The impact of next level automation – artificial intelligence (AI), robotics, machine learning and cognitive computing – is expected to cause major disruption, with many traditional jobs phased out or redesigned for the new digital work era.
Industry sectors, education, training organisations, unions and the government are scrambling to come up with coping strategies ahead of the upheaval predicted by a succession of reports and studies.
The latest EIT Hawke’s Bay Growth Study confirms many of the region’s larger businesses have serious concerns about employment needs into the 2020s even before they’ve adopted leading edge technology.
While EIT has only analysed a few sectors and is still in data collection mode, research director Jonathan Sibley says labour force concerns for the next 5-8-years will impact our future economic prosperity.
Sibley was surprised to find labour shortages at every level in the primary sector, our largest employer, with many of those jobs, including packhouse workers, requiring greater competency in the use of technology.
The Hawke’s Bay digital sector also faced shortages for the foreseeable future alongside the quandary of how to attract and retain talented people.
Although these digital innovators, many operating under the radar, typically employed less than twenty people, Sibley says their success is essential for growth in other areas, including the primary sector.
Gary Bolles, chair for the Future of Work at Singularity University in California, says we need to be better prepared for technological disruption to the structure of organisations, the nature of work, leadership, and how we educate, train and use our skills.
Bolles, on his sixth trip to New Zealand, told Hawke’s Bay business leaders they need to develop strategies that anticipate exponential change as the old rules for life – the ‘three boxes’ of bulk learning, work or career, then retirement – are no longer relevant.
He says digitally driven organisations will be flatter, more efficient and flexible, and accommodate more technically astute and adaptable employees, including contractors and part-timers who are team players.
Bolles says ‘jobs’ were traditionally created through the shift from an agricultural to an industrial society. “When you worked on a farm there were a bunch of things you had to do, but a job was more structured around the things the employer needed doing.”
Work, he says, is being redefined as a problem to be solved, with doctors, lawyers and others using their knowledge to find solutions.
“We are problem solvers…trial and error engines. We make mistakes and learn that there are certain skills we are good at and certain tasks we can optimise based on opportunities, experience and exposure.”
Organisations need adaptable processes around how they hire, develop and train managers who can enable and resource problem solvers.
Rote learning, inflexible workplaces, ‘stern parent’ management techniques and narrow job descriptions are no longer acceptable.
By 2020, the World Economic Forum forecasts over a third of skills considered important in today’s workforce will have changed, important new skills will include cognitive flexibility and the ability to problem solve and manage digital labour and hybrid workforces (human/ machine partnerships).
A 2018 OECD policy brief claimed 14% of jobs across member nations would be replaced by automation and a further 32% significantly changed, with low-skilled and young people most at risk. It said adaptable education systems were a priority to address that.
In Hawke’s Bay it’s not so much job losses that are a concern, but rather job vacancies. There’s already a drought of engineers, tradespeople and the technically-skilled.
And elsewhere in the job market, there’s a dire shortage of pickers and pruners (and at every level in the sector), with orchardists again appealing for easier access to imported and visiting workers. The EIT study suggests local young people in particular are unavailable – not work fit, unwilling to work or unable to pass drug tests. A kinder official response is that low unemployment levels mean a short supply of willing seasonal outdoor workers.
One observation is that Work and Income’s long stand-down period – for those who work more than 30 hours a week for longer than six months – is part of the problem. Some ask, why would they bother when the money is only marginally more than the dole, and at season’s end they have to live off those earnings while waiting to get back on the queue?
The region is dependent on the Recognised Seasonal Employer Scheme (RSE) importing mainly Pacific Island workers to counter annual labour shortages during apple harvest from February to May.
Paul Paynter of Yummyfruit warned if there aren’t enough workers this year orchardists may prioritise high quality, high value fruit, leaving up to $60 million worth on the trees.
A paucity of pickers presents a massive impediment to industry expansion. High demand and larger harvests meant 2018 crops were 22% bigger than 2017, requiring 7,000 peak season workers.
Work and Income declared a seasonal labour shortage in mid-January 2018, enabling limited work permits for international visitors. Despite an even bigger harvest predicted in 2019, requiring around 2,600 extra workers, officials delayed their decision on a six week permit until mid-February.
Back in November the Government boosted RSE numbers by 1,750, but the 600 targeted for Hawke’s Bay was soon pruned to 400 with no explanation given.
A review of the RSE scheme was promised sometime in 2019, with the Government urging growers to do more to attract local workers; the unions weighed in with a stinging volley insisting they pay more and stop exploiting foreign workers.
Meanwhile the big players – already automating quality control, packing and stacking – are planting in fruit walls to reduce the need for ladders, while planning a decade or more ahead when machine picking can replace human labour. [See following article for more views on seasonal needs.]
The skill scare exists across industries and is only going to get worse as technology displaces mundane and semi-skilled tasks and demand increases for workers with good social and technical skills who can learn on the job.
Professional services giant PricewaterhouseCoopers (PwC) warns businesses to embrace change or be changed by the converging forces of technology, connectedness, globalisation, volatile economies and shifting employee and consumer demand.
PwC Digital Services New Zealand director Mini Prasad says disruption is the new norm bringing unprecedented change, whether from automated vehicles or augmentation of roles through virtual assistants.
PwC’s report on the future of work says Robotic Process Automation (RPA), digital learning and cognitive computing will transform the digital labour market. RPA already automates rules-based and routine tasks and it’s predicted a quarter of workflow in all industries will use this by 2021.
Machine learning undertakes tasks and solves problems previously in the human domain and cognitive computing identifies patterns and relationships to assist in decision making.
The technology sector is already New Zealand’s third largest exporter, contributing over $1.6 billion to GDP and employing over 100,000 people, aiming to be the second largest earner by 2025.
Prasad says the Government needs to invest in its digital strategy to take advantage of this global revolution as geographical barriers continued to disappear.
The PwC report predicts three waves of automation – the first impacting 2-3% of jobs and the second ‘augmentation wave’ until the late 2020s, changing 20% of jobs through advances in drones, robots in warehouses and semi-autonomous vehicles.
The third or ‘autonomy wave’ will affect 30% of jobs with machines analysing data, making decisions and taking physical action with little or no human input.
Prasad says many jobs will be reconfigured and redesigned causing disruption through job dislocations and a requirement to learn new skills. This will likely lead to a “hollowing out” of middle-income jobs including medical, legal and finance professionals who will be replaced by cognitive platforms.
On the positive side, technology is expected to create operational efficiencies, freeing up people from “mundane transactional tasks” for more complex “value creation activities”.
In an attempt to prepare for this rocky terrain the Government, Business New Zealand and the Council of Trade Unions are collaborating through the Future Work Forum (FWF) to inform policy and help workers and businesses adapt.
Prime Minister Jacinda Ardern says we need a robust plan to stay ahead of the curve and “avoid the mistakes of the past where economic shocks damaged communities up and down New Zealand.” The PM says the economy needs to be future-proofed for environmental sustainability, climate change and the fact that 40% of today’s jobs will not exist in a few decades.
The FWF is looking to better define the Government’s role in this massive shift. It has commended manufacturing industry efforts to identify changes and opportunities in workforce transitions and wants to remove barriers faced by small and medium enterprises (SMEs) as they deal with technological disruption.
It’s addressing education and ways to overcome the country’s “lacklustre productivity” through pooling of resources and ideas as more jobs are automated and sunset industries are created in response to climate change and changing consumer tastes.
The FWF says education needs to prepare for “future working styles” with better career training and pathways, while workplaces need to be more adaptable and resilient.
Learning on the job
Visiting expert Gary Bolles warns the education system cannot leave transferable skills to chance as students now live in a world of instantly available information that will be embedded in the work they do. Secondary schools, “distorted by governments and set standards”, will have to become more adaptive or face challenges from innovators and alternative schooling.
Higher education, he suggests, is at even greater risk with people training for careers or qualifications that may no longer be relevant. “Of the 2,200 place-based colleges in the US last year 25% ran at a deficit.”
Bolles asks, why we need a four to six-year degree in AI or robotics programming when all the techniques will have changed by graduation time. “Going to a code camp you can work on shipping products and learn much faster.”
According to management consultancy firm Scarlatti, only 4% of school leavers are involved in an on-the-job tertiary education; that’s 145,000 students employed by 25,000 employers, more than the number of domestic students at our universities.
The country’s 11 Industry Training Organisations (ITOs) are backing an initiative to qualify more apprentices and trainees to meet skill shortages across construction and manufacturing to primary, social services and the creative sector. The ITOs are appealing to the Government to provide greater incentives for businesses to upskill their employees.
While the internet has been applauded as the great game changer, Bolles says few realised it would place so much power into the hands of those who already had power, resulting in the pyramid collapsing in the middle impacting most of the western economy.
Amazon, Google and Facebook, after figuring how various industries worked and where the higher value was, took all the pieces apart and built the most dominant opportunity.
On the positive side, it’s more affordable to start a company or enter a market. That means a continual opportunity to build entrepreneurial capabilities.
Many of the technological shifts we’re facing are science fiction-like scenarios, from wider use of smart drones to human-like digital assistants, AI, cellular agriculture (biotech) and robotic surgery. Bolles believes the surprises will keep coming like Uber and smart self-driving cars which continue to have a ripple effect across the transport industry.
The Black Fly flying car is ready for market as are Airbus drones; “you’ll have an app that will tell you to go to a nearby tall building for pick up”.
Then there’s Epibone that grows bone from your own cells, the vertical farm in Tokyo producing 11 million heads of lettuce a year … and training, he says, is already underway for mining asteroids. “This next generation is being trained to solve cancer and colonise planets.”
Sharp curve ahead
And it’s still early on the business transformation curve. In the computing age, says Bolles, we’ve continued to operate on Moore’s Law of incremental power and capability coming at ever reducing cost. And if internet pioneer Ray Kurzweil’s ‘law of accelerating returns’ kicks in, we could be in for another wave of exponential growth.
Bolles is expecting a paradigm shift, a “technological change so rapid and profound it represents a rupture in the fabric of human history,” possibly around 2045. He’s also something of a fantasist, imagining a brain to machine (B2M) interface as part of that.
Back in the real world, Bolles says we’re only going to see more bad news about job losses, so businesses should prepare by moving away from hierarchical management to act more like a network. That’s a structure, he suggests, that can better accommodate a creative workforce that thrives on constant change, embracing lifelong learning and collaboration.
This generation, he says, operate in “an arc of constant change” rather than the linear model. After school they might take a gap year, then a day job while working on a start-up with friends, drive for Uber at night, then take more time off.
“It’s a mash up, a portfolio of work with people constantly moving forward to get the best use of their skills, working on problems they like to solve and constantly testing new things out.”
Some companies are incubating start-ups on site to innovate and develop their portfolio. For example, Google engineers are given 20% of their time or a day a week to come up with new ideas. “That’s how Gmail evolved.”
Valuable CV qualities for the evolving workplace will include transferable skills, psychological diversity, critical and creative thinking, being a good cultural fit and the ability to adapt “individual super powers to align with the goals of an organisation”.
The pathway to work will be more about apprenticeships, part time employment and unbundling work so workers get a better idea what they’re committing to. To top it off, says Bolles, those employees will be looking for a sense of purpose, something that is a good fit with why they’re on the planet.
Challenge for unions
In New Zealand, as the debate about the future of work heats up, we’re seeing more union-led strike action than we have for decades, with nurses, teachers, doctors and others in key sectors complaining they’re undervalued, overworked and underpaid.
A January survey by the Council of Trade Unions (CTU) suggests around two-thirds believe income hasn’t kept pace with the cost of living, despite more than half of those surveyed taking on additional work.
CTU president Richard Wagstaff says it’s an indictment on the nation that work is unfulfilling for so many, something that can only reflect on the mood of workers and the economy.
Asked whether unions were facilitators or inhibitors in the evolving digital work environment, Gary Bolles says we’re entering an era “where the collective action of workers and their power is eroding”. In the US, “We’ve not had a net gain in the average income of the middle-class worker since the 1970s.”
While Uber challenges the traditional model it offers no employee protection. They’re very clear, says Bolles, the moment self-driving cars go mainstream their workers are gone.
While collective action or bargaining attempts to balance the scales “for employees in the box”, new models are emerging, including the “two-sided work market” where the hirer always gets the best service at the lowest price.
Urgent discussion needed
This next wave technology revolution is a two-edged sword, enhancing efficiency and creating new and more skilled positions, while severely reducing the need for less skilled work.
In Hawke’s Bay many employers are caught between worlds. According to EIT’s study there’s already a huge deficit of people for basic labouring tasks and the technical skills needed to grow businesses.
Around 89% of those involved in fruit and vegetables, meat and wool and food production areas will need new technical skills over the next 5-8-years, which more than half of employers say are “probably not available”. Transport and logistics face a similar challenge.
Meantime, the proportion of youth not in employment education or training in Hawke’s Bay is 50% higher than the national average.
One attempt to address this is the Government’s $3 billion Provincial Growth Fund (PGF), designed to create jobs in the regions, particularly in training young people, but barely off the ground. Around $60 million will be invested in Te Ara Mahi (Pathways to Work), a new scheme to stimulate employment and boost skills in five ‘surge’ regions which had “high unemployment, low wages and low productivity”, including Hawke’s Bay.
Despite training programmes and significant effort by orchardists to get young people involved in primary industries, EIT’s Jonathan Sibley can find no clear reason for the reluctance to engage. “It’s a major issue…there’s a sea change going on.”
But he warns, it’s too easy to blame the millennial generation, suggesting the industry needs to take some responsibility to better understand the way young people operate and remove barriers to employment.
That might include reviewing how the work is perceived, job structures, payment and other constraints that make the sector less attractive to seasonal and other workers.
One of the key reasons EIT is conducting these ‘limits to growth’ surveys – the first of their kind in the region – is to help determine future training needs. The results so far suggest an urgent need for a serious conversation with central and local government, employers and schools on how to address this looming crisis.
Challenging questions will include who pays for the upskilling when it’s not going to add to the short-term bottom line, and what happens to the new unemployable or displaced?
Facilitating this transition will require a major rethink of education and training, recruitment, job descriptions, workplace and Work and Income approaches.
With employers being urged to think more creatively, and many already struggling under a mountain of administrivia, we may also need to review our addiction to a form-filling bureaucracy that often seems more geared to crushing innovation than encouraging it.