Automation May Displace 800 Million Workers by 2030

(December 1, 2017) Between 400 million to 800 million workers worldwide could be displaced by automation and artificial intelligence by 2030 and will need to find new jobs, a new report issued by McKinsey Global Institute finds. Of those displaced, between 75 to 375 million will need to switch occupations as well.

The report notes that automation and artificial intelligence “will generate significant benefits for users, businesses, and economies, lifting productivity and economic growth.” The growth, however, will be at the expense of “middle-wage occupations,” exacerbating “income polarization” in advanced countries such as the United States, where 39 to 79 million jobs may become extinct.

The decline in occupations “imply that a very large number of people may need to shift occupational categories and learn new skills in the year ahead,” the report finds. “The shift could be on a scale not seen since the transition of the labor force out of agriculture in the early 1900s in the United States and Europe, and more recently in China.”

Occupations replaced by automation and artificial intelligence are correlated with the level of education. “The technical automation potential for occupations requiring less than a high school diploma is 55 percent, whereas for those with a college degree, that potential is far lower, at just 22 percent.” Most susceptible to automation are “record clerks, office assistants, and finance and accounting; some customer interaction jobs, such as hotel and travel workers, cashiers, and food service workers; and a wide range of jobs carried out in predictable settings, such as assembly line workers, dishwashers, food preparation workers, drivers, and agricultural and other equipment operations. Helping individuals transition from the declining occupations to growing ones will be a large-scale challenge.”

To assist in the workforce transition, the report recommends:

• Maintaining robust economic growth to support job creation, including fiscal and monetary policies that ensure sufficient aggregate demand.
• Scaling and reimagining job retraining and workforce skills development, including programs that can more quickly retool the labor force.
• Improving business and labor market dynamism including mobility.
• Providing income and transition support to workers, such as unemployment insurance, pubic assistance, and portable benefits to follow workers between jobs.

The report, titled “Jobs Lost, Jobs Gained: Workforce Transition in a Time of Automation” surveyed 46 countries and did a more focused study of six of those countries.