About 50% of all jobs that exist today could already be automated with existing technology. This sobering statistic from global management consulting firm McKinsey raises a number of questions about job security against the backdrop of the Fourth Industrial Revolution. But fear not: mass unemployment is just one of the myths associated with the future of work.
In this article, Investec dispels five myths about the future of work – but first, also listen to two recent podcasts on how companies and employees are adapting to the digital era.
In part one, Investec’s head of organisational development and human resources, Marc Kahn, and a host of other experts talk about what the workplace of the future could look like.
Myth 1: Automation will take away our jobs
Tech replacing jobs is nothing new; it has been a major cause for concern in all of the previous industrial revolutions. But, as history shows, new technology has the power to create as much work as it displaces.
“If you look at any 10-year period, in most economies, developed and developing, something like 10% of the occupations are ones that didn’t exist in the previous 10-year period,” says James Manyika, director of the McKinsey Global Institute, the firm’s business and economics research arm.
On a macro level, technology grows the number of jobs because it increases productivity, which drives economic growth and creates new jobs and entire new industries like online shopping.
Uber drivers, web designers, 3D printing technicians, social media managers – these are all completely new jobs we didn’t dream of when we were growing up.
“Some occupations decline, but many others actually grow and rise, and quite often, many that grow and rise are ones we could never imagine,” says Manyika.
What is changing in this new era is that the kinds of jobs we’re automating are no longer only physical work but also what Manyika calls “knowledge work” – cognitive tasks such as image recognition and data analysis.
Myth 2: Your industry won’t be disrupted
Unicorns – start-ups valued at $1bn or more – are no longer rare. There are more than 300 unicorns disrupting everything from healthcare to financial services, manufacturing, food and travel, and the number is growing rapidly.
“You might think that in your industry you’re safe; that there’s no way that digital technology or exponential technology is going to disrupt you. But I’ll tell you, people in food thought that, and people in taxis thought there’s no way they’d be disrupted by cellphones; but of course, they have been. So, you might be too.”
Sage words from renowned futurist Ramez Naam, who spoke at the recent SingularityU South Africa Summit. History is littered with examples of companies and industries caught unawares by technologically advanced challengers. Don’t let your company be one of them.
Myth 3: You need an innovation hub to innovate
While individuals may be concerned about their own prospects, companies are grappling with how they can keep up with the explosion of technology that is already disrupting industries globally. The response from corporates has been a proliferation of innovation hubs and incubators on the periphery of the company.
Investec’s Marc Kahn believes innovation doesn’t happen in the confines of a hub.
“You want to create a total and holistic environmental shift for the entire organisation … that innovation is the primary task of the normal course of work on a day-to-day basis, and that’s the real challenge. You don’t do that by stripping out innovation and putting it in a separate place, because that means the innovation doesn’t happen in the main and it de-authorises the ability to innovate if you aren’t in that box.”
To make the whole company a hotbed of innovation, Kahn believes failure needs to be tolerated and hierarchy demolished.
“Rule number one for future workplaces is that failure is an option. So, you need to create an environment that tolerates risk more, not unlike a start-up, and that has in place mechanisms to manage failure and encourage experimentation,” he says.
“Hierarchy is death to innovation,” adds Kahn, because it stifles bottom-up innovation. Instead, ideas from all areas of the business should be encouraged and rewarded.
Myth 4: The gig economy is a threat to employers
Far from being a threat to companies, employers themselves could become the biggest beneficiaries of the gig economy – a labour market made up of freelance, short-term, flexible, on-demand work. More than a third (36%) of US workers are foregoing the nine-to-five workday to perform more lucrative “gigs” and about 15.6% of the UK’s workforce are giggers. This challenges the notions of employer loyalty, company culture and institutional memory, but it also opens up possibilities for businesses to save money on benefits, office space and training, and makes getting the best talent more affordable.
Kahn believes the gig economy is fuelling a revolution in the definition of what a company is. A business is real by virtue of its people and assets, he says, “but what if all the people employed in the company are employed as gigs? Where is the company?
“We start thinking about capability, and capability becomes detached from an individual and it becomes a commodity that’s moving around in a free-flowing environment. People cluster together in sensible ways and then uncluster and reconnect in various gigs to deliver a very agile value chain,” explains Kahn.
This, he says, is all “loosely coordinated by a leadership function without too much management control, but enough to manage the risk in a very fluid environment”.
Myth 5: You will have one career your entire life
Job-hopping will become the new normal. Millennials today will hold four jobs by the time they are 30 years old – twice the number of job changes than Generation Xers, says a report from LinkedIn.
Investec spoke to 25-year-old Stacey Ferreira, a San Francisco-based tech entrepreneur who has held four different jobs since she was 18. She says continuous learning is the best way to prepare yourself for the future of work. “We need to continue to learn about new things, so that 20 years from now, we aren’t saying, ‘Oh, I don’t know anything about this new technology that exists.’ We’ve actually kept up with it.”
Kahn says: “Instead of thinking about a career in a particular craft that you have for 30 years, you need to think about being multi-skilled, independent and massively flexible in as many different working environments as possible.”