Digitization is bringing about huge changes in the labor market, but the representatives of politics and society should identify the opportunities involved, instead of worrying about the risks.
- Why it is essential for governments to understand the implications of digitization.
- What is needed to make change in the world of work as humane as possible
- Why culture has to keep up with technological progress
A new era is just beginning – an era in which factories will manage themselves and intelligent systems will check contracts or even make medical diagnoses. Machines will no longer simply help workers to improve their productivity; instead, they will become extremely smart workers themselves. Intelligent systems that are networked with anything that can be networked form the nucleus of a global structural change that will affect all areas of our lives. Therefore, we are inevitably faced with questions such as: What will work be like in the future? What opportunities will it offer? What risks will it involve? While some people regard digitization as the job creator of the future, others fear that it will lead to an increase in precarious employment relationships.
Only one thing is currently clear. In the new era, intelligent systems will increasingly be able to replace workers.
What can and must we do to adapt to this change in direction? Firstly we can resist the urge to demonize digitization and see it as part of the problem. Instead of attempting to bring the transformation process to a standstill, representatives from the worlds of politics and society should be actively accelerating it and taking appropriate measures to support it. Any organization that is aiming for success on global markets must make the most of the opportunities that the digital world has to offer.
A look back into the past shows that it is only the developments made in recent decades that have given the majority of the world’s population access to clean drinking water. In addition, mortality rates have fallen and many people have been lifted out of extreme poverty. Only by making progress will we find the inspiration we need to solve even more difficult and complex problems. The failure of new technologies to become widely adopted exposes us to much greater risks than their rapid spread. In order to prevent this from happening, we need to act quickly. From a position of strength we can identify and resolve new challenges. This will lead to the start of a new era.
I worked with colleagues from PwC to come up with the following ideas about what specific actions we as a society need to take in order to manage the transformation of the labor market. We shared these ideas with representatives of major universities and think tanks from all over the world at the T20 summit in Berlin. The following recommendations were fed into the G20 summit:
Establish a “Foresight Institute”
Governments must make a strategic response to the complexity of digital change and to black swans. These are events that are unpredictable and that observers and participants are totally unprepared for. To achieve this, state bodies need to use appropriate technologies in a similar way to companies. This is particularly relevant in relation to the question of how citizens want to live in future. My recommendation to the G20 was to establish a “Foresight Institute” on a global level that will also make available research expertise on a local level in order to be able to resolve specific local problems on the spot, depending on the situation.
„We must overcome the urge to slow down and regulate technological progress.“
Machines that work autonomously, also known as silver collar workers, a new term that was coined during the preparation of our briefing, will increasingly turn the labor market on its head. Where machines and processes can operate in complete autonomy, people will no longer be needed. At the same time, new complex tasks will emerge that machines cannot perform, together with tasks that require intuitive abilities of the kind that can only be offered by people. Investing in research into labor markets using big data analytics will be an important step forward that will enable cities and communities to make the right investment decisions in this area, with the aim of supporting specific education and training programs and creating investment incentives for businesses and startups.
Another decisive factor will be the interaction between people and machines. There were no social media managers or chief digital officers 15 years ago and in just the same way companies will have to come up with new and creative job descriptions in future. The transition to closely networked cooperation between humans and machines will not necessarily be smooth. In the light of questions such as “Is a self-driving car really safe?” and “What about the security of our data on the network?” it is already clear that this radical upheaval will not be a pleasant experience for everyone.
Ethical standards for the human-machine collaboration
In order to ensure that the transformation of the world of work is as people-friendly as possible, it makes sense to include training in technical skills as part of school and university education. Similarly, ethical standards for the cooperation between people and machines must be put in place, together with open access to the global labor market to enable employees to investigate all vacancies worldwide.
The only way to increase global prosperity is to speed up progress rather than regulating it, despite the fact that rapid technological developments can make us feel as if we have lost control. We must overcome the urge to slow down and direct technological progress. The obvious answer to the question of how we can reduce anxiety levels is by investing in research and development in universities and small private companies that can create new jobs that will increase prosperity. It is equally important to fund long-term and/or high-risk research and development projects because these are not normally as attractive to private companies and rarely receive support.
Finally, in the search for the best way of dealing with the challenges of digitization we must not forget one thing: apparent contradictions need to be resolved. Technology is developing quickly, but our culture needs sufficient time to adapt to new circumstances. Companies and government bodies must take a long-term, far-sighted approach. At the same time they must ensure that they adjust to the changing environment. The critical success factor is to continue focusing on these two apparently contradictory objectives and, at the same time, to put in place the measures described above in order to provide effective support and guidance for the change process. Only then will we all be able to look to the future with confidence.
Photo credit: Mark Bridger/GettyImages, PwC