The World Economic Forum (WEF) has released its Future of Jobs 2023 report, revealing some relatively startling statistics about how geopolitical events and emerging technologies will impact transforming labor markets in the coming years.
Job markets remain reeling from the long-term effects of the COVID-19 pandemic, which has caused massive labor shortages and supply chain disruptions, according to the report. The market is in turmoil.
While the invasion of Ukraine has exacerbated Europe’s energy crisis, the cost of living crisis continues to undermine regional economies, posing challenges for both consumers and businesses.
In addition, the imminent effects of climate change have sparked many job market shifts, sparking hasty sustainability initiatives that require businesses to use clean energy.
As CEOs focus their strategies on artificial intelligence (AI), emerging technologies are wreaking havoc on the once-stable tech industry, facing massive layoffs among the biggest companies this year.
A WEF report shows that emerging technologies are expected to bring about the biggest changes to the global job market.
The report, which surveyed employers in various industries around the world, shows that AI and machine learning (ML) will play the fastest growing role over the next five years.
macro trend
86.2% of the organizations surveyed said increased adoption of new and cutting-edge technologies will be the top trend driving business transformation over the next five years.
It is closely followed by increasing digital access (86.1%), as the closing of the digital divide will enable greater adoption of technology and broaden the pool of tech-skilled workers.
Still, non-technology factors will continue to influence the job market through 2027.
80.6% of organizations responded that broader application of environmental, social and governance (ESG) standards would help companies transform their business.
Rising cost of living (74.9%) and slowing global economic growth (73%) are also seen as key drivers of business change.
For the job market, each impact will go in a different direction.
Investments to facilitate the green transition of businesses (52.2%) and promotion of ESG standards (51.4%) are considered likely to create jobs in the next five years.
Emerging technologies are expected to generate a net 36.4% increase in job creation over the next five years.
Rising cost of living and slowing global economic growth both led to a net decline in employment, at -19.3% and -44.4% respectively. Supply chain shortages can also cause job losses (-23.7%).
Technology introduction
Demonstrating the inevitable importance of technology trends to the global job market, the WEF has created its own section on technology adoption in its annual report.
As this is a global, cross-industry report, the WEF was unable to draw any specific inferences about tech companies’ digital adoption strategies, but the overall trend is upward.
Digital platforms and apps are the number one technology organizations are considering adopting in the next five years, at 86.4%.
Education and Workforce Development Technology (80.9%) and Big Data Analytics (80%) come in second.
While these technologies may seem like obvious steps to technology professionals, they demonstrate the current scale of digital adoption in various industries around the world.
Artificial intelligence (AI) is a coveted new innovation among top tech companies, predicted to be adopted by 74.9% of companies by 2027.
Cloud computing is also on the rise, with 76.6% of businesses aiming to adopt this technology in the next five years.
The Internet of Things and connected devices (76.8%) are another technology organizations are considering investing in, alongside encryption and cybersecurity (75.6%), amid growing threats.
E-commerce and digital trading will be adopted by 75.3% of organizations, demonstrating the impact of digitization in these industries.
Despite ESG being recognized as a major driver of business transformation, environmental and climate change mitigation technologies will be deployed by 64.5% and 62.8% of companies, respectively, within the next five years.
The impact of technology adoption on employment over the next five years will depend on the technology adopted.
Big data analytics is expected to lead to a 58% increase in net employment, followed by climate change mitigation technology (49.5%) and environmental management technology (45.8%).
Encryption and cybersecurity also lead to a significant net increase in job creation (43.3%). This could be a problem in the UK, where skills shortages are particularly hard hit in the cybersecurity sector.
The introduction of humanoid and non-humanoid robots was the only technology causing a net decrease in employment, at -2.6% and -8.8% respectively.
There are fears that AI will replace many jobs, but the WEF report predicts that AI will actually lead to a 25.6% increase in net job creation, while at the same time nearly 25% of jobs will be replaced. expected to lead to a loss of
In fact, AI is becoming a work intrusion as the industry as a whole considers where and how best to use emerging technologies.
“Organizations today are estimated to have 34% of all business-related tasks performed by machines, with the remaining 66% performed by humans,” the authors of the report wrote.
This is actually a downward projection from the WEF’s 2020 report, which it said “probably reflects the view that machines and algorithms have improved human performance over this period, rather than automating tasks.” written in the report.
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In fact, most predictions about the amount of tasks that will be automated are in line with predictions made in 2020 for the current situation.
technology skills
Technology skills are projected to increase across industries.
71.9% of care, personal services and wellness organizations cite technology skills as a top priority in their five-year strategy.
Information technology service organizations also plan to improve their technology skills, with 67.4% making this a priority.
In terms of reskilling efforts, AI and big data have increased by 12 points in importance to businesses compared to 2020 data. However, in today’s market, he ranks 15th among core skills for mass employment.
AI tools skills now surpass computer programming, network and cybersecurity skills, technology literacy, design and user experience.
While a minority believe AI is a passive fad and currently overhyped, a net 59% of businesses expect AI to continue to grow in importance. .
“Generative AI has the potential to displace jobs, but the focus on training employees to take advantage of AI and big data is opening up new opportunities to harness its potential to help achieve business goals. presents an opportunity for a strong role,” the authors of the report wrote.
barrier
Skills gaps and the inability to attract talent are cited as the biggest barriers to industry transformation, according to the report.
59.7% of companies attribute their slow change to a skills gap, and 53.4% recognize that the inability to attract talent is a major shortcoming in their company’s ambitions.
However, company size does influence these perceptions, as SMEs were 20% less likely than large companies to report that a shortage of skilled talent is a barrier to transformation.
To combat these barriers, workforce strategies include investing in workplace training (reported by 81.2% of companies) and accelerating process automation to reduce reliance on labor (80%). I’m here.
Conclusion
“Global macro trends and turmoil make the environment policymakers, employers and workers have to navigate more complex than ever, and uncertainty and volatility remain high,” the report said. concluded.
Socio-political changes have certainly impacted forecasts over the next five years, and emerging technologies will have a significant impact on future business strategies.
