Short-term shocks and long-term trends
Over centuries, technological, social, and political transformations have shaped economies and the capacity of individuals to make a living. The first and second Industrial Revolutions displaced trades that had thrived on older technologies and gave rise to new machines, new ways of work, and new demand for skill sets that could harness the power of steam, coal, and factory production. The transformation of production has consequently given rise to new professions and new ways of working that eventually paved the path to greater prosperity despite initial job displacement among individuals. Although in 2018 we proposed that the labor market impact of the Fourth Industrial Revolution can be managed while maintaining stable levels of employment, the current 2020 global recession has created a ‘new normal in which short term and long-term disruptions are intertwined.
A significant volume of research has been published on the future of work since the World Economic Forum published its first edition. To date, the conclusions drawn from that body of literature appear to offer both hope and caution. The twin forces of technology and globalization have brought profound transformations to labor markets in the near term.
Few analysts propose that technological disruption will lead to shrinking opportunities in the aggregate, three and many of the insights gathered point to the emergence of new job opportunities. Across countries and supply chains, research has evidenced rising demand for employment in nonroutine analytics jobs accompanied by significant automation of routine manual jobs.
Empirically, these changes can be observed in data tracking employment trends in the United States between 2007–2018. The evidence indicates that nearly 2.6 million jobs were displaced over a decade. Roles that are being replaced, namely Computer Operators, Administrative Assistants, Filing Clerks, Data Entry Keyers, Payroll Clerks, and other such functions which depend on technologies and work processes which are fast becoming obsolete.
In late 2019, the gradual onset of the future of work—mainly due to automation, technology, and globalization—appeared to pose the most significant risk to labor market stability. The first half of 2020 has seen an additional, substantial, and unexpected disruption to labor markets, with immediate knock-on effects on the livelihoods of individuals and the household incomes of families.
The COVID-19 pandemic appears to be deepening existing inequalities across labor markets, to have reversed the gain in employment made since the Global Financial Crisis in 2007–2008, and to have accelerated the arrival of the future of work. The changes heralded by the COVID-19 pandemic have compounded the long-term changes already triggered by the Fourth Industrial Revolution, which has, consequently, increased in velocity and depth. In reaction to the risk to life caused by the spread of the COVID-19 virus, governments have legislated full or partial closures of business operations, causing a sharp shock to economies, societies, and labor markets. Many businesses have closed their physical office locations and have faced limitations in doing business face-to-face. Figure 2 shows the trajectory of those closures. In mid-March and by mid-April, nearly 55% of economies (about 100 countries) had enacted workplace closures that affected all but essential businesses.
During May and June, economies resumed some in-person business operations—yet limitations to the physical function of business continue, geographic mobility between countries persist, and the consumption patterns of individuals have been dramatically altered. By late June 2020, about 5% of countries globally still mandated a full closure of in-person business operations, and only about 23% of countries were entirely back to open.
Next time of Part III of The Future Of Jobs will be looking at life-preserving measures in the workplace to halt the spread of Covid-19.
Missed Part I? Read it here