The World Economic Forum released its “The Future of Jobs Report 2023”. It explores how jobs and skills will evolve over the next five years. This analysis of employer expectations is designed to provide insights into how socio-economic and technology trends will shape the workplace of the future.
Source: World Economic Forum
In 2023 economic, health, and geopolitical trends have created divergent outcomes for labour markets globally. While tight labour markets are prevalent in high-income countries, low- and lower-middle-income countries continue to see higher unemployment than before the pandemic. On an individual level, labour market outcomes are also diverging, as workers with only basic education and women face lower employment levels. At the same time, real wages are declining as a result of an ongoing cost of living crisis, and changing worker expectations and concerns about the quality of work are becoming more prominent issues globally.
The World Economic Forum report brings together the perspective of 803 companies – collectively employing more than 11.3 million workers – across 27 industry clusters and 45 economies from all world regions. The survey covers questions about macroeconomic and technology trends, their impact on jobs, their impact on skills, and the workforce transformation strategies businesses plan to use, across the 2023-2027 timeframe.
What are some of the Report’s conclusions?
Technology adoption will remain a key driver of business transformation in the next five years. Over 85% of organisations surveyed identify increased adoption of new and frontier technologies and broadening digital access as the trends most likely to drive transformation in their organisation.
Broader application of Environmental, Social, and Governance (ESG) standards within their organisations will also have a significant impact.
The next most-impactful trends are macroeconomic: the rising cost of living and slower economic growth.
The impact of investments to drive the green transition was judged to be the sixth-most impactful macro trend, followed by supply shortages and consumer expectations around social and environmental issues.
Within technology adoption, big data, cloud computing, and artificial intelligence (AI ) feature highly on likelihood of adoption. More than 75% of companies are looking to adopt these technologies in the next five years.
The data also shows the impact of the digitalisation of commerce and trade. Digital platforms and apps are the technologies most likely to be adopted, with 86% of companies expecting to incorporate them into their operations in the next five years. E-commerce and digital trade are expected to be adopted by 75% of businesses.
Education and workforce technologies ranked second, with 81% of companies looking to adopt such technologies by 2027. The adoption of robots, power storage technology, and distributed ledger technologies rank lower on the list.
The impact of most technologies on jobs is expected to be a net positive over the next five years. Big data analytics, climate change and environmental management technologies, and encryption and cybersecurity are expected to be the biggest drivers of job growth.
Agriculture technologies, digital platforms and apps, e-commerce, digital trade, and AI are all expected to result in significant labour market disruption, with substantial proportions of companies forecasting job displacement in their organisations, offset by job growth elsewhere to result in a net positive. All but two technologies are expected to be net job creators in the next five years: humanoid robots and non-humanoid robots.
Today, respondents have revised down their expectations for future automation to predict that 42% of business tasks will be automated by 2027. Task automation in 2027 is expected to vary from 35% of reasoning and decision-making to 65% of information and data processing.
But while expectations of the displacement of physical and manual work by machines has decreased, reasoning, communicating, and coordinating – all traits with a comparative advantage for humans – are expected to be more automatable in the future. AI, a key driver of potential algorithmic displacement, is expected to be adopted by nearly 75% of surveyed companies and is expected to lead to high churn – with 50% of organisations expecting it to create job growth and 25% expecting it to create job losses.
The skills that companies report to be increasing in importance the fastest are not always reflected in corporate upskilling strategies. Beyond the top-ranked cognitive skills are two skills that companies prioritise much more highly than would appear according to their current importance to their workforce: AI and big data as well as leadership and social influence.
Companies rank AI and big data higher in their skills strategies than in their evaluation of core skills, and report that they will invest an estimated 9% of their reskilling efforts in it – a greater proportion than the more highly-ranked creative thinking, indicating that though AI and big data is part of fewer strategies, it tends to be a more essential element when it is included.
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