Some 66,000 industrial robots were imported to China last year. This is only one-quarter of all robots being manufactured in 2016. Industrial robots as we know are no longer dumb, single-purpose apparatuses. Those smart machines are now able to perform ferly complex industrial processing tasks and one may do what 15 or more employees could do at the same time. That means potentially replacing 4,000,000 current human jobs in one year. And there are many more to come. What would you do if one of those jobs were yours?
By 2019, according to the International Federation of Robotics, some 1.4 million new industrial robots will be installed in factories around the world. Moreover, the adoption will become even more dynamic. Since they are, just like other computers, becoming programmable platforms they may carry out a wide range of increasingly complex tasks. And not only those we assume being low-skilled, generalist and repetitive. Professional specializations that have been evolving and meticulously advanced over centuries, such as legal counseling or medical experts like neurosurgeons – all over sudden may become replicated with a software application and an industrial robot.
At this moment, China is still way behind countries such as Germany and Sweden in terms of its robot adoption rate and density (the number of robots per 10,000 human workers). Sweden has already a robot density of 200. China set its target to 150, which means a strategic goal of growing up to 650,000 robots by 2019. That’s equivalent of nearly 10 million jobs, or 21 million human jobs being replaced by machines in just two years by 2019. Industrial robots may become 20% cheaper over the next five years and 20-30% more efficient, according to a report by Boston Consulting. Especially when China itself starts manufacturing and selling robots at the global market. Thanks to Moore’s Law and other comparable IT norms, robots can only get smarter, faster, more efficient, and cheaper, and will eventually begin building and upgrading themselves – without requiring sick leaves, taking vacations and being off through holidays, or starting and caring about family (yet!).
However, even this is not the full scale of the challenge and impact it may have to human society – or the business opportunity, depending on the perspective. The rise of the machines, as a process, will happen across a huge range of industries and human activities. Robotics, drones, smart IoT devices, and self-driving vehicles are already transforming trade, social and health care, critical infrastructure maintenance, transport, law enforcement, military operations, and many more. And of course, robots can be software too, often enhanced by a mix of AI, big data, machine learning and analytics, they may run back and front-office processes that automate business functions in sectors as diverse as media, financial and legal services and enterprise asset management. Therefore, it is not only low-priced blue-collar jobs that are falling to the machines, but also well-paid white-collar careers and a wide variety of post-industrial services jobs, like the ones in call-centers. What happens to local employment around the globe if millions of call-center workers are replaced by chatbots?
All of these represent a real challenge to the developed, service dependent, economies but even more to those labor-intensive developing economies that are struggling to create new human jobs and wealth, and help millions rise out of rural poverty. What if there will be no new human jobs to create – at least in manufacturing? In addition, what happens when the robots would start farming? Is the reality and future so crude for humans? Despite all of the above, robotics, AI, and automation are not the economic or social zero sum game associating some blur and even apocalyptic outlook for the entire human race. The wide majority of the respected economist today argue that any technology that labor use efficiently will ultimately lead to raised productivity. That will generate, they say, demand for new products and services and will in turn create new jobs, eventually for the displaced workers as well. It is quite true that previous technological innovations have been always delivering long-term employment in the past. Nevertheless, is it going to be the same in the future?
Not so, if we are going to neglect and underestimate the nature of those trends, and fail to create alternative human jobs and open up opportunities for new types of lean, smart business that come along with the digital economy. In doing so, organizations and governments need start working early on and focus more on deploying those new technologies strategically, with ambition to enhance and complement human society, rather than tactically sweep people aside and reduce public costs. This is where both businesses and governments, need to take it seriously and work closer together, especially when it comes to education.
As reported in the 2017 Deloitte Global Human Capital Trends, businesses are not taken by surprise but share current uneasiness with the pace and disruptive nature of this technological revolution. In 1980s, rapid rise in computing power resulted in deployment of automated teller machines, online systems, and the IT industry’s rapid growth. The companies have adapted well as workers swiftly gained new skills and absorbed new jobs. Today, a fundamentally new set of digital business and working skills are required as context for the workforce, workplace and world of work have changed dramatically. Traditional concepts of manufacturing, manual labor, and even ownership have being swept aside by a wave of “creative destruction”. As discussed in this report, beyond skills as such, companies would need to focus much more on career strategies, talent mobility, healthier organizational ecosystems and networks to facilitate both individual and organizational reinvention. The problem is not simply one of “reskilling” or planning new and better careers. Instead, organizations will have to look at leadership, structures, diversity, technology, and the overall employee experience in radically new and innovative ways.
At the same time, kids starting school this year will graduate into jobs markets substantially different from the ones we know today. As emerging technologies may have revolutionized supply chains and manufacturing, people around the globe are predicted to be older and live and work more in cities. Trends like globalization, demographic change, environmental sustainability, urbanization, increasing inequality and political uncertainty will continue to shape the context. Businesses enabled by big data, robotics, the IoT, and 3D printing will become more personalized, automated and local, since a single prototype would be as simple to be reproduced in millions finished products. In effect, people and machines capable of machine learning will work hand-in-hand. Trends like these have impact on all kinds of knowledge, occupations and skills that will be in demand in 2030. However, shifting skills into new required roles while fostering human talent will also have huge implications and will require transformation of both learning and educational institutions.
Trends aforementioned seem at first like a massive object hitting traditional global business through sheer force of gravity. It is going to challenge ageing industrial strategies, manufacturing on a massive scale, global supply chains, waste, and those focused on cost, rather than diffused, personalized and localized innovation. That is for sure an opportunity to exploit. But the old world will not stop when the new one starts. The reality of transition is going to be messy, unpredictable, complex, and full of legacy as much as promise. It is an opportunity for a new smart, sustainable and industrialized world that is emerging both on its peripheries as in the center. We need to think today about directing this wave of creative destruction towards human societal advantage and sustainable, more ethical development, and not just towards narrow, short-term ‘shift’.