CEOs Need to Make These Two Investment Decisions as Automation Gains Pace

Companies should bear two “crucial” investment decisions in mind as they prepare for the impact of automation on the world of work, according to the World Economic Forum (WEF)’s The Future of Jobs Report 2018 [PDF] published on Monday.

In its analysis of 12 industries representing 15 million employees, WEF suggests that companies should consider the question of whether to prioritise automation or augmentation to prepare for the future of work – and carefully analyse whether where it is worth investing in reskilling their workforces.

While some forecasts predict the replacement of a human workforce in favour of automation, companies should instead consider the viability of a company “augmentation strategy”, WEF has said.

This involves businesses using technology to “complement and enhance” the strengths of a human workforce to achieve a competitive advantage, rather than focusing on more comprehensive automation-based strategies as a way to achieve cost savings.

Augmentation Will Allow Workers to Better Use Their “Distinctly Human Talents”

Such an augmentation strategy will free human workers of the need to perform repetitive job roles – the likes of which are more under threat of being replaced by automation – and be better able to use their “distinctly human talents,” WEF said.

Simon Aldous, head of EMEA Channels at Dropbox UK, corroborated this view, saying that the role of emerging technologies will be to remove repetitive tasks and admin work, letting employees focus on more “meaningful and creative tasks”.

“By taking a more holistic approach to the future of work, a man-machine partnership will open up a new realm of possibilities for organisations,” he said.

“When considering the ever increasing rise in multi-faceted jobs, which makes the need for a balance between human interaction and technology vital, it’s easier to see how AI is less likely to replace us and more likely to enhance the way we work.”

Automation May Erode Wages

The second crucial investment decision, according to the report, is whether or not companies should invest in workforce reskilling, outlining the “potentially divergent” impact of the introduction of automation technology and taking into consideration whether an employee’s job tasks and skill sets would benefit from such a strategy.

Furthermore, workers lacking appropriate skills to adapt to new technologies, such as those incorporated in a company-wide automation strategy, may see wages and job quality suppressed as technology is “steadily eroding the value of their job”.

Elsewhere in the report, WEF said that the proportion of “redundant roles” in the workforce will decrease from 31 percent in 2018 to 21 percent in 2022, while “stable roles” will stay the same over the period, at 48 percent.

Job roles that utlise human skills such as creativity, critical thinking, persuasion, and negotiation — such as customer services, sales and marketing, software and app development, and ecommerce and social media — will see increasing demand, WEF adds.

Future of Jobs: Redundant and Stable Roles

“Routine-based, middle-skilled white collar roles”, including data entry clerks, telemarketers, door-to-door sales workers, and even lawyers were at the greatest risk of their jobs becoming “redundant”, the WEF warned.

WEF also said that by 2022, 38 percent of businesses it surveyed expect to extend their workforce to new productivity-enhancing roles.

While overall job losses are expected to be offset by job gains, there will be a shift in quality, location, format, and permanency of new roles, it added.

“As new technology adoption builds momentum, companies feel competitive pressures similar to the way they felt compelled to create global supply chains in the 1990s and 2000s,” the report says. “Trends effecting business leaders’ decision environments are prompting a wide range of company responses that collectively shape the future of jobs.

“While individual companies may not have the option to disconnect their corporate strategy from the fundamental trajectory of these trends, such as the unfolding Fourth Industrial Revolution, they do, however, have the possibility of formulating a proactive response.”

PwC revealed on Tuesday that in China alone, AI and related technologies could create around 90 million more jobs than they displace over the next 20 years.

AI and related technologies including robots, drones, and autonomous vehicles, could provide a net boost to employment in the country of around 12 percent in that time period, it said.