Is Your Job at Risk of Automation?
KEY POINTS
We must prepare for the 3 waves of automation
Robots and artificial intelligence will destroy some jobs while creating different jobs in new industries
Certain skills can reduce your risk to automation
AUTOMATION
Does the mere mention of the word send a shiver down your spine?
We read the scary headlines. We watch automation methodically eliminate jobs and careers that our family, friends, and community have spent a lifetime training for and investing in. One day you are gainfully employed: the next, you are unemployed. Worse yet, you may remain unemployable until you upgrade your skills.
Redundancy via automation can be swift and brutal.
Automation with Perspective
Before we get too dire, let’s pause and consider that the world has oscillated between fear and skepticism for centuries when faced with the threat of automation.
We have survived and thrived while embracing automation. We highlight the following noteworthy historical events: invention of steam engines, internal combustion engines, industrialized factories, electricity, microprocessors, computers, robotics, artificial intelligence, and self-driving automobiles.
The key is to realize that we continue to survive and thrive. Yes, automation will continuously eliminate a noticeable number of jobs. However, new industries will emerge and drive growth in new types of jobs. These newly created jobs will generate a positive ripple effect (multiplier effect in economic terms) that supports further job creation.
These historical references should give us comfort from a global perspective that automation will not necessarily devastate the global workforce. However, it is not risks to the global workforce that keep us up at night. We all want to know:
Will automation eliminate my job?
Automation Potential vs. Likelihood
Before we try to answer that question, we must address a concept that is vital when discussing the statics that follow.
The potential job losses highlighted below are based on the forecasted technological capability to automate such jobs. Actual results may vary substantially from estimates due to various factors including regulations, environmental impact, legal, political, societal acceptance, etc.
The 2013 study performed by University of Oxford’s Oxford Martin School is a good example of how important it is to interpret the nature of the data correctly.
In 2013, the paper noted “47% of U.S. jobs were automatable from a technological capabilities point of view between 2010-2030” ².
In effect, 47% of jobs could face automation; however, such a degree of job losses was not guaranteed or forecasted.
The media interpreted the paper to claim 47% of jobs would be automated by 2030. They further claimed the estimates were wildly inaccurate as actual results from 2010 to present are not tracking to reach 47% by 2030 (the U.S. Bureau of Labor Statistics validates that the U.S. is not tracking towards 47%³). Unfortunately, such groups misinterpreted the premise of the 2013 paper.
To clarify, the remainder of this article will highlight jobs that are at risk of automation.
Three Waves of Automation
PwC released a comprehensive paper (the “PwC Paper” ¹) that breaks down the automation timeline into three overlapping waves that stretch into the 2030s.
The three waves are defined as follows:
1st Wave - Algorithm
“This wave is currently underway and is primarily an automation of simple computational tasks and analysis of structured data. This includes manually conducting mathematical calculations or using basic software packages and internet searches” ¹.
2nd Wave - Augmentation
“This wave will emerge during the 2020s. It will see a more dynamic change to how routine and repeatable job tasks are conducted (e.g., filling out forms). It is also likely to see a decreased need for many programming languages as repeatable programmable tasks are increasingly automated, and through machines themselves building and designing learning algorithms. There will be further advances in robotics, although generally these will not be fully autonomous and will require human assistance to augment their capabilities” ¹.
3rd Wave - Autonomy
“This wave is expected to emerge on an economy-wide scale in the 2030s, even though some of the technologies are being piloted now. It will see artificial intelligence and robotics further automate routine tasks, but also those tasks that involve physical labor or manual dexterity. Problem solving will increasingly extend from analytical modelling of structured data to problem solving in dynamic real-world situations that also requires responsive actions to be taken. This will include the simulation of adaptive behavior by autonomous agents, such as in factories or in transport” ¹.
We know the waves are coming. The anxiety continues to build. We can either ignore it, or we can take the first step to tackling automation.
Step 1 - Education
Our blog is based on the premise that education is the first step in building an enduring legacy as described in our posts Financial Literacy - Learning and Earning and Is a College Degree Worth the Student Loans?. Such holds true in this situation as well.
Let’s prepare to ride these waves.
The PwC Paper provides a global overview of 29 countries (27 from OECD plus Singapore and Russia) broken down by wave.
Potential Jobs at High Risk of Automation
¹Pwc Report
The most at-risk country has nearly twice the risk exposure as the least at-risk country. That is a substantial variance over a sampling size of just 29 countries. The variances are impacted by the structural make-up of the respective countries.
Each country has its own unique weighting between companies that are involved in selling goods and those companies focused on selling services. There are various industries within the goods and services segments of the economy. However, not every country participates equally in each phase of each industry. Some countries may elect to import a given product or service. Therefore, some countries may be extensively involved in the manufacturing of a product while another country simply imports such product. The diversity is complex, and such extends beyond the scope of this post.
It is also apparent that all the sampled countries will likely experience the least exposure to automation in the first wave (the current wave). Their risk exposure increases as they progress through the 2020s into the 2030s. The later waves will witness our futuristic visions of robotics and artificial intelligence come to fruition.
The share of jobs with potential high automation rates for the top 5 industries by employment share (approximately 55% of total employment is represented), is illustrated in the following table.
Top 5 Industries with the Highest Automation Rates
¹ PwC Report
As you may have guessed, manufacturing has the highest exposure to automation. Construction and wholesale and retail trade show moderately decreasing rates compared to manufacturing. Education shows a consistently lower risk than the other 4 top industries.
This data is very enlightening; however, it has not answered our question,
“Will automation eliminate my job?”
After all, if we consider two individuals in the same country that are working in the same industry, they may have very different risks to automation. Some of the key differentiating factors we have not considered at this point are the educational background of each individual and the specific tasks associated with the respective roles.
We will take a brief look at automation’s impact on the professional services industry as it relates to the accounting and legal professions. We will then look at selected jobs with the construction industry. Such will provide an appreciation as to how automation may impact a given role regardless of industry.
Accounting Profession at Risk of Automation
Let’s consider two females that work in the accounting profession. One female is an accounts payable clerk and the other is a Chief Financial Officer (“CFO”). The clerk’s job is more likely to have a higher proportion of tasks that are manual, routine, and computational in nature compared to that of the CFO. The CFO’s role will likely require a more diverse skillset requiring higher education, specialization, management, critical thinking, and decision-making. It would be reasonable to conclude the accounts payable clerk is more likely to be impacted by automation to a greater degree than the CFO.
I can relate to this scenario as I am a CFO in private industry, and I have also worked in public accounting locally and abroad. Both environments have been digesting the impacts of automation for decades. I have watched accounting software programs replace manual accounting ledgers and their related processes. Offices have gone paperless. Internal controls and testing of systems has become computerized and automated. Accounting and inventory systems are intricately integrated with global supply chains. Complex reporting requirements for diverse and demanding users have become streamlined and automated. The list seems almost endless. Artificial intelligence will only serve to further automate both private and public accounting over the decades to come.
Few would have been able to forecast the extent of automation on the accounting profession if you asked them to do so 40 years ago when computers started to gain popularity in the workplace.
The same premise holds true today. This post presents a very compelling framework through which to view automation’s impact on a constantly changing landscape. However, modelling such diverse variables as robotics, artificial intelligence, task specific functionality, government policies, regulations, societal dynamics, environmental concerns is an inherently imprecise process.
Having said that, we will embrace this imprecise process and consider how it may impact various jobs and careers.
Legal Profession at Risk of Automation
Like the accounting profession, manual tasks such as research will continue to face automation risk. Lawyers should face a low risk of automation as they are highly educated, specialized, managing their practice, making decisions, engaging with clients, and building and presenting legal arguments. Whereas legal secretaries face a high risk of automation due the manual and routine nature of certain aspects of their job. Potential redundancies in the secretarial area may cause a workflow shift to the paralegal teams.
Construction at Risk of Automation
That chart above illustrating the construction industry facing a large degree of automation risk may have surprised you. It may be difficult to imagine how such underlying jobs could be automated to such a degree. We will look at a few such jobs.
ahe following elements should be considered when choosing your educational pursuits.
The relationship between education and income potential is explored in our posts Top Paying Jobs - How Education Impacts Your Income and How Much Do Skilled Trades Pay?.
Cognitive Skills
These skills include, but are not limited to, problem solving, logic and deductive reasoning, critical thinking, and creativity. Artificial intelligence may never match or replace human’s complex cognitive abilities, but it is making tremendous strides towards such mastery.
Interpersonal Skills
These skills include, communicating (verbal, written, public speaking), influencing, negotiating, teaching, conflict resolution. These skills are relational and essential when considering automation risk. It is here that you can more easily separate yourself from the world of robotics and artificial intelligence.
FINAL THOUGHTS
I must admit, I really enjoyed researching and writing this post. I have always been fascinated with how automation may impact our world. Automation can be scary, but it doesn’t have to be. The risks are real, but for those facing elevated risk, there will be opportunities to participate in the new industries that will emerge. Many of us will need to embrace the challenges and rewards associated with retraining and developing new and broader skillsets. The future is now. Education remains the cornerstone.
One last note, we merely scratched the surface on this topic. There is so much more to learn. We recommend you click on the reference links below and enjoy the deep dive.
