Davos Report: Deconstructing the Future Workforce

As part of its overarching theme “Mastering the Fourth Industrial Revolution,” the World Economic Forum (WEF) in Davos raised the issue of the impact of a plethora of disruptive technologies on the workforce of the future. It is probably not surprising that most of the news headlines coming out of this topic in Davos focused on the suggestion that more than 5 million jobs will be lost by 2020, through the advance of technologies encompassing artificial intelligence, IoT and 3-D printing. However, beyond the headlines, the research report that provided these data points should be seen as a critical reference for around which to discuss the journey into As-a-Service Economy and for the implications of Intelligent Automation.

In many ways, the WEF report builds on McKinsey’s seminal study “Disruptive Technologies” from 2013. That report continues to be broadly referenced in discussions on digital transformation but equally in the much smaller community of Intelligent Automation. This is largely because the study had modeled the economic impact of those technologies including through the displacement of jobs. The WEF report extends this approach through a set of global surveys. This is meant to allow a more precise analysis by sector and country as well as more realistic timelines in which this fundamental transformation is set to manifest itself. However, the authors of the study were acutely aware of how the results could be interpreted in the public sphere: “While some jobs are threatened by redundancy and others grow rapidly, existing jobs are also going through a change in the skill sets required to do them. The debate on these transformations is often polarized between those who foresee limitless new opportunities and those that foresee massive dislocation of jobs. In fact, the reality is highly specific to the industry, region and occupation in question as well as the ability of various stakeholders to manage change.”

This polarization resulted in almost all the headlines in the mainstream media focusing on the figure of 5 million jobs to be lost to “robots” (as a placeholder for that set of disruptive technologies). At the same time, the authors of the WEF stated–somewhat surprisingly–that artificial intelligence and machine learning would only have a modest impact on job losses by 2020, as those technologies are not yet advanced enough. The polarization also meant that some of strong thought leadership that came from roundtables organized in particular by IT companies, didn’t reach a broader audience. For instance, Andrew McAfee, Professor at MIT, warned that we need to retool our education systems and philosophies as this change won’t come tomorrow. At the same time we have to figure out how to give people more embedded and give them faster skill acquisition techniques so that they can get into work even if they have been displaced.

The discussions in and around WEF underlined yet again that the discussions on the transformation of knowledge work and the “Future Workforce” at large, should not be about but with employees and stakeholders representing them. Only by having transparent discussions will organizations be successful in adapting to those disruptive technologies. A recent HfS Webinar with ANZ Bank demonstrated how transparency was critical for the eventual success of an Intelligent Automation project. Crucially, for IT service providers and consultancies the advisory work on these both fundamental and disruptive changes should be paid for work and not just thought-leadership and pre-sales.

The impact of this transformation is starting to affect the discussions with shareholders and financial analysts, as we predicted. Wipro outlined in its Q3 2016 earnings call that next-generation initiatives, including its Holmes cognitive platform, led to the release of 4,300 FTEs. In a tweak from earlier statements, Wipro suggested that those employees would be retrained. While this is in all likelihood just part of the story as employees are likely also to be made redundant, the question is what skills are relevant for Wipro’s “Future Workforce”?

If anything, this and the other examples underline that we need a transparent debate now as the fundamental changes are already affecting workforces around the globe.