The Risks of Automation Displacing Workers

In this blog, as well as my college courses, I’ve been raising the issues of how important it is for young people to focus on the power of automation to displace some workers, while also transforming industries and creating new jobs/careers. This is key inforamtion for young people making education decisions, and advisors (and parents) trying to guide them.

McKinsey & Company , in its July 2016 Quarterly magazine, began reporting on a study that analyzed 2000+ work activities for more than 800 occupations to help us understand where the greatest risks are.

They discovered that current demonstrated technologies could automate 45% of the activities people are paid to perform and that 60% of all curatesion could see 30% or more of their constitutent activities automated.

They discovered that automation will depend on five factors:

  • Technical feasibility,
  • Costs to automate,
  • The relative scarcity, skills and cost of workers who otherwise might do the activtiy;
  • Benefits (e.g. superior performance of automation vs. labor-costs)
  • Regulatory and social-acceptance.

The most automatable activites are those in which human activities are predictable. These including physical activites (e.g., moving things) and operating machinery in a predictable environment. Overall this is about 20% of what takes place in the US workplace, with much of it taking place in manaufacturing, food service, accomodations, and retailing. Less susceptible (for now) are activities which require cognitive and social skill decisions which are not predictable and require judgement and emotional intelligence. For instance, they calculated that 47% of a retail sales’ person’s activites have the techical potential to be automated, compared to 86% for bookeepers, accountants and auditors.

The takeaway: part of everyone’s job is automatable today and will increasingly be vulnerable if they are predictable and “easier” to do by machines; even more will become susceptible as algorithms for making decisions are developed. Advanced banking, which requires risk assessments based on more than numbers, such as character and potential, will need people, while “teller” jobs will continue to be replaced by ATMs and online banking. Future job risks will remain smaller for those work aspects which require creative decision-making.  For students seeking careers, the wise path is to find industries, careers and jobs, in which they can develop their “irreplaceable” skills and specialize in them, using technology to handle the automatable parts of their jobs.

What’s your experience with automation replacing jobs?  What do you think the future holds? Share with us your views.

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