‘Half of World’s Human Work’ Can Be Automated with Current Technologies

‘Half of World’s Human Work’ Can Be Automated with Current Technologies

In a noteworthy study in 2015, a group of McKinsey researchers made the bold claim that “as many as 45 percent of the activities individuals are paid to perform can be automated by adapting currently demonstrated technologies.” More startlingly, they found that “a significant percentage of the activities performed by even those in the highest-paid occupations (for example, financial planners, physicians, and senior executives) can be automated by adapting current technology.”

In an ongoing project for the McKinsey Global Institute, these researchers and several of their colleagues have released updated findings in which they estimate that automation could raise productivity growth by 0.8 to 1.4 percent annually around the world, and that “about half of all the activities people are paid to do in the world’s workforce could potentially be automated by adapting currently demonstrated technologies.” James Manyika, Michael Chui, and Katy George discuss their research at the Harvard Business Review:

The most automatable activities involve data collection, data processing, and physical work in predictable environments like factories, which make up 51% of employment activities (not jobs) and $2.7 trillion of wages in the U.S. These activities are most prevalent in sectors such as manufacturing, food services, transportation and warehousing, and retail.

More occupations will change than will be automated in the short to medium term. Only a small proportion of all occupations (about 5%) can be entirely automated using these demonstrated technologies over the coming decade, though the proportion is likely to be higher in middle-skill job categories. But we found that about 30% of the activities in 60% of all occupations could be automated — and that will affect everyone from welders to landscape gardeners to mortgage brokers to CEOs. We estimate that about 25% of CEOs’ time is currently spent on activities that machines could do, such as analyzing reports and data to inform decisions.

The prospect of automation in the C-suite offers a lot of potential benefits in terms of enhancing executive productivity and improving decision-making, but raises as many questions about how organizations should structure and develop their leadership to prepare for an automated future. In any case, the researchers are careful to note that there are a lot of variables at play in the future of the workforce and the pace of automation is uncertain:

Even when the technical potential exists, we estimate it will take years for automation’s effect on current work activities to play out fully. The pace of automation, and thus its impact on workers, will vary across different activities, occupations, and wage and skill levels. Factors that will determine the pace and extent of automation include the ongoing development of technological capabilities, the cost of technology, competition with labor including skills and supply and demand dynamics, performance benefits including and beyond labor cost savings, and social and regulatory acceptance. Our scenarios suggest that half of today’s work activities could be automated by 2055, but this could happen up to 20 years earlier or later depending on various factors, in addition to other economic conditions.

Automation is happening more and more rapidly and at higher levels than anticipated, with artificial intelligence programs already beginning to replace human analysts in finance and insurance. The authors of the McKinsey report take a techno-optimistic view of the future of work, insisting that “humans will still be needed in the workforce: the total productivity gains we estimate will only come about if people work alongside machines.” The challenge, however, is in figuring out what to do about the generation of employees who are already losing their jobs to automated technologies and currently lack the skills to transition into the new roles that are being created.