There can be sufficient job creation to offset the impact of automation
THE world of work is in a state of flux. With the advent of digital, you can now conduct work activities just as comfortably by a pool in Bali, as you would in a skyscraper in Raffles Place. Companies such as Grab and Amazon have spurred a rise in independent workers participating actively in the gig economy.
Advances in automation, artificial intelligence (AI), and robotics now promise to further transform the world of work but have raised deep concern. Doomsday scenarios about mass unemployment associated with the rise of the machine are all too common - but the reality is likely more nuanced, and less negative.
Many of the technologies we employ in our daily lives would have seemed unimaginable a mere decade ago. Virtual and augmented reality, AI and big data analytics are transforming workplaces. Their deployment will, without doubt, have a significant impact on jobs, skills, and wages, disrupting many workers and requiring millions to transition into new occupations and change their work practices. But in the long term, they also promise higher efficiency, more productivity, more safety and convenience. The key to making automation a success is adapting to the change that is coming.
On the face of it, the prospect of widespread automation sounds worrisome. According to research by the McKinsey Global Institute (MGI), the economic and business research arm of McKinsey & Company, in about 60 per cent of occupations, at least one-third of the constituent activities could be automated by 2030 based on currently demonstrated technologies. In Singapore, estimates show about 24 per cent of work activities in the Republic could be impacted by 2030.
However, MGI found that it is not entire jobs that are likely to be automated, but constituent activities within them. In less than 5 per cent of occupations can entire activities be fully automated.
If history is a guide, up to 9 per cent of 2030 labour demand will be for jobs that did not exist before - in the way that social media managers and search engine optimisation specialists did not exist a mere decade ago.
Overall, we take the view that with sufficient growth, innovation, and investment - and retraining and upskilling - there can be sufficient job creation to offset the impact of automation. Although automation may seem intimidating, there is no benefit in businesses and governments burying their heads in the sand.
Automation is coming because of its power to raise productivity - globally by up to 1.4 per cent a year, MGI finds. Beyond productivity, AI - where machines or software mimic human behaviour and intelligence - has the power to help us tackle daunting problems from cancer to climate change. Countries that do not embrace AI could find themselves at a disadvantage.
The private sector needs to step up too, by reskilling workers or redesigning jobs to enable employees to move into higher value-added roles in the company rather than being displaced by automation. It is in companies' interests not to simply use automation as an efficiency tool, but to use it creatively to innovate new products and services.
Changi Airport is an example of a forward-looking employer with plans to redesign or create 8,000 jobs by 2025, with more positions for professionals, technicians, and cabin crew, and to ramp up the use of technology such as robotics to ease physically demanding and manual tasks in airport operations.
The challenges of reskilling and job redesign - alongside the cost of investing in automation technologies upfront and redesigning business processes - are significant, but so is the payoff.
Being forward-thinking and creative about how our lives are organised and valued in the future is key, but more so now as we move towards a new reality - where the role and meaning of work have started to shift.
