innovation in business technology and the organisation of work will be the biggest disruptor. It is where there is the most angst. But it is also where there is perhaps the greatest opportunity as the economy slowly recovers. Developments in technology and work structure will do what they have always done: simultaneously disrupt existing industries and destroy jobs, raise GDP and create entirely new categories of work.
Some people take a pessimistic view and believe that work posts will be in decline, given the increased capacity of machines. They see employment and salaries being suppressed. The former US Treasury secretary, Larry Summers, has described technological change as the largest challenge for capitalism, and two prominent Oxford academics, Michael Osborne and Carl Frey, estimate that in the next two decades 47% of US jobs are at risk from computerisation.
I subscribe to the alternative view. The debate has become overly apocalyptic. Technology has always been seen as a threat to jobs, but it has also been the principal agent of improved human welfare.
The jobs that seem most likely to survive and thrive are those that require flexibility, creativity and social intelligence. Now theres clearly a risk that much of the benefit of technology could accrue to a relatively small proportion of the population some sort of skills or cognitive super elite. I think one of the great challenges for society will be to ensure that the benefits of technological progress are widely shared.
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AutomAted disruptionIan Stewart, chief economist at Deloitte, believes the accelerating pace of technology innovation will have the biggest impact on work in the coming decadesThe nature and organisation of work will be shaped by a multitude of factors including economic, technological and demographic in the coming decades.
Speaking to The Economist Intelligence Unit (EIU), Ian Stewart, chief economist at professional services firm Deloitte, explains why he believes the pace of technological innovation will have the greatest impact of all, especially the automation of work.
But while some experts fear that the acceleration of automation will necessarily lead to widespread unemployment, Mr Stewart is confident that as it has in the past technology will also give rise to new modes of work and new economic opportunities.
What will change, he believes, are the qualities that will prove most valuable to businesses. As repetitive and linear tasks are computerised, judgment, creativity and emotional intelligence will be the key skills of tomorrow.
This interview is part of an investigation into the future of work by The Economist intelligence Unit, sponsored by Ricoh Europe. For more, visit http://bit.ly/eiufuturework Ian Stewart
What is the effect on salaries and workers rights?
The experience of the last quarter of a century points to what is likely to happen. Experience, judgment, creativity and emotional intelligence are likely to be well remunerated.
Manufacturing employment is likely to continue shrinking. The long-term shift to services will continue. Some of this will be in sectors that have been in a secular uptrend for many years: education, health, professional and business services, and leisure.
The effects of technological change and rising real incomes are unpredictable. They will probably generate strong growth in some very small sectors and create entirely new and as yet unthought-of sectors. Who, for instance, could have predicted 30 years ago the explosive growth of gyms, coffee shops or different forms of therapy?
The challenge for policy will be to ensure that those who lose out from change, or those with fewer skills, are helped and protected.
How will the workforce change?
What were seeing in the UK is an increasingly diverse workforce, with a higher proportion of women employed, more foreign-born workers, more elderly people working and more flexible types of working.
Employers should expect the workforce to continue changing, and they will need to accommodate the evolving expectations. We are seeing this already. Today, a record 37% of the workforce are either self-employed or working part-time. And since 2010, over 60% of jobs have gone to those aged over 50.
In future, people will have extended working lives, reflecting improved longevity and better healthcare. Job changes will be more frequent and career shifts less unusual. People are likely to take more time out for childcare and family responsibilities, for sabbaticals, training and voluntary work.
Numerous factors are intertwined here. In the West, public health and welfare entitlements, especially for the elderly, are running ahead of the capacity and willingness of the state to pay. Governments are locked into a long-term process of fiscal consolidation.
The interaction of declining state provision of benefits and longer lifespans points to longer working lives and a rise in private-sector savings. The provision of benefits to employees, including for healthcare and pensions, will be a key source of comparative advantage for those seeking the best people.
What will be the impact of globalisation?
One of the big changes in many major markets is the increased internationalisation of the workforce. In the UK, for example, the enlargement of the European Union has created an influx of new employees in the last ten years. That seems likely to be a permanent change.
Since the start of the labour market recovery in 2010 the UK has seen total employment grow by 1.6m to a record 30.4m people. Half of the increase has come from immigration.
The effect of migration on wages, GDP and the employment prospects of UK-born workers is much debated. Everything depends on the type of work undertaken and the volume of migration. In the UK, immigration has been a supply shock, pushing the labour supply curve to the right and creating a pool of skilled and energetic workers. This may well have put some downward pressure on wages in certain sectors.
Technology has always been seen as a threat to jobs, but it has also been the principal agent of improved human welfare
Ian Stewart Deloitte
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