Where are the jobs?
Jobs are not only being outsourced to people other countries, but they are being othersourced to automated workers. Jared Weiner, a futurist and consultant at Weiner Edrich Brown, notes that we’ll see more white-collar jobs lost to software algorithms, intelligent computers, and robotics. While automation has already had a significant impact on manufacturing, we are just beginning to see the impact of artificial intelligence on the traditional professions.
He notes that the financial services industry is becoming increasingly othersourced, and is experiencing a modern industrial revolution of its own. According to Weiner, “those jobs are not going to return – they can be done more efficiently and error-free by intelligent software.”
Industries that undergo this transformation don’t disappear, but the number of jobs that they support changes drastically. Consider the business of agriculture, which employed half the population in the early 1900’s but now provides just 3% of all jobs. The U.S. is still a huge exporter of food; it is simply far more efficient now in terms total output per farm worker.
Since 1970, manufacturing jobs as a percentage of total employment have declined from a quarter of payrolls to less than ten percent. Some of this decline is from outsourcing, some is a result of othersourcing. Those looking for a rebound in manufacturing jobs will likely be disappointed. These jobs will probably not be replaced – not in the U.S. and possibly not overseas, either.
This is all a part of the transition towards a post-industrial economy.
David Autor is an economist at MIT who has developed some useful insights on the impacts of outsourcing and othersourcing. According to Autor, the jobs that are currently being lost involve middle-skilled cognitive and productive activities. These tasks follow clear and easily understood procedures that can reliably be transcribed into software instructions or subcontracted to overseas labor.
Autor writes that labor markets worldwide are rapidly becoming polarized and he sees a clustering of job opportunities at opposite ends of the skills spectrum.
At one end of the spectrum are low-paying service-oriented jobs that require personal interaction and the manipulation of machinery in unpredictable environments. Examples might include driving a vehicle in traffic, cooking food in a busy kitchen, or taking care of cranky pre-schoolers. Unless people decide to freight their toddlers to India for cheaper childcare, these tasks will still need to be performed locally.
Personal judgment and common sense can be important in even the most basic service jobs. “The added value of the worker is during the non-routine parts,” says Autor. This might include a truck driver navigating an eighteen-wheeler through road construction or a security guard identifying suspicious activity at a department store.
To the extent that many service jobs involve human interaction, they also require skills such as empathy and interpersonal communication. Good employees can see things from the perspective of their customers.
At the other end of the spectrum are jobs that require creativity, ambiguity, and high levels of personal training and judgment. These jobs tend to pay well, because they require skill sets that are more difficult to replicate.
The job opportunities of the future require either high cognitive skills, or well-developed personal skills and common sense. In a nutshell, people will need to be either “smart” or “nice” to be successful (preferably both!)
Luddites should take notice – computers just might push us to do work that is meaningful and enables us to become better people. The activities that make us human – thinking, dreaming, learning, communicating, and feeling, are the skills that are the most difficult to program. In a contest of “man vs. machine”, people will continue to shine and outperform in these areas for years to come.