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Extractive summaries and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision-making | Since September 2017 | Week 308 | August 4 – 10, 2023

Generative AI and the future of work in America

By Kweilin Ellingrud et al., | McKinsey & Company | July 26, 2023

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The US labor market is going through a rapid evolution in the way people work and the work people do. Months after McKinsey Global Institute released its last report on the future of work in America, the world found itself battling a global pandemic. Since then, the US job market has come roaring back from its sudden drop. The nature of work has changed as many workers have stuck with remote or hybrid models and employers have sped up their adoption of automation technologies. More recently, the accelerated development of generative AI, with its advanced natural language capabilities, has extended the possibilities for automation to a much wider set of occupations.

Amid this disruption, workers changed jobs at a remarkable pace—and a subset made bigger leaps and moved into entirely different occupations. Some 8.6 million occupational shifts took place from 2019 through 2022. Now even more change is in store. An additional 12 million occupational shifts are expected by 2030. The total number of transitions through 2030 could be 25 percent higher than McKinsey projected a little over two years ago.

Multiple forces are set to fuel growth in certain occupations and erode jobs in others. They generally fall into three categories: automation, including generative AI; an injection of federal investment into infrastructure and the net-zero transition; and long-term structural trends such as aging, continuing investment in technology, and the growth of e-commerce and remote work.

Across a majority of occupations (employing 75 percent of the workforce), the pandemic accelerated trends that could persist through the end of the decade. Occupations that took a hit during the downturn are likely to continue shrinking over time. These include customer-facing roles affected by the shift to e-commerce and office support roles that could be eliminated either by automation or by fewer people coming into physical offices. Declines in food services, customer service and sales, office support, and production work could account for almost ten million (more than 84 percent) of the 12 million occupational shifts expected by 2030.

By contrast, occupations in business and legal professions, management, healthcare, transportation, and STEM were resilient during the pandemic and are poised for continued growth. These categories are expected to see fewer than one million occupational shifts by 2030.

For the other categories that account for the remaining one million occupational shifts still to come, the pandemic was a temporary headwind. Employment in fields like education and training should rise in the years ahead amid a continuous need for early education and lifelong learning. Demand for construction workers also stalled during the height of the pandemic but is expected to rebound strongly.

The changes estimated in McKinsey’s earlier research are happening even faster and on an even bigger scale than expected. It is becoming even more urgent to solve occupational and geographic mismatches and connect workers with the training they need to land jobs with better prospects. The fact that workers have been willing to pivot and change career paths, while a tighter labor market encouraged companies to hire from broader applicant pools, gives cause for optimism—but not complacency. The future of work is already here, and it’s moving fast.

3 key takeaways from the article

1. The US labor market is going through a rapid evolution in the way people work and the work people do.  Workers changed jobs at a remarkable pace—and a subset made bigger leaps and moved into entirely different occupations. Some 8.6 million occupational shifts took place from 2019 through 2022. Now even more change is in store. An additional 12 million occupational shifts are expected by 2030.
2. Multiple forces are set to fuel growth in certain occupations and erode jobs in others. They generally fall into three categories: automation, including generative AI; an injection of federal investment into infrastructure and the net-zero transition; and long-term structural trends such as aging, continuing investment in technology, and the growth of e-commerce and remote work.
3. The changes are happening even faster and on an even bigger scale than expected. It is becoming even more urgent to solve occupational and geographic mismatches and connect workers with the training they need to land jobs with better prospects.

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Topics:  Employment, Technology, Global Economy