Not too shocking – those high numbers for job disruption by technology

Posted on by Stuart Murray
static halo. Photo courtesy of Bridget McKenzie.

Can you think of a time you took advantage of a new technology, and in the process came out way ahead? You’re going to need plenty of stories like this in order to take full advantage of the future of work.

I’ll never forget my first exposure to a pirated version of Microsoft Excel. I was in graduate school in 1994 and a young woman in my class, Bev, handed me a stack of eight floppy disks held together with a blue elastic band. She told me Excel was way better than what I was using. Six months later I had finished an entire graduate thesis based on clever charts and tables I had created using new software. Six months after that, I was at a firm in one of the towers in Toronto’s downtown core with experienced consultants lining up at my cubicle, waiting for some solid analysis. My mind had co-evolved around the technology, and I was valued.

For many months I was the only analyst on a team that had four consultants. When new technologies are brought in, sometimes one person can do the work of several peers. And this appears to be a concern today with incoming technologies, such as artificial intelligence, internet of things, and analytics.

Reports of Technology Eliminating Jobs Are Greatly Over-Stated

There has been some excitement lately about McKinsey’s report that 800 million jobs will be eliminated worldwide by technology. Reading the content of the report – not just the media coverage – I can assure you that it’s far less dramatic.

First, the 800 million jobs was the upside of a forecasted range, and the authors recommend considering the mid-point of the range, which is 400 million jobs. Those 400 million jobs are proportional to 15% of current work activities in the global labour market. These job losses are not expected to be immediate, as this is a forecast into 2030 – twelve years from the paper’s date of publication. This means the forecast is closer to 30-35 million jobs lost per year, which seems far more modest on a planet with 7.6 billion inhabitants.

But it gets better. Of the 400 million jobs lost, only 75 million jobs will be eliminated altogether. The remaining job losses will be in cases where parts of our jobs will be eliminated. About 30% of “constituent” work will be automated for 60% of occupations. That is, there will be bots taking care of the more mundane parts of our jobs. It remains to be seen whether this shift will result in 30% less employment, or if our outputs will just be more efficient. There may be a line-up at your own desk, with senior people increasingly reliant on your own unique, human-machine hybrid.

Is it Technology or Globalization That’s Eliminating Jobs?

This technological revolution will have more dramatic impacts on industrialized economies such as Canada, the U.S. and Europe. New technologies have a cost of implementation, and cost savings are needed to justify the investment. A lot of cost savings can be found in eliminating expensive jobs. But in the developing world, wages are lower and the gains of the new technology won’t always outweigh the cost. The trade-offs between hiring people and bringing in new technology often tips towards employing people in those places where wages are low. It’s in the industrialized world where we will see the most change.

In my opinion (not necessarily McKinsey’s), this will have an impact on political optics. Jobs will appear to be eliminated in industrialized economies and then magically reappear in the developing world. But the back-story is that technology allows work to be done with fewer employees and more machines in industrialized countries. And those western workplaces will have competition from countries where it is not optimal to bring in new technologies. The jobs created in developing countries will look like the same jobs that used to exist in the West. But that’s not what’s going on. Developing economies are just briefly immune to the more-expensive technology, for as long as those countries have low wages.

McKinsey also reviewed the history of technological change and found that there tends to be a net gain from new technologies. The technology benefits someone — the buyer, investor, or some new profession or trade. That someone spends money in a manner that creates different jobs, often by taking advantage of yet another new technology. Those 400 million lost jobs are likely to be only the downside of a net-gain from technology.

Development and Social Supports Needed to Remedy Workplace Change

This raises the difficult issue of things getting better on average. As I described in an earlier post, if one million jobs are eliminated and a million-plus-one jobs are created, this is a net gain of one job. In the minds of economists, this is considered progress. However, looking at the blow-back from voters in industrialized countries, it appears that we must now pay very close attention to the millions who were on the downside of this net gain. And perhaps you know some of these people.

McKinsey was all over this issue:

“Midcareer job training will be essential, as will enhancing labour market dynamism and enabling worker redeployment. These changes will challenge current educational and workforce training models… Another priority is rethinking and strengthening transition and income support for workers caught in the cross-currents of automation.” (p. 8)

Within the human resources crowd, we are experienced at either enduring push-back from unions, or anticipating labour’s response with meaningful policies and initiatives. But regardless of whether you are sympathetic to the underclass, or just trying to implement a new technology as quickly as possible, you can see that society’s success at adapting to this change will hinge on the personal experience of those who have lost.

Looking around us, it seems like we are all trying to get our footing, trying to figure out for that one special thing that sets ourselves apart. You might not be told ahead of time what that thing should be. In fact, you might need to figure it out entirely by yourself. But those who are always working on their angle will have a better shot than those who are relying on prior wins.

Sure, there might be an employer who is loyal enough to set you up for success, or a program or union that will help with the job transition. But as we take turns eliminating each other’s jobs, you might want to hold onto a dash of selfishness. If you can bot-boss your way into a superior level of productivity, you might become that one valued employee on the upside of a turbulent net-gain.

Either as a society, or as an individual, you need to write yourself into a story where you reached for the power cord and taught the corporate machine to work for you.

[This is a re-post of an article from March 8, 2018]

Be skeptical about predictions of the future workforce

Posted on by Stuart Murray
Happy Elsie. Photo courtesy of Martin Cathrae.

How much do we need to think about future job disruption and how it will affect our careers and the lives of our children? Somewhat, but don’t worry about it. There’s a cottage industry of hype and hysteria that grabs your attention and offer foolish solutions that are unrelated to the facts.

The BBC has a great audio article debunking the myth that 65% of future jobs have not yet been invented. Like the good journalists they are, the BBC looked into this “65% of future jobs” statistic and traced it back to the source. They found two authors citing a report that does not exist, at an institute which is reported to have been disbanded, in a jurisdiction (Australia) that doesn’t even recall an institute by that name ever existed. The BBC credits this discovery to blogger Andrew Old who critiques misleading statistics in the education field.

The BBC tried to re-create the 65% figure looking backwards.  Sometimes looking backwards at hard data produces better information than speculative forward-looking estimates. They found that one-third of jobs that exist today didn’t exist a decade ago. That one-third figure includes newly-created jobs where the role had existed somewhere in the labour market but not that position in that particular workplace.

An example would be new teaching jobs created because of population growth; it’s a pre-existing type of job that you could plan your career around, but the positions didn’t exist previously. Job growth allows us to move up in the world, change jurisdictions, sell goods and services to the newly-employed, and engage new labour market entrants coming from graduation, immigration, and returning to work after a break. From this perspective, it’s a very good thing that a large fraction of current jobs didn’t exist a decade prior. I hope this continues.

What Credible Sources Say About Job Disruption

Even still, there may be potential disruptions arising from automation, globalization, and demographic shifts. In an earlier post, I reviewed a McKinsey report that noted 800 million jobs will be eliminated worldwide by technology. However, 800 million is the maximum range of their forecast, and the mid-point is 400 million jobs. The time period is 12 years, so the forecast is 33 million jobs lost per year globally – small for a planet of 7.6 billion inhabitants.

Of the 400 million jobs affected only 75 million will be eliminated altogether, and the rest will have parts of their work eliminated. For many of the roles that have parts of their work eliminated, workers might become a “bot boss” of a new technology that causes people to be more productive, more valued, and experience greater job security.

In another post I reviewed a paper from the World Economic Forum about forecast job losses relative to forecast new opportunities. There is an abundance of opportunity for people to port their skills from a lost job to a new job. On average, we’re going to be okay.

To clarify, when these reports are created they say one thing, but the headlines exaggerate the findings and sell eyeballs to advertisers. Congratulations, the product is you. But wouldn’t you rather become the protagonist in this outrageous game?

How To Take Advantage of Future Work Opportunities

How do you get one of those great new jobs where you leverage the new technology? At the Young Employers’ Council at Inc.com, a helpful article advises people on How to Prepare for a Career That Does Not Exist. In brief, they assert four takeaways:

  • Develop a broad-based skill set
  • Build a large and robust network
  • Excel at whatever you are doing
  • Stay on top of the news and trends

You need to a broad-based skill set to adapt your way into anything new. When a novel challenge presents itself, it is common that there is not an existing skill to deal with it, so newcomers bring skills from their prior profession. I experienced this myself when I entered workforce analytics, bringing in two decades of experience from the compensation and labour economics fields. In addition to tools for modelling in Excel, I knew a few things about consulting, office politics, and human rights in the workplace, all applicable to the new role. By contrast, I have colleagues who bring insights from industrial psychology, mathematics, and engineering. The mixture keeps it alive, people covering each other’s blind spots. The ability to adapt your skills while working through a series of specializations can really set you up for the future.

But you also need to leverage your core education. Broad-based skill includes creating a hybrid of book learning and applied practical smarts. In a Fast Company article referencing undergraduate internships at Indiana University’s Kelley School of Business, they emphasize the development of “adjacent” skills that blur the line between classroom and workplace:

“Isabelle Bajeux-Besnainou, dean of the Desautels Faculty of Management at McGill University in Montreal, says it’s more important to focus on experiential learning… ‘We cannot teach skills we don’t know exist yet,’ she says. ‘We need a different strategy and make sure they’re becoming lifelong learners,’ she says. [She cites a study finding] that experiential learning reinforces theoretical concepts and leads to superior performance.”

In some postsecondary institutions, the new goal is not to prepare students for their first job, it’s to prepare them from a series of jobs in a string of wins-and-losses, on the presumption that there will be plenty of disruption in the future. This scenario requires an agile mindset, high social intelligence, and a personal history of changing context and perspective. There is a call for employers to develop this new mindset as well, but from a top-down perspective, suggesting that employees quitting for better opportunities is a good sign of a dynamic workplace and that employers should empower themselves to keep tabs on former employees as a valued resource over the longer-term.

Back to the Inc article, I think the habit of excelling at whatever you do is vital because employers see the act of excelling as a stand-alone attribute. If there is a brand-new skill area and the employer wants their organization to become excellent at this skill, they may have no opportunity to find someone who already has the skill, let alone have excellence in it. But they can find someone who had recently become excellent at something adjacent. The spirit of excellence is a superpower that can be applied to the new and unknown.

Critical Analysis of the News is More Important Than Ever

The Inc article’s comment on staying on top of the news is the most thought-provoking. My undergraduate degree is in arts, and I find that arts majors can out-perform others shortly after a major change. We know things have changed in the past, and will do so in future, and that some fads are fleeting while human nature persists. And if you don’t have an arts degree, following the news for a few years can give you a really good proxy for this mindset.

Let’s get back to that dubious figure that 65% of future jobs don’t currently exist. The original source was Dr. Cathy Davidson, founding director of The Futures Initiative at NYC University. She says in another interview she stopped using the 65% figure in 2012. In the BBC interview, when pressed on her figures she doubles-down and says that 100% of jobs have been disrupted by technology. But in my former life in compensation, many jobs – particularly in the trades and service sectors – still have accurate job descriptions from the 1970s. 

Then Davidson asserts that the one thing that has not changed is our education system. But I follow the K-12 sector and over the last few decades have seen a number of impressive changes that are grounded in robust research. My three favourites are the boom in early interventions for special needs children, improved vigilance on preventing bullying, the sophisticated and nuanced use of technology in the classroom, and the shift to experiential learning built around the student’s intrinsic motivation.

Sorry, that was four favourites. You caught that, right? If you didn’t, you need to learn how.

Fold the towels first

Posted on by Stuart Murray
Towels, by Michael Coghlan
Towels.  Photo courtesy of Michael Coghlan.

This is a quick productivity tip for anyone who feels overwhelmed by the over-abundance of information and obligations.  Fold the towels first.  I first developed this metaphor when I figured out how to “get around to” folding the laundry for my family of four.  There was a big intimidating pile of laundry that I didn’t want to start working on.  So, I just walked up to the pile and pulled out all of the towels, folded them all, and put them away in about five minutes.  I came back to the pile two hours later, and it was about half as big as the last time I looked at it.  There, not so intimidating. Let’s finish the rest of this work.

Similarly, I was able to apply this metaphor to large volumes of errors in spreadsheets full of workforce data.  You see, there is a high likelihood that if you look at all of the problems you need to solve, there is typically one big problem that can be solved really quickly. Think of this as a strike-attack against the intimidation factor.  Just wrap up one big problem then step away from your desk for an hour or for the day.  Come back to your list of woes, and the remaining work should seem far easier.  It works with laundry. It works with big data. And, it could work for you.

Unsubscribe to your biggest spam provider, request a deadline extension on your most unreasonable task, ask for help with that thing that is beyond your ability, or send a courtesy note to that one person you’re worried that you might have offended. It doesn’t always work out this way, but when it does work, it’s incredibly empowering.

[Repost from October 7, 2017]

The Thank-You Note – The Gift That Keeps On Giving

Posted on by Stuart Murray

Pelikan Fountain Pen, by David Blackwell (=)
Pelikan Fountain Pen.  Photo courtesy of David Blackwell.

Do you remember the last time you received a thank-you note?  It felt special, didn’t it?  Strangely, we feel nervous about sending these kinds of notes.  Do thank-you notes actually accomplish anything? Aren’t we supposed to focus on getting real work done?

I pride myself on making a productive contribution to my workplace.  One of the most powerful impacts I have is when I find people who want to use Excel better.  I give them a few tutorials to upgrade their skills, and send them off as a more productive player.  I want more people in our human resources office to open spreadsheets and crank out the numbers themselves.  It lessens the burden on me, and creates an environment where everyone talks freely about the numbers.  And voila, we have the research-influenced workplace.

What is baffling is when people send me thank-you notes and Starbucks gift cards for devoting my precious time to help develop their skills.  Don’t they understand that I am manipulating them to achieve my own selfish goals?  Don’t they understand that I’m an economist?  Who are these social workers and coaches and creatives types, to think they can bring me into their magical world with nothing more than a few words of gratitude?  My cunning plan has gone horribly awry.

What Exactly Are the Rules of Gift Exchange?

Generosity and gratitude are a common source of misunderstanding.  I once got really curious about gift exchange.  It started out as an attempt to understand social norms, but I ended up reading anthropological research about gift-giving in archaic societies. (Of course I did).  I read a couple of books on the topic, including Marcel Mauss’ The Gift (W.W. Norton & Company Inc, 1990).  This “gift economy,” just to introduce the Wikipedia page on the topic, makes huge distinctions between the market behaviours of commercial transactions and non-market gift exchange.  This is important to understand, because showing up at work every day is a market activity.  But if it’s a good workplace, colleagues act like they are in the same tribe.

Gift exchange has many subtle rules that are similar across cultures and across time.  There is usually a time lag between gift-giving moments.  The giving of a gift places the other person in debt, and the gift must be repaid for fear the relationship could be severed.  There is a tendency towards reciprocity and balance, and attempts to profit from the exchange are mostly taboo.  The dynamic fosters qualitative relationships, as opposed to the quantitative relationships of market trade.

Also, those who are obliged to accept charitable gifts feel a sense of being poisoned and stigmatized, as they are unable to keep things even.  You can subjugate vulnerable populations by staying one-up on them with gift-giving.  Who says anthropologists can’t learn a trick or two from economists?

Thank-You Notes are Undervalued

I see thank-you notes as a key part of gift exchange.  The notes acknowledge an exchange of good-will.  They place, in writing, that gratitude has been established.  There is the implication that a favour might be returned one day, or paid-forward to a third party.  Thank-you notes formalize that an emotional thread has been established between giver and recipient.  Society is a web of such threads, and we weave ourselves into this web as it entangles us in obligations, for better or worse.

In an article at the British Psychological Society, Christian Jarrett reviews research conducted by Amit Kumar and Nicholas Elpey on expressions of gratitude.  The researchers asked participants to send thank-you notes to people who had contributed to their lives in a meaningful way.  The researchers then followed-up with the recipients to ask how they felt.

“The senders of the thank-you letters consistentlyunderestimated how positive the recipients felt about receiving the letters and how surprised they were by the content. The senders also overestimated how awkward the recipients felt; and they underestimated how warm, and especially how competent, the recipients perceived them to be.” (Emphasis added)

These misjudgments discouraged people from sending the thank-you notes in the first place.  The authors note that withholding this gratitude is to refrain from “a powerful act of civility.”  The notes benefit both the recipient and the sender, as the sender is perceived to be more competent.

Is Formal Recognition a Meaningful Workplace Practice?

In addition to hand-written notes and kudos emails, some workplaces have formalized recognition programs that distribute points between employees.  All employees are given points to distribute to someone other than themselves (just to be clear), and there’s an electronic system to keep score.  Top givers and top receivers are profiled on a periodic basis, and sometimes points can be cashed in for swag or experiences.  A quick internet search reveals programs such as Kudos, Achievers, Point Recognition, and Terryberry.  Terryberry has a great infographic detailing the benefits of these programs, referencing credible sources at the bottom of the page.

In terms of effectiveness, recognition programs cause higher customer satisfaction, better employee engagement, and staff turnover that is about 24-31% lower, depending on the study.  To clarify, if your turnover rate used to be 8% and it dropped to 6%, that’s a 25% reduction in turnover.

These programs net a massive value proposition.  If a company spends 1% of payroll on these programs, 85% see a positive impact.  Delta Airlines saw a 564% return on their investment.  Massive percentage returns are often the result of an incredibly low denominator.  That is, if Delta spent 1% of payroll and saw a 6.64% increase in productivity, that is consistent with a 564% return.  But it’s nothing to sniff at.  If you know of people trying to earn more than 10% per year on the stock market, you would have to acknowledge that recognition is far more impactful than anything being pushed to you by bankers.

Incentive Plans and Recognition Programs Are Very Different

A key detail that must not be missed, is that recognition programs bear little resemblance to formal incentive plans.  In Alfie Kohn’s 1999 book Punished by Rewards, he details how performance-contingent rewards (i.e. do this and you’ll get that) cause behaviours that largely decrease business effectiveness.  When you offer an employee a 10% target bonus for exhibiting certain behaviours, they tend to minimize risk, abandon creativity, game the system, and express severe outrage when they get less than the maximum bonus.  And so, this 10% bonus achieves approximately zero return on investment, and possibly a negative return.

The issue is that people don’t like to be controlled by overlords, and incentive plans are inherently controlling.  Incentive plans have a scientific legacy that they are designed by people who make no distinction between humans and rodents.

By contrast, recognition systems are expressions of warm-feeling and a sense of emerging qualitative relationships between peers.  When you exchange thanks with peers, you love them a little.

So, reflect on your week and think about those who helped you achieve your goals.  Get past that misinformed sense that expressing gratitude will create discomfort.  Establish those threads of good-will between peers, and weave together an archaic society of those who can keep things even.  It makes you more competent.  It makes you human again.

Spaghetti Principle Best Way to Change Minds

Posted on by Stuart Murray

IMG_0580 by Brent (2)
IMG_0580.  Photo courtesy of Brent.

Does everything change when you touch it?  Yes for spaghetti: spaghetti changes when you touch it.  But what about people?  Do people change when you try to move them?  Sometimes.  Only sometimes.

One of my sub-skills is my ability to give one-on-one tutorials to colleagues to bring them to a higher level proficiency in Microsoft Excel.  Results vary, not because of talent, but more because of the person’s interest-level and their opportunity to apply the learning. I have done these tutorials enough times to know that there is a major concept that everyone needs to “get.”  So I offer the spaghetti metaphor.

When you move cooked spaghetti from the colander to the dining table, there are two ways that it gets there.  First, you move spaghetti out of the colander and onto the plate, changing the layout of the noodles in the process.  Then, after putting on the sauce, you move the entire plate to the dining table.  Transporting the plate does not change the layout of the noodles.  You can move the noodles or move the entire plate.  The distinction is that in some cases you change the configuration of the contents and in other cases you change their location but with the configuration left intact.

For those struggling with Excel, the issue is that if a rectangular cell has formulas in it, you must cut-and-paste the cell, drag-and-move the entire cell, or copy the formula inside the formula prompt to move a formula without altering it.  By contrast, if you copy-and-paste a cell or you use the autofill feature, your formula will automatically change so that all the cell references move accordingly.  You don’t have to worry about this if you’re not manipulating Excel right now.  As I mentioned, your ability to grasp this depends on your opportunity to apply the learning.

Enough math, let’s extend the concept to people’s opinions.  Are there cases where we attempt to move the logic in the minds of others?  Yes indeed.  Sometimes when you attempt to compel others to think of things differently, you get to change the configuration of their spaghetti-scramble of ideas.  But other times, you simply move the plate.  You get a person with the exact same opinions as before, they’re just in a different place, possibly more entrenched.

On Ozan Varol’s website, the rocket-scientist-turned-contrarian-author has some advice on how to change people’s minds.  Varol explains that people’s beliefs have an outsized impact on their grasp of the facts.  This role of beliefs drives a cognitive fallacy known as confirmation bias, the tendency for us to select facts that strengthen our beliefs and gloss-over those facts that are disruptive and uncomfortable.  The challenge is that we cannot use facts to drive changes-of-opinion, because it’s almost impossible to get into peoples’ grasp of “the facts” without attacking their intelligence.  So their defenses go up and they tell you where to go.  You know how this goes.

Varol recommends re-framing either-or debates around an alternate frame of reference.  His best example is when Columbians in the 1950s were grappling with the collapse of the Rojas dictatorship.  An entrenched mindset would blame the military for complicity in the Rojas regime, but that’s not what happened.  Instead, citizens offered an alternative narrative that “…it was the ‘presidential family’ and a few corrupt civilians close to Rojas – not military officers – who were responsible for the regime’s success.”  This narrative significantly reduced the risk of Columbia slipping into a military dictatorship.

As an academic, Varol presents papers at conferences with a subtle verbal shift.  He presents opinions somewhat detached from himself (“This paper argues…”) so that his ideas are lobbed into the public sphere to be thrashed about until others come to a more meaningful conclusion.  When he made this shift his ideas “took a life of their own” allowing him to view his own arguments with some objectivity.

You can do this too.  Varol encourages you to befriend those who disagree with you, expose yourself to environments where your opinions can be challenged, and presume that you will experience some discomfort.

Personally, I think the big deal is to get over yourself.  Or to be precise, that I need to get over myself. (See what I did there?)  If everyone other than me has opinions that are a random configuration of noodles, what are the odds that my own ideas are configured perfectly?

When it’s my turn to make spaghetti, I get the noodles into the plate, even them up, pour the sauce, and just get it all onto the table.  I have one kid that hates parmesan, and another that hates pepper.  Neither of them uses a spoon.  They handle the noodles as they see fit.  I let everyone enjoy what’s in front of them, while we talk about our day and our lives.  Hands off the noodles, because now’s the time to enjoy people.

Not Too Shocking – Those High Numbers from AI Job Disruption

Posted on by Stuart Murray

Shocked. By Mark Turnauckas.
Shocked. Photo courtesy of Mark Turnauckas.

Can you think of a time you took advantage of a new technology, and in the process got way more work done?  We’re all going to need more stories like this in order to stay ahead of the game.

I’ll never forget my first exposure to a pirated version of Microsoft Excel.  I was in graduate school in 1994 and a young woman in my class, Bev, handed me a stack of eight floppy disks held together with a blue elastic band.  She told me Excel was way better than what I was using.  Six months later I had finished an entire graduate thesis based on clever charts and tables I had created using new software.  Six months after that, I was at a firm in one of the towers in Toronto’s downtown core with experienced consultants lining up at my cubicle, waiting for some solid analysis.  My mind had co-evolved around the technology, and I was valued.

For many months I was the only analyst on a team that had four consultants.  When new technologies are brought in, sometimes one person can do the work of several peers.  And this appears to be a concern today with incoming technologies, such as artificial intelligence, internet of things, and analytics.

There has been some excitement lately about McKinsey’s report that 800 million jobs will be eliminated worldwide by technology.  Reading the content of the report – not just the media coverage – I can assure you that it’s far less dramatic.

First, the 800 million jobs was the upside of a forecasted range, and the authors recommend considering the mid-point of the range, which is 400 million jobs.  Those 400 million jobs are proportional to 15% of current work activities in the global labour market.  These job losses are not expected to be immediate, as this is a forecast into 2030 – twelve years from now.  This means the forecast is closer to 30-35 million jobs lost per year, which seems far more modest on a planet with 7.6 billion inhabitants.

But it gets better.  Of the 400 million jobs lost, only 75 million jobs will be eliminated altogether.  The remaining job losses will be in cases where parts of our jobs will be eliminated.  About 30% of “constituent” work will be automated for 60% of occupations.  That is, there will be bots taking care of the more mundane parts of our jobs.  It remains to be seen whether this shift will result in 30% less employment, or if our outputs will just be more efficient.  There may be a line-up at your own desk, with senior people increasingly reliant on your own unique, human-machine hybrid.

This technological revolution will have more dramatic impacts on industrialized economies such as Canada, the U.S. and Europe.  New technologies have a cost of implementation, and cost savings are needed to justify the investment.  A lot of cost savings can be found in eliminating expensive jobs.  But in the developing world, wages are lower and the gains of the new technology won’t always outweigh the cost.  The trade-offs between hiring people and bringing in new technology often tips towards employing people in those places where wages are low.  It’s in the industrialized world where we will see the most change.

In my opinion (not necessarily McKinsey’s), this will have an impact on political optics.  Jobs will appear to be eliminated in industrialized economies and then magically reappear in the developing world.  But the back-story is that technology allows work to be done with fewer employees and more machines in industrialized countries.  And those western workplaces will have competition from countries where it is not optimal to bring in new technologies.  The jobs created in developing countries will look like the same jobs that used to exist in the West.  But that’s not what’s going on.  Developing economies are just briefly immune to the more-expensive technology, for as long as those countries have low wages.

McKinsey also reviewed the history of technological change and found that there tends to be a net gain from new technologies.  The technology benefits someone — the buyer, investor, or some new profession or trade.  That someone spends money in a manner that creates different jobs, often by taking advantage of yetanother new technology.  Those 400 million lost jobs are likely to be the downside of a net-gain from technology.

This raises the difficult issue of things getting better on average.  As I described in an earlier post, if one million jobs are eliminated and a million-plus-one jobs are created, this is a net gain of one job.  In the minds of economists, this is considered progress.  However, looking at the blow-back from voters in industrialized countries, it appears that we must now pay very close attention to the millions who were on the downside of this net-gain.  And perhaps you know some of these people.

McKinsey was all over this issue:

“Midcareer job training will be essential, as will enhancing labour market dynamism and enabling worker redeployment.  These changes will challenge current educational and workforce training models…  Another priority is rethinking and strengthening transition and income support for workers caught in the cross-currents of automation.” (p. 8)

Within the human resources crowd, we are experienced at either enduring push-back from unions, or anticipating labour’s response with meaningful policies and initiatives.  But regardless of whether you are sympathetic to the underclass, or just trying to implement a new technology as quickly as possible, you can see that society’s success at adapting to this change will hinge on the personal experience of those who have lost.

Looking around us, it seems like we are all trying to get our footing, trying to figure out for that one special thing that sets ourselves apart.  You might not be told ahead of time what that thing should be.  In fact, you might need to figure it out entirely by yourself.  But those who are always working on their angle will have a better shot than those who are relying on prior wins.

Sure, there might be an employer who is loyal enough to set you up for success, or a program or union that will help with the job transition.  But as we take turns eliminating each other’s jobs, you might want to hold onto a dash of selfishness.  If you can bot-boss your way into a superior level of productivity, you might have a shot at being that one valued employee on the upside of a turbulent net-gain.

Either as a society, or as an individual, you need to write yourself into a story where you reached for the power cord and taught the corporate machine to work for you.