Earlier this year we at MartinJenkins supported ATEED to research Auckland’s future skills needs.
This is my area of expertise as well as something I’m passionate about, but there’s already so much information about the future of work, at first, I wasn’t sure what more we could say that had not been said before. All you need to do is google ‘future skills’ and you’ll find hundreds of articles quoting McKinsey, the World Economic Forum, BCG and more.
While research suggests more jobs will be created than lost through automation, the technical skills required for the new roles will be quite different from the old. This means that potentially 800 million people currently employed may not employed in the same jobs in the future, without significant upskilling that may or may not be possible.
Projecting the probable
I discovered that many of these predictions are based on a model created by Frey and Osbourne that focuses on the share of employment that can potentially be substituted by technology over an unspecified number of years. This model doesn’t account for many of the factors that influence the actual rate of adoption.
So, while those big predictions are all possible, how likely, and in what time frame, are they to be realised? And what does this mean for Auckland?
One part of the research I did was talking to employers in big and small organisations, across different industries and different locations across Auckland, to understand their reality. And what I heard was quite different from what I had read.
While a few employers are thinking about how they can use technology to streamline processes, very few are adopting technology at the rates predicted. When I asked why, I learned that there were three main things getting in their way.
Barriers to taking up new technology
The first is a lack of understanding about what technology is out there and how it could help. Lots of the talk is about artificial intelligence, virtual reality and robotics, and this can feel very remote from the day-to-day work of real Auckland businesses. They are more focused on their organisation’s operations and they don’t have time to investigate new ways of working.
The second barrier was the cost of new technology. While mass production is bringing this down, the cost of investing in new equipment is still significant for most organisations. Capital investments are often on a multi-year cycle and businesses are waiting till they are ready to upgrade before looking to buy new technology.
Coupled with that is the need to ensure that systems and equipment can talk to each other, which means that investing in piecemeal upgrades may in fact not be the best idea. Forget the Internet of Things – many businesses are just trying to share data within their organisations.
The surprising one
Now you may be thinking that those two barriers – understanding and cost – are both pretty predictable. I imagine they are barriers for many organisations worldwide. But there was a third barrier that surprised me – and this may make New Zealand a little different.
Many employers I spoke to, both big and small, made clear that their desire to care for their people is a major factor in them opting not to adopt new technology now. I heard things like ‘Why would I automate that when X is doing such a good job?’ – or ‘When Y retires then I might look at doing things differently.’
While this is great for our people at the moment, increased competition from overseas may mean that our inefficiencies lead to us becoming irrelevant. This may lead to not just X and Y losing their jobs, but thousands of others too.
How to improve productivity
This slow adoption of technology is one of the reasons New Zealand’s labour productivity rates are well below OECD averages, and why this has continued to drop for the past 10 years since the GFC. The Productivity Commission predicts that if this trend continues, then in 40 years the New Zealand economy might be 18 per cent smaller than it would be otherwise.
Embracing new technologies is key to improving productivity. If the take-up of new tech is implemented well, organisations will be able to produce goods faster, better and more cheaply, and remain competitive. In a world where globalisation breaks down barriers to trade, this is becoming essential. No longer can New Zealand choose to do things differently, safe in our own wee market, away from the global giants of Europe, Asia and America.
It’s imperative, Auckland, that we keep our eyes on the prize and invest in our future, or there may not be a future to invest in. The much talked about ‘Future of Work’ is not something that will just happen – it’s up to us to shape it into something we want to be a part of.