400 million workers could be displaced by 2030.
Reskilling is shaping up to be an imperative—and perhaps the imperative—of the next decade. That is because as machines increasingly complement people in the workplace, automation will bring about major shifts in both occupations and skills.
We estimate that if the pace of automation adoption is in the midpoint of our range of scenarios, about 15% of the global workforce, or 400 million workers, will be displaced by 2030. (That range stretches from almost nobody, if automation adoption is slow, to 800 million, in the event of very rapid automation).
At the same time, as new technologies and the productivity gains they bring generate additional labor demand, many jobs will be created; based on historical precedent, we expect 8 to 9% of 2030’s labor supply will be in new jobs we cannot yet foresee. On top of that, we have estimated that between 555 million and 890 million jobs could be created by 2030 from select catalysts. This includes rising incomes (especially in emerging economies), which generates spending and higher consumption, which in turn creates additional labor demand to supply consumers with those products.
Overall, we expect there will be enough work to ensure full employment, with the gains offsetting the losses under most scenarios. But the transition will be jarring.
Millions of people will need to change occupational categories by 2030. We predict that if the pace of automation adoption is in the middle of our range, that’ll be between 3% of the global workforce—or about 75 million people—and 14%— or 375 million people—if automation adoption is very rapid.
Our skill sets will need to change. Basic digital skills will be essential for all, and advanced tech skills such as programming will be at a premium. Our latest research at McKinsey suggests that technological skills could see a 55% increase in demand by 2030. Social, emotional, and higher cognitive skills, such as creativity, critical thinking, and complex information processing, will also see growing demand. Physical and manual skills will be less needed but will nonetheless remain the single largest category of workforce skills in many countries.
Shifts in skills and occupations are not new. In the 19th century Industrial Revolution in Europe and the U.S., unskilled workers who learned to operate steam-engine-powered machines put skilled artisans such as master weavers out of work. Fifty years ago, nurses administered medicines and cared for patients—today they conduct basic diagnostic tests and analyze the results, allowing them to undertake the tasks doctors did a half-century ago. Every new technology brings its share of changes. What is different this time is that the shifts are accelerating. People need to learn—and continue learning—if they are to keep pace with the changing labor scene.
Companies will have an essential role to play in retraining, either by offering in-house programs (as firms such as SAP are doing), or by contracting with external educational providers (as AT&T has been doing). Walmart has set up more than 100 “academies” in the U.S. that provide classroom and hands-on training for positions, including customer service managers. Business leaders tell us that they believe having the right talent in place will be critical to their future prosperity.
Governments have a significant role to play, too. This includes working with schools and colleges to make sure that curricula are adapted to the needs of tomorrow. We see an urgent need for more STEM skills, but also a new emphasis on creativity, critical and systems thinking, and adaptive and life-long learning. We will also need to find new ways to invest in human capital: Reversing the trend of low—and, in some countries, declining—public investment in worker training is critical.
Lifelong learning isn’t exactly a new idea, of course. What is different this time is the extensive nature of the skill shifts we anticipate, which will affect so many sectors and occupations, and at a pace we have not yet seen. Putting in place a well thought-out talent strategy that addresses the skills of today and the needs of tomorrow will therefore not just be a “nice-to-have” for companies: It could well become a decisive factor for success. The chief HR officer within a company could well become as important as the chief financial officer.
Reskilling comes with a price, but it is a price worth paying. We should not seek to roll back or slow diffusion of automation—in fact, these technologies will create the economic surpluses that will help societies manage workforce transitions. We therefore need to make sure that workers everywhere have the tools and the skills they need to thrive in the new automation era: an era in which adaptability and continuous learning will be the keys to success.