From McKinsey & Company
In an era marked by rapid advances in automation and artificial intelligence, new research assesses the jobs lost and jobs gained under different scenarios through 2030.
The technology-driven world in which we live is a world filled with promise but also challenges. Cars that drive themselves, machines that read X-rays, and algorithms that respond to customer-service inquiries are all manifestations of powerful new forms of automation. Yet even as these technologies increase productivity and improve our lives, their use will substitute for some work activitieshumans currently perform—a development that has sparked much public concern.
Building on our January 2017 report on automation, McKinsey Global Institute’s latest report, Jobs lost, jobs gained: Workforce transitions in a time of automation (PDF–5MB), assesses the number and types of jobs that might be created under different scenarios through 2030 and compares that to the jobs that could be lost to automation.
The results reveal a rich mosaic of potential shifts in occupations in the years ahead, with important implications for workforce skills and wages. Our key finding is that while there may be enough work to maintain full employment to 2030 under most scenarios, the transitions will be very challenging—matching or even exceeding the scale of shifts out of agriculture and manufacturing we have seen in the past.
- What impact will automation have on work?
- What are possible scenarios for employment growth?
- Will there be enough work in the future?
- What will automation mean for skills and wages?
- How do we manage the upcoming workforce transitions?
1. What impact will automation have on work?
We previously found that about half the activities people are paid to do globally could theoretically be automated using currently demonstrated technologies. Very few occupations—less than 5 percent—consist of activities that can be fully automated.
However, in about 60 percent of occupations, at least one-third of the constituent activities could be automated, implying substantial workplace transformations and changes for all workers.
While technical feasibility of automation is important, it is not the only factor that will influence the pace and extent of automation adoption. Other factors include the cost of developing and deploying automation solutions for specific uses in the workplace, the labor-market dynamics (including quality and quantity of labor and associated wages), the benefits of automation beyond labor substitution, and regulatory and social acceptance.
Taking these factors into account, our new research estimates that between almost zero and 30 percent of the hours worked globally could be automated by 2030, depending on the speed of adoption. We mainly use the midpoint of our scenario range, which is automation of 15 percent of current activities. Results differ significantly by country, reflecting the mix of activities currently performed by workers and prevailing wage rates.
The potential impact of automation on employment varies by occupation and sector (see interactive above). Activities most susceptible to automation include physical ones in predictable environments, such as operating machinery and preparing fast food. Collecting and processing data are two other categories of activities that increasingly can be done better and faster with machines. This could displace large amounts of labor—for instance, in mortgage origination, paralegal work, accounting, and back-office transaction processing.
It is important to note, however, that even when some tasks are automated, employment in those occupations may not decline but rather workers may perform new tasks.
Automation will have a lesser effect on jobs that involve managing people, applying expertise, and social interactions, where machines are unable to match human performance for now.
Jobs in unpredictable environments—occupations such as gardeners, plumbers, or providers of child- and eldercare—will also generally see less automation by 2030, because they are technically difficult to automate and often command relatively lower wages, which makes automation a less attractive business proposition.
2. What are possible scenarios for employment growth?
Workers displaced by automation are easily identified, while new jobs that are created indirectly from technology are less visible and spread across different sectors and geographies. We model some potential sources of new labor demand that may spur job creation to 2030, even net of automation.
For the first three trends, we model only a trendline scenario based on current spending and investment trends observed across countries.
Rising incomes and consumption, especially in emerging economies
We have previously estimated that global consumption could grow by $23 trillion between 2015 and 2030, and most of this will come from the consuming classes in emerging economies. The effects of these new consumers will be felt not just in the countries where the income is generated but also in economies that export to these countries. Globally, we estimate that 250 million to 280 million new jobs could be created from the impact of rising incomes on consumer goods alone, with up to an additional 50 million to 85 million jobs generated from higher health and education spending.
By 2030, there will be at least 300 million more people aged 65 years and olderthan there were in 2014. As people age, their spending patterns shift, with a pronounced increase in spending on healthcare and other personal services. This will create significant new demand for a range of occupations, including doctors, nurses, and health technicians but also home-health aides, personal-care aides, and nursing assistants in many countries. Globally, we estimate that healthcare and related jobs from aging could grow by 50 million to 85 million by 2030.
Development and deployment of technology
Jobs related to developing and deploying new technologies may also grow. Overall spending on technology could increase by more than 50 percent between 2015 and 2030. About half would be on information-technology services. The number of people employed in these occupations is small compared to those in healthcare or construction, but they are high-wage occupations. By 2030, we estimate that this trend could create 20 million to 50 million jobs globally.
For the next three trends, we model both a trendline scenario and a step-up scenario that assumes additional investments in some areas, based on explicit choices by governments, business leaders, and individuals to create additional jobs.
Investments in infrastructure and buildings
Infrastructure and buildings are two areas of historic underspending that may create significant additional labor demand if action is taken to bridge infrastructure gaps and overcome housing shortages. New demand could be created for up to 80 million jobs in the trendline scenario and, in the event of accelerated investment, up to 200 million more in the step-up scenario. These jobs include architects, engineers, electricians, carpenters, and other skilled tradespeople, as well as construction workers.
Investments in renewable energy, energy efficiency, and climate adaptation
Investments in renewable energy, such as wind and solar; energy-efficiency technologies; and adaptation and mitigation of climate change may create new demand for workers in a range of occupations, including manufacturing, construction, and installation. These investments could create up to ten million new jobs in the trendline scenario and up to ten million additional jobs globally in the step-up scenario.
‘Marketization’ of previously unpaid domestic work
The last trend we consider is the potential to pay for services that substitute for currently unpaid and primarily domestic work. This so-called marketization of previously unpaid work is already prevalent in advanced economies, and rising female workforce participation worldwide could accelerate the trend. We estimate that this could create 50 million to 90 million jobs globally, mainly in occupations such as childcare, early-childhood education, cleaning, cooking, and gardening.
When we look at the net changes in job growth across all countries, the categories with the highest percentage job growth net of automation include the following:
- healthcare providers
- professionals such as engineers, scientists, accountants, and analysts
- IT professionals and other technology specialists
- managers and executives, whose work cannot easily be replaced by machines
- educators, especially in emerging economies with young populations
- “creatives,” a small but growing category of artists, performers, and entertainers who will be in demand as rising incomes create more demand for leisure and recreation
- builders and related professions, particularly in the scenario that involves higher investments in infrastructure and buildings
- manual and service jobs in unpredictable environments, such as home-health aides and gardeners