A Closer Look

Many activities that workers carry out today have the potential to be automated

Technological change has reshaped the workplace continually over the past two centuries since the Industrial Revolution, but the speed with which automation technologies are developing today, and the scale at which they could disrupt the world of work, are largely without precedent.

MGI research on the automation potential of the global economy, focusing on 46 countries representing about 80 percent of the global workforce, has examined more than 2,000 work activities and quantified the technical feasibility of automating each of them. The proportion of occupations that can be fully automated using currently demonstrated technology is actually small—less than 5 percent. An additional important finding is that even if whole occupations are not automated, partial automation (where only some activities that make up an occupation are automated) will affect almost all occupations to a greater or lesser degree. The impact will be felt not just by factory workers and clerks but also by landscape gardeners and dental lab technicians, fashion designers, insurance sales representatives, and even CEOs.

We find that about 60 percent of all occupations have at least 30 percent of activities that are technically automatable, based on currently demonstrated technologies. This means that most occupations will change, and more people will have to work with technology. Highly skilled workers working with technology will benefit. While low-skilled workers working with technology will be able to achieve more in terms of output and productivity, these workers may experience wage pressure, given the potentially larger supply of similarly low-skilled workers, unless demand for the occupation grows more than the expansion in labor supply.

On a global scale, we calculate that the adaptation of currently demonstrated automation technologies could affect 50 percent of the world economy, or 1.2 billion employees and $14.6 trillion in wages. Just four countries—China, India, Japan, and the United States—account for just over half of these totals. There are sizable differences in automation potential between countries, based mainly on the structure of their economies, the relative level of wages, and the size and dynamics of the workforce.

As machines evolve and acquire more advanced performance capabilities that match or exceed human capabilities, the adoption of automation will pick up. However, the technical feasibility to automate does not automatically translate into the deployment of automation in the workplace and the automation of jobs. Technical potential is only the first of several elements that must be considered. A second element is the cost of developing and deploying both the hardware and the software for automation. The supply-and-demand dynamics of labor are a third factor: if workers with sufficient skills for the given occupation are in abundant supply and significantly less expensive than automation, this could slow the rate of adoption. A fourth to be considered are the benefits of automation beyond labor substitution—including higher levels of output, better quality and fewer errors, and capabilities that surpass human ability.

Finally, regulatory and social issues, such as the degree to which machines are acceptable in any particular setting, must also be weighed. It is for these various reasons that go beyond purely technical feasibility of automation that our estimates for “whole-job” automation are lower than other estimates. Our scenarios suggest that it may take at least two decades before automation reaches 50 percent of all of today’s work activities, taking into account regions where wages are relatively low.

Chosen excerpts by Job Market Monitor. Read the whole story at Technology, jobs, and the future of work | McKinsey & Company

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