Seven predictions on skills demand and three levels of expertise

John ReinersWe hear a lot about how the rise of robots will automate more and more occupations. Though we can’t predict the future with certainty so far out, young people need to plan ahead to build the skills that will help them secure a career, rather than a lifetime of leisure, writes John Reiners.

Those working in our education system need to provide advice, as well as equipping students with the skills they need. So here are seven predictions on how the demand for skills is changing, based on recent research:

  1. The impact of digital technology on employment is accelerating. Robotics and the internet of things will have major impacts, particularly in manufacturing and distribution. Artificial intelligence will potentially automate a number of white-collar occupations, like translating, medical diagnostics, paralegal tasks, insurance underwriting, and so on.
  2. Many jobs will be lost, but there will also be lots of new jobs to replace them. Our recent research on the UK’s digital potential (see ‘The UK’s £92 Billion Digital Opportunity,' Virgin Media Business and Oxford Economics, October 2015) estimated that over 300,000 jobs may be lost over the next two years, but over 1 million new jobs, requiring digital skills, will be created. Looking further out to 2030, over 50 per cent of jobs are likely to be displaced or significantly changed.
  3. Many experts predict a hollowing out of the job market - as robots automate many mid-skilled jobs, leaving highly specialised and technically demanding jobs at the top and a large number of lower-skilled, service-sector jobs that cannot easily be automated.
  4. Some, but not many of the new jobs, will be in the tech sector, which is not a large employer (only 5 per cent of all jobs). Most of the new jobs will be with firms, across all sectors, struggling to transition to working with new technology. Increasingly, all employees will need digital skills to work in sales, marketing, finance, etc. There will still be lots of work for many years helping firms make the transition (e.g., as management consultants).
  5. The impacts will be felt far beyond the corporate sector. The public sector will need to develop new ways of delivering public services digitally; health services will (eventually) be transformed; and policies, regulations, and laws will need to be updated.
  6. Most of our large, successful corporations will continue, but some traditional companies without the will or means to adapt may struggle. Technology provides opportunities for start-ups and small-scale companies that can trade at low cost internationally, so-called ‘micro-multinationals’.
  7. The nature of work will change as more people work remotely online, or in flexible, shared work spaces. Technology is propelling the growth of the freelance economy (e.g., Uber drivers or IT consultants) as an alternative to traditional employment.

Skills in demand

To thrive in the future economy, people need the skills that companies demand and need to do work that can’t be done by a robot. We can identify three levels of technical expertise:

Specialist IT skills, such as software engineering, app developers, cybersecurity, and data scientists. A firm’s success is increasingly dependent on the quality of its software and its ability to get valuable insights from data. Surveys regularly report skill shortages in these areas. As competition increases for a small pool of available staff, salaries for these roles will increase. Career paths will also become wider, from IT into general management and leadership positions. Having these skills will provide opportunities to work independently - setting up your own business, working for small agencies, as independents or consultants.

Digital skills, such as expertise in accessing information, networking, and communicating using digital tools. These will help people be more productive in many roles that will be augmented by technology. This includes information-based roles - like research, financial and business services, marketing, and management positions. But it will also include more operational areas, working in automated factories, perhaps with 3-D printing, or in distribution centres with driverless trucks and drones. In addition to understanding how the technology works, you will need to add the human dimension that the computer can’t provide - critical thinking, experience, flexibility, and the ability to rapidly respond to new events that lead to effective decision-making.  

Digital awareness, such as an ability to access the internet, use a smartphone and email or social networks. Some jobs are not threatened by technology, such as jobs needing physical dexterity (hairdressers) or personal care (nurses). However, a basic set of digital skills will increasingly be essential education for everyone, to access public services, banks, for shopping and entertainment.  As recently as December 2014, 11 million people in the UK lacked these skills - a digital divide that can severely inhibit life chances.  

Implications for teachers         

It’s not possible for the educational curriculum to maintain the pace of technological change. But schools, colleges, training centres and universities need to do their best to prepare people for future careers. Employers can also play a key role providing training and career development opportunities. Beyond providing the specialist skills described above, they need to prepare people for the future employment landscape of uncertainty and changing skill requirements, by providing training in:

  • Career management - encouraging life-long learning and flexibility to upgrade skills when needed
  • Core skills like creativity, teamwork, problem-solving and critical thinking that will give them an advantage in the workplace over their peers and future generations of robots.

They can also help by inspiring people to build their IT skills. There is a persistent image problem for many who see IT as a life in front of a screen. IT needs a makeover, supported by inspirational role models - to convey the creativity and excitement of being at the forefront of change, making things happen, with varied, fulfilling and well-rewarded careers.

John Reiners is Oxford Economics Managing Editor, EMEA. He manages research programs on a wide range of topics, including digital economy. He also follows emerging trends, like artificial intelligence and blockchain technologies. He can be contacted at jreiners@oxfordeconomics.com.

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Supporting the government’s ‘Digital by Default’ strategy we’re keen everyone has the skills and confidence to use IT. Here, we share thoughts on a variety of digital matters.

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