Is your business prepare for the digital revolution? The world of work has constantly evolved since the dawn of time. While many of these changes have taken place gradually, without too much upset to our daily routines, some events have caused work and employment to change rapidly — in particular the three Industrial Revolutions.
The First Industrial Revolution involved the use of steam power to revolutionise the way things were done. The Second drew upon the power of electricity to enable mass production.
The Third took advantage of computers and information technology to change the way we communicate.
Now, the world is on the precipice of a Fourth Industrial Revolution (also known as Industry 4.0 in some circles) — the digital revolution — that promises to change the future of our planet, our wellbeing, and our work. Take a look at the short video below.
How will it change the face of work?
As you can see, the impacts of this new revolution are far-reaching. It will change the way we think and the way we work. The World Economic Forum has predicted that by the year 2020, around five million jobs will be lost globally, due to advances in technology.
Artificial intelligence, robotics, nanotechnology, 3D printing and biotechnology will all be utilised in the workforce — changing the way we do business, and the kinds of jobs that will be available.
While experts are still unsure how this Fourth revolution will unfold, they are clear that business models of every industry will be transformed, and that those who will succeed in the future economy are those who can adapt to change.
Which industries are likely to be affected?
A recent report, Towards a Reskilling Revolution, developed by the World Economic Forum (in collaboration with The Boston Consulting Group and Burning Glass Technologies), focused on the US job market.
Researchers utilised a database of occupational information that included required skills, knowledge, abilities, education, training, and experience to perform a job.
This database groups individual jobs into clusters of related professions or ‘job families’; for example Office and Administrative; Farming, Fishing and Forestry; Business and Financial Operations; and Healthcare Practitioners and Technical. It should be noted however, that traditional white-collar and middle management jobs were not included in this model.
All job families are expected to experience significant upheaval, but especially Production roles, and Office and Administrative, where overall roles are expected to decline.
While the Production family is expected to see a significant decline in the net number of jobs available, the Office and Administrative family (like many others) is expected to see new job gains, which will offset the decline of more traditional roles.
Changing jobs…instead of losing them
Until now, there have been few practical ways to identify and map out realistic job opportunities for those facing redundancy or retrenchment. However, with the recent development of a job-fit matrix, employers, can now identify which current jobs can transition into other roles.
Focusing on US workers whose jobs are expected to disappear with the advent of new technology, researchers looked at how they could transition into another role, based on the skills, job knowledge, education and experience they already had.
They then developed a job-fit index or matrix to measure the similarity between each pair of 958 job types.
For example, a computer programmer and web developer have a high job-fit, while a computer programmer and anthropologist have a low-job fit. It’s expected that job transitions won’t be limited to the same job family either, with experts forecasting that as many as 70 per cent will require the individual to shift into a new job family.
The need to upskill
However, workers won’t be able to simply ‘swap’ one job for another. In most cases, they will need to upskill, or re-skill, which will take time. And this presents a challenge for Australian businesses, that will need to factor in the time and money it will take to re-train staff.
Depending on job family transition, data has found that workers looking for career pathways that will maintain or grow their current salary, can expect to need two years of extra education and two years of additional work experience.
On the other hand, those more concerned with moving into another job, and being willing to accept lower wages in the short term, will only need one year of extra education.
A 2017 report by McKinsey & Company found that digital innovation is moving quickly, disrupting work and creating opportunities.
However, digitisation across Australia is uneven and still a way from reaching its full potential. While digital growth has doubled in the past five years, asset intense industries have lower digitisation than their US counterparts.
Jobs website Seek, believes there is a lack of highly skilled workers in Australia, required for the digital transformation.
In order to combat this, businesses not only need to invest in understanding and adopting technologies to support growth and opportunities, but they need to invest in their staff as well.
The challenge for Australian businesses
Industry 4.0 will impact the Australian economy and change the structure of Australian business. However, Australia is in a unique position and is poised to take advantage of the challenges and opportunities that this new revolution will have on our world of work — but only if they invest in their staff, to enable them to transition into new roles within their organisations.
Many Australian businesses currently have large numbers of staff who don’t have the skill sets required for a digital transformation.
Unless businesses support current workers in upskilling, or re-skilling, then Australia as a whole will have a large population of ill-equipped workers.
In a 2016 speech on the changing nature of Australia’s workforce, Alexandra Heath, Head of Economic Analysis Department at The Reserve Bank of Australia, highlighted that technological change will not only change core skills required, but the way work is organised.
“It seems likely that the ‘psychological contracts’ between employees and employers will increasingly focus on providing opportunities to develop competencies and expectations around work-life balance, rather than on life-long job security.”
Heath also believes that a diverse workforce will greatly enhance the ability of workplaces to adapt to changing circumstances. Diversity of thought, diversity in problem solving skills, and diversity in skills and experience, will all be key factors.
What skills will we need?
With the advances in technology, it’s clear that the skills required will be those that can’t be replicated by technology. The World Economic Forum’s 2016 report, The Future of Jobs, found that, by 2020, 35 per cent of core skills required to perform most jobs across all types of occupations, will change.
As routine, manual tasks will be replaced by technology, more time will be spent working with others and on cognitive tasks. Skills such as complex problem solving, critical thinking, and creativity will be in demand, as will people management skills.
5 ways businesses can prepare for the digital revolution
Taking advantage of the latest revolution is more than just embracing technology. It’s about adopting a new approach to systems, harnessing talent, developing processes, and being open to change. No doubt there will be as many challenges as there will be opportunities, but if businesses can rise to the challenge, the future looks very bright.
Here are our top five tips for businesses to make the most of these opportunities:
1. Be prepared for the pace at which digital technology will change business. It’s anticipated that
changes brought about by Industry 4.0 will occur very quickly.
2. Be proactive and work with department heads and external consultants to develop a clear vision
of jobs families both present and future.
3. Utilise data to identify which roles in your organisation will become redundant, and how you can
transition current staff into those roles.
4. Provide learning both internally and externally to support and engage your employees, in their
efforts to upskill.
5. Source digitally aware talent, and people who can help your organisation make a successful
digital transformation.
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