McKinsey & Co: Report on future work and the impact on global productivity
From McKinsey Global Institute, January 1, 2017
A recent report released by McKinsey Global Institute (MGI) - “A Future That Works: Automation, Employment and Productivity” - analyses the automation potential of the global economy, the factors that will determine the pace and extent of workplace adoption, and the economic impact associated with its potential.
MGI believe automation will give a much-needed boost to productivity, resulting in economic growth and prosperity that will help offset the declining share of the working-age population in many countries. They note, however, that people will need to continue working alongside machines to produce the desired growth in per capita GDP, and they make the assumption that people displaced by automation will find other employment.
The report includes the prediction that more occupations will change than will be automated away. MGI estimates that while less than 5% of occupations can be automated entirely, about 60% of occupations have at least 30% of activities that could be automated.
MGI report that ultimately technical, economic and social factors will determine the pace and extent of automation. Their scenarios suggest that half of today’s work activities could be automated by 2055, but this could happen up to 20 years earlier or later.
Challenges lie ahead for policy-makers. MGI believe they should embrace the opportunity and develop policies to encourage investment and market incentives to encourage progress and innovation. However, policy-makers must evolve and innovate policies that help workers and institutions adapt to the impact on employment. This will include rethinking education and training, income support and safety nets, as well as transition support for those dislocated. Individuals in the workplace will need to engage more comprehensively with machines as part of their everyday activities, and acquire new skills that will be in demand in the new age.