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The future of work: impact of automation on graduate jobs

May 2022

Research shows that demand for graduates with digital skills will further increase following the growth of artificial intelligence

The late 1990's was the start of an era characterised by the spread of automation and digitisation as we saw a shift from mechanical and analogue electronic technology to digital electronics. A shift which led to significant changes in the workplace and the economy.

We now find ourselves amid another significant transformation as digitisation becomes more widespread. Moreover, not only is it becoming more widespread, but these processes are now being enhanced with smart, autonomous systems fueled by data and artificial intelligence (AI) i.e., machine learning, deep learning etc.

As these systems become more sophisticated, people are becoming increasingly more concerned about the displacement of workers by technology. Thus far, we have only seen the impact that automation has had on 'blue-collar' jobs, but as computers make progress in areas like information ordering, memorisation, perceptual speed, and deductive reasoning, the fear is that high-skilled, 'white-collar' jobs will begin to be affected by technology as well.1,2 A phenomenon which can have a significant impact on the graduate labour market.

Should workers fear automation?

Many have predicted that the effects of AI and automation on the labour market will be drastic, with one influential study from 2013 suggesting that 47% of U.S. workers will see their jobs become automated within a decade or two of publishing.3

However, there is a split among economists regarding the impact that AI and robotics will have on the labour market. For instance, a study that asked 1,896 experts about this impact found that 48 percent believe that robots and digital agents would displace significant numbers of both 'blue' and 'white' collar workers. On the other hand, 52% expect that technology will create more jobs than it displaces.4

In a recent talk with Dirk Pilat, Deputy Director of the OECD Directorate for Science, Technology and Innovation, Jim Bessen suggests that predictions which assert that we will see widespread unemployment as a result of AI replacing humans are massively overblown. Referring to the aforementioned study (Frey and Osborne, 2013), he makes the point that we are already at the ten year mark of their prediction and AI has had nowhere near the impact on jobs as predicted. In fact, less than 4% of US jobs have become automated during that time.

Instead, the available research has seen AI enhance human capabilities, not replace them. Although some tasks that humans may perform in a particular job are automatable, this does not necessarily mean that there will be less work for humans to do. To the contrary, the research shows that as one task is automated, the value of human skills on the remaining tasks become even more important, causing greater demand for those skills.5

In support, Glenda Quintini, Senior Economist in Skills Analysis and Policy of the OECD Directorate for Employment, Labour and Social Affairs suggests that instead of automating jobs, technology will 'change tasks and be complimentary to workers, or potentially augment their capabilities, which means that workers will need to train to be able to work with these technologies'.6

In the past skills were taught in school and it was hoped that they would last a lifetime; however, we need to adopt a different approach to learning and develop new ways of retraining and upskilling people

Skills needed to work alongside new technologies

This doesn't mean that there will not be any job losses because of AI and automation. Some workers will have to switch occupations and gain new skills, which will be a burden for some. Research in the Netherlands found that those who lost their jobs because of automation did undergo periods of unemployment.7

A finding which emphasises the importance of lifelong learning. In the past skills were taught in school and it was hoped that they would last a lifetime; however, we need to adopt a different approach to learning and develop new ways of retraining and upskilling people.

If workers are equipped with the skills to work alongside AI effectively, higher exposure to AI technologies can be a good thing. As recent OECD research indicates, workers with strong digital skills are well set to adapt to working alongside AI.8 Therefore, it is vital that graduates leave university with the skills to work with new technologies.

Emerging and declining job roles
Growing demand Decreasing demand
Data Analysts and ScientistsData Entry Clerks
AI and Machine Learning SpecialistsAccounting, Bookkeeping and Payroll Clerks
Big Data SpecialistsAdministrative and Executive Secretaries
Internet of Things SpecialistsAccountants and Auditors
Digital Transformation SpecialistsGeneral and Operations Managers
Process Automation SpecialistsClient Information and Customer Service Workers
Information Security AnalystsAssembly and Factory Workers
FinTech EngineersBusiness Services and Administration Managers
Database and Network ProfessionalsStatistical, Finance and Insurance Clerks
Business Development ProfessionalsBank Tellers and Related ClerksTechnology

Source: World Economic Forum Future of Jobs Report 2020

Of course, these include IT skills such as programming, big data management and machine learning or modelling skills, three skills found to be lacking amongst the EU workforce.9 But, as firms invest in major technology systems, skills demand grows across the board, in fact, the demand for industry specific skills - as well as soft and social skills - tends to increase the most.10

Emerging skills
Skills in high demand
Active learning and learning strategies
Analytical thinking and innovation
Creativity, originality and initiative
Complex problem-solving
Critical thinking and analysis
Emotional intelligence
Resilience, stress tolerance and flexibility
Leadership and social influence
Technology design and programming
Reasoning, problem-solving and ideation

Source: World Economic Forum Future of Jobs Report 2020

It is not only important for graduates who come from a technical background to develop soft skills, but it is also important that graduates from a non-technical background acquire digital skills - whether that be through university programmes like Q-step which delivers quantitative skills training to social science graduates or through learning platforms such as LinkedIn learning and FutureLearn.

The government's role in lifelong learning

Currently, enterprises are the main provider of training for workers; however, Glenda Quintini suggests that the amount of training that they are able provide is often below what would be optimal for the economy.11 Additionally, research suggests that many employers have not been proactive in their efforts to upskill or retrain employees, with research finding that 88% of workplaces have not engaged in any digital skills training for employees - many indicating that this is due to the high cost.12

For this reason, it is important for governments to intervene and increase the amount of training that is provided. Projects such as the OECD project on Work, Innovation, Productivity and Skills (WIPS) are building the evidence base for policy makers to act on. Governments can use their findings to identify policies that can maximise the benefits while addressing some of the risks and challenges associated with AI.13 Policies that will not only support workers who may need to move to different jobs by upskilling and reskilling, but also policies that will help enterprises to upskill their employees.

Encouragingly, the UK Government have been proactive in this regard. Last year the Government released their Skills for Jobs White Paper which sets out their plans to 'reform further education so it supports people to get the skills our economy needs throughout their lives'.14 There are also more localised initiatives; as an example, The Growth Company have been commissioned by the Greater Manchester Combined Authority to help 4,000 SMEs across Greater Manchester to reskill their workforces.15

Notes:

  1. Artificial Intelligence and Employment NEW EVIDENCE FROM OCCUPATIONS MOST EXPOSED TO AI, OECD, 2021.
  2. The ethics of artificial intelligence: Issues and initiatives, European Parliamentary Research Service, 2020.
  3. The Future of Employment: How Susceptible Are Jobs to Computerisation?, Frey and Osborne, 2013.
  4. The ethics of artificial intelligence: Issues and initiatives, European Parliamentary Research Service, 2020.
  5. Conversation with Jim Bessen on AI, Innovation, Productivity, and Work, OECD, 2022.
  6. Training for AI adoption in enterprises, OECD, 2022.
  7. Conversation with Jim Bessen on AI, Innovation, Productivity, and Work, OECD, 2022.
  8. Artificial Intelligence and Employment NEW EVIDENCE FROM OCCUPATIONS MOST EXPOSED TO AI, OECD, 2021.
  9. AI activity in UK businesses, Department for Digital, Culture, Media, and Sport, 2022.
  10. Conversation with Jim Bessen on AI, Innovation, Productivity, and Work, OECD, 2022.
  11. Training for AI adoption in enterprises, OECD, 2022.
  12. Collaboration is key to addressing digital skills gap, Luminate, 2021.
  13. Shaping coherent policies for AI, OECD, 2022.
  14. Skills for Jobs: Lifelong Learning for Opportunity and Growth, Department for Education, 2021
  15. Collaboration is key to addressing digital skills gap, Luminate, 2021.

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