Digital disruption – How it’s affecting jobs and employment

The topic of the moment is digital disruption – the effects that continued innovation in technology, coupled with changing social expectations will have on commerce and industry. The currently acceptable norms of commercial interaction are changing and this has far-reaching implications on people’s jobs and the nature of employment in the future.

Over the past twenty years we have silently witnessed, willingly adopted and acknowledged the benefits that technology has provided. But what have been the implications on employment and more importantly, how will the increasing pace of technical innovation affect the nature of job opportunities in the future?

Significant change has already occurred, we have seen major transformations in the banking industry with frontline staff (tellers) all but disappearing. Once upon a time you would be greeted by as many as a dozen tellers in a large branch, now they have been replaced with four or five banking advisors. As another example, we no longer queue to obtain a boarding pass for a flight or check-in our luggage. By downloading an app we are able to compare flight prices and times, book a flight, pay for it, change it and board the plane simply by swiping our smart devices. How many people’s jobs have been affected within this one industry alone?

Discussion now is around What of the Future? Many researchers are sighting that between 40% and 50% of jobs could be displaced or significantly impacted by digital innovation and / or technology that is currently under development. These are changes that are expected to impact in a short space of time – less than 10 years.

Carl Benedict Frey and Michael A Osborne are two academics who published groundbreaking research three years ago on the future of employment in the USA. They considered the structure of the US labour market to determine which jobs might be impacted by computerisation. Frey and Osborne concluded that 47% of the US workforce’s jobs were at risk.

Jobs considered to be most at risk from computerisation include: insurance underwriters, mail carriers, data-entry operators, loan officers, cashiers, file clerks, taxi drivers, truck drivers, accountants and auditors and meter readers.

We have already seen that demand for traditional postal services has decreased to the point that mail delivery has been reduced to three days a week in NZ. We also see that positions that act as intermediaries between buyers and sellers such as auction houses, real estate agents and retailers have been affected. More people are using the internet to connect directly with the supplier, cutting out the middle man and reducing the cost to purchase.

Another example of the sheer scale of change and thus disruption that could occur in an industry sector is if driverless cars were ever to become a reality. And it would appear that there is considerable effort being put into making this happen. In America there are 233,000 taxi drivers and there are 5.7 million registered commercial truck and bus drivers*. The adoption of driverless vehicles, even over a 20 year period has the potential to dramatically affect employment.

Although the future cannot be known even the best research only provides a glimpse of what might be and can never take into account the next significant technological leap. Our world in 10 years time will be remarkably different than it is today. Will it be a world of mass unemployment? Probably not, but it will be a world where re-skilling will be essential, possibly more than once in a lifetime.

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