The head of the federal government’s foresight agency says identifying the skills that workers will need in the future, as jobs rapidly change or disappear completely, is one of the toughest challenges policy-makers have in front of them.
Kristel Van der Elst, executive head of Policy Horizons, said artificial intelligence and automation’s impact on the nature of work is an issue confounding researchers and governments around the world.
“We have an idea, but what (skills) are actually needed is the biggest question,” said Van der Elst, who is also the CEO of the Global Foresight Group.
“A lot of organizations are struggling with that big question and a lot of innovation is needed there…It is the nut that needs to be cracked in the coming years to efficiently be able to bring people from the old economy into the new economy.”
In its recent report The Future of Work: Five Game Changers, Policy Horizons identifies these five “game changers, “which could transform work, the very character of the economy and social programs underpinning the economy.
The shift from long-term and time-based to temporary and task-based work
A big game changer ─ the shift from long-term and time-based to temporary and task-based work ─ is already underway. Jobs are increasingly broken into tasks to be done by gig workers. Some predict the number of contract workers could soon equal that of full-time employees.
Van der Elst said these bundles of tasks could be bought and sold on digital labour platforms, where workers are paid piecemeal for the tasks rather than through salaries or hourly rates for actual time spent doing the work.
This shift may widen the income inequality gap, posing many policy challenges for decision-makers to wrestle with. Why would employers hire permanent employees when they can use freelancers, contractors and temp agency workers without the cost of training, pensions and benefits?
With fewer traditional employees, contributions to social programs would shrink. Lower labour costs could drive down prices, which would leave those with jobs feeling they have more buying power – even if wages don’t increase – than those who lose employment.
Where people work and earn may not be where they live and spend
Van der Elst said the game-changer that’s getting the least attention is the ripple-effect of people working and earning in places other than where they live and spend. With online gig work platforms, telepresence and automation, Canadians can work from anywhere.
It’s already happening with writing and graphic design jobs, which are bundled into freelance tasks bought and sold on online platforms. Another report found Canada is already among the largest suppliers and demanders of online labour on task platforms.
In the resource and agricultural industries, advances in robotics, virtual reality, and in mixed reality (where virtual objects are combined with the real world) could reduce the need for people to be physically at the job site.
In Rio Tinto’s mine of the future, iron ore is extracted from a mine by autonomous machines supervised by crews thousands of miles away. Autonomous trucks and trains haul materials and drilling systems allow a single person to operate multiple rigs from one location.
If people aren’t working in remote or small towns near mines or other projects, there will no longer be a need for grocery stores, hairdressers and all the other secondary businesses that created a local economy around an industry.
Advanced telepresence technologies allow people and machines to work together, regardless of geography. This could open up domestic mining to global markets, attracting workers from countries with lower standards of living than Canada and drive down wages. Some US states are offering teleworkers incentives to move – Vermont is offering $10,000 to workers to relocate there.
As well, governments will need to consider how they will collect income taxes from citizens who are working online for companies in other countries, and how to apply consumption taxes to digital goods and services.
Finally, because they may not be able to sell communities on the jobs and economic spinoffs of major projects, resource industries will have to find new ways of winning support locally.
Automation could erode employment before it replaces entire jobs
Van der Elst said AI and automation could put people out of work long before technology replaces entire types of jobs. Even the most complex jobs can be broken down into many discrete tasks, which will cumulatively reduce demand for human labour.
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On top of that, companies are redesigning their workplaces for robots instead of for humans, which will further boost the process of automation. Some new grocery warehouses, for example, have eliminated shelves built for people and instead have robots moving along tracks and reaching into deep storage bins. Van der Elst said an automated function in one industry will quickly be adopted by another and, in no time, a complete line of work could disappear.
AI decreases the scarcity of knowledge workers
AI could spell an end to the shortage of knowledge workers, those in the “thinking professions.” Firms using AI for accounting or managing data, for example, could expand their capacity at little or no cost without hiring and training new staff. This opens the door to jobless growth, where firms are updating or expanding AI without hiring knowledge workers and creating jobs. And Van der Elst said another risk is all that jobless growth could benefit “megafirms,” which have massive reservoirs of data for AI. “That is something that will have to be carefully looked at,” she said.
Digital technologies reduce need for human intermediaries
What happens if technology replaces the need for people to facilitate transactions or agreements? These are the people who bring trust, assurance or security to transactions, such as lawyers and bankers. Blockchain technology can handle payments and secure contracts; AI can negotiate terms and place orders; automated factories with 3-D printing can make custom products on demand; automated logistics can deliver the products. All faster and cheaper.
Many professionals working as intermediaries in finance, law and brokering could see their jobs disappear, which will redefine the professions and how they are accredited.
What skills do we need?
How quickly these changes happen and how many jobs will be partly or entirely displaced is unclear. The bigger mystery is what skills will be needed for the work that remains, or whether new and existing skills will be combined to create new jobs, and if so how.
In its research, McKinsey Global Institute compared this reskilling challenge to the shift from the agricultural to the manufacturing economy. And depending on the speed and scale of the transition, the report said, some countries indicate they may need “initiatives on the scale of the Marshall Plan,” which helped rebuild Western Europe after the Second World War.
In previous workforce transformations, people who lost their jobs benefited from an increase in demand for other skills and work, which created new jobs. People in one declining industry often found similar work in another. Over time wages adjusted, workers got new skills, and higher incomes created a demand for more goods and services.
“However, the future skills and mindsets needed for these [future] jobs remain unclear. Even if these become clear, developing them among unemployed workers may require substantial time and money. It may even prove impossible for some,” said the Policy Horizons report.
Van der Elst said part of the problem is that it is easier to imagine the tasks technology can replace than to imagine what skills will be needed for the work that remains. The operator who is using virtual reality technology to remotely drill a mine thousands of miles away could require cognitive skills and aptitudes that are different from those needed by someone who is physically working at the site.
She said there is broad agreement that a mix of skills will be needed. There will be a demand for people with technical skills such as coders and data scientists, as well as those with leadership and entrepreneurial skills. It’s expected that the demand for human or soft skills, such as caring, creativity, problem-solving, innovation and critical- thinking, will also grow as mundane tasks are displaced.
But, she said, “how much of that and who would qualify or be trained in those categories is the big question.”
The issue will have to be tackled collaboratively and is being studied in partnerships among governments, businesses, educators and workers. Unions expect to play a new and important role in helping workers bridge their skills gaps.
Justin Trudeau’s government created the Future Skills Centre and the Future Skills Council to get Canada prepared for the jobs of tomorrow, committing $225 million over four years and $75 million after that.
The Liberals also promised reforms to better protect gig workers, but it’s unclear how that will unfold with a minority government. The report of an expert panel on modernizing federal labour standards, which was expected in July 2019, has not yet been released. The Prime Minister’s mandate letter for Labour Minister Filomena Tassi included the directive to “Develop greater labour protections for people who work through digital platforms, whose status is not clearly covered by provincial or federal laws.”
Photo: Shutterstock, by Rawpixel.com.
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