According to a new study by Boston Consulting Group (BCG) and Faethm which quantifies the impact of technology by 2030 in Australia, Germany, and the United States, technology is upending labor markets.
Key results of the analysis include:
- Australia faces the widest range of potential outcomes. The country will likely experience a labor shortfall of up to 800,000 full-time employees of the national workforce (the difference between the total supply and the total demand in the future workforce) by 2030. But if COVID-19 has a more pronounced long-term impact on GDP growth, the country could actually see a nearly equal labor surplus of approximately 800,000 full-time employees.
- Germany will likely experience a labor shortfall in five of the six scenarios the authors modeled, ranging from 200,000 to 2.5 million workers.
- The US will likely experience a labor shortfall in its workforce of 600,000 to 12.5 million people by 2030.
In all three countries, the professions with the biggest looming shortfalls are computer-related occupations and jobs in science, technology, engineering, and math.
Meanwhile, in job family groups that involve little or no automation but that do require compassionate human interaction tailored to specific groups—such as health care, social services, and certain teaching occupations—the demand for human skills will increase as well.
“The net number of jobs lost or gained is an artificially simple metric to gauge the impact of digitization,” said Rainer Strack, a senior partner at BCG and a coauthor of the report.
“For example, eliminating 10 million jobs and creating 10 million new jobs would appear to have negligible impact. However, doing so would represent a huge economic disruption for the country—along with the millions of people with their jobs at stake.”
Recommendations for all stakeholders
The report offers several measures that stakeholders can take to prepare for a digitized future. For example, national governments should hone their predictions of how the workforce will change over time and develop training programs to give displaced workers new skills.
“Governments can also build online employment platforms that can help match available talent to open positions and reskilling opportunities,” said Miguel Carrasco, a senior partner at BCG and a coauthor of the report.
Companies should anticipate the skills and capabilities they will need to succeed in the future, improve their recruiting and retention programs, and build a culture of lifelong learning. And individuals can help as well, by proactively learning new skills and being flexible about changes over time.
“As countries prepare to meet the twin demands of the digital age and the economic effects of COVID-19, they must understand the challenges that lie ahead,” said Michael Priddis, the CEO of Faethm and a coauthor of the report.
“This means making use of more sophisticated analytical models to predict supply and demand in the labor market and integrating them into the foundation of their workforce strategies.”