Posted by: dstieglitz | November 29, 2013

DISRUPTIVE TECHNOLOGIES

“The task of a leader is to get people from where they are to where they have never been.”  – Henry Kissinger

      McKinsey Institute projects that by 2030 disruptive technologies like mobile computing, 3-D printing, robotics, an Internet of things, and DNA engineering will eliminate more than 2 billion existing jobs – that’s about half of all jobs on Earth. Entire industries will disappear. On the other hand, McKinsey says the technologies will generate over $30 trillion per year in economic activity and billions of new jobs. But the new jobs will require skills that are in short supply today. Our business plans and political debates should focus on that skills deficit rather than the budget deficit.

Third Industrial Revolution.  The first industrial revolution began in textiles and agriculture during the 19th century. Tedious tasks performed in weavers’ cottages and farmers’ fields were mechanized. The second revolution occurred in the 20th century when Henry Ford used an assembly line to mass produce autos in sprawling factories. The 21st century’s digital revolution is changing not only how products are made, but where. The nature of labor is changing and production is moving closer to customers. Factories of the future will produce customized goods in an environment more like cottages and fields than Ford’s factories. People who produce goods and services will be in continuous electronic contact with engineers, sales and marketing people, logisticians, and other experts around the world. 

    Jobs Deficit.  Today’s jobs deficit – roughly 20 million Americans are unemployed or under-employed – will get worse before it gets better. For example:

  • Driverless vehicles may eliminate millions of jobs when taxis, buses, trucks and delivery vans become driverless. That will also shrink the need for gas stations, parking lots, and traffic cops.
  • 3-D printers may be used in retail, health care, and construction in addition to manufacturing. Printed clothes and shoes could be produced while you wait in your local shopping mall.
  • Mobile devices will enable people to work anywhere, thus reducing the need for central offices and eliminating rush-hour traffic jams.
  • An Internet of things (i.e., smart systems) will connect virtually everything with powerful sensors that enable a shift from owning things to renting them when needed.

Unemployed workers don’t care why their jobs are disappearing. But leaders in industry and governments must consider these structural changes because they necessitate retraining virtually the entire workforce and retooling business models.

    Jobs Related to Basic Needs.  In addition to jobs related to applied technology, millions of new jobs will be created to fill the basic needs of an expanding and aging population. Specifically, lucrative opportunities are projected in:

(1) life sciences and health care,

(2) energy production and distribution,

(3) safe foods and clean water, and

(4) hospitality and leisure activities.

For example, demand for products that ensure safe food (e.g., smart tags, tracking systems, disinfectants, and packaging) is already growing rapidly as a result of recent food contamination incidents and new safety regulations.

Skills Divide.  Technology is dividing workers into winners and losers: those who are skilled at working with automation and those who are replaced by it. Furthermore, the gap between the skills for high-paying jobs and the typical skills of students and unemployed workers is widening. In September, the Labor Department estimated there were four million vacant positions that demand science, technology, engineering and math (STEM) skills. For example, manufacturing vacancies require workers who can set-up, operate, and maintain smart equipment. There’s also a shortage of entry-level workers with basic STEM skills such as the ability to read and follow a basic blueprint.

Building Jobs Pipeline.  Technology has changed the way every business and organization operates – but the speed of the change is being taken too lightly. Building an education-to-employment pipeline that connects people to good jobs over a lifetime will require policy changes, educational reform, and public-private partnerships. Educational institutions, businesses, and governments seem to be stuck in 20th century thinking – the same can be said of unions, associations, and civic organizations. The rising skills bar is pushing businesses to home grow talent to stay competitive. But businesses can’t meet the challenge alone.

Can Washington Keep Up?  Consumers are enthusiastically adapting to the Internet age of on-line purchases delivered quickly and cheaply. Private-sector companies are also adapting because the market severely punishes those who are slow to change. The same is true for the military except the stakes are literally life or death – which is why many technologies sprout in military applications. However, Washington is struggling to understand the new world, let alone enact relevant rules in a timely way. Government would do best to stick to fundamentals: better schools and worker training, a level playing field for entrepreneurs, and modern infrastructure to support commerce.

Disrupt Your Operation.  Leaders must be willing to disrupt current operations in order to take people where they have never been – an especially daunting challenge for government and successful businesses. Disruptive advances require businesses and governments to coordinate their initiatives. Washington should incentivize state and local governments and businesses to train future employees and sharpen workers’ skills. Industry should collaborate with communities to create vocational programs and offer internships for high school students and unemployed workers. Educators should push every student toward STEM learning to ensure they are not replaced by machines but instead learn how to use and maintain them. And students should teach their elders how to integrate social media into daily activities. Those who lead the change and adapt to the change will prosper. Those who don’t, won’t.

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: