The growth of digital business models and the equalizer that is digital communication has prompted more investment, and has driven a rise in profits among digitally-savvy companies.

But this has resulted in some disappointing effects in the labour market. As more and more businesses look for productivity through the use of technology, employment is falling away. This is leading to a skills gap wherein more workers are being left behind.

Jobs are taking longer to be created. The 2008 recession saw a longer gap to recreate jobs than any other recession since World War II. In the 1980s the length of time was 32 weeks – in 2008 that figure jumped to 46.

There is clearly a worrying trend in the labour market, with businesses losing workers by the millions. Particularly during the recent recession in the United States, millions of jobs were lost – which has led to more workers being left behind when it comes to training in digital business models and practices.

It is estimated that 47% of total US employment is at risk of which circa 20% is represented by knowledge workers. This includes types of occupations that can be potentially automated within a decade or two.

At the heart of this structural change is automation and new, digital methods taking over traditional industries.

Robotics

More businesses are relying on robotics than ever before. In the United States, factories are not only relying on assembly line robots but retail warehouses are using the technology to distribute goods quicker than ever before.

Quiet Logistics in the United States even uses these robots to take merchandise around a warehouse, and have it delivered back to its appropriate place.

This is in advanced version of what is already being seen in supermarkets and airports around the world – self-check kiosks are the new norm when it comes to these everyday retail and travel experiences.

As self-check out options, new automated processes and other robotic assistants appear in other retailers, this skills gap will only continue to grow.

Manufacturing

Advances in 3D printing technology is seamlessly linking the digital and physical worlds. As a result, demand is surging across all spheres: from consumer applications in the home, to different sectors such as retail, healthcare and aviation.

Most construction project costs can be split into three categories: finance, materials and labour. 3D printing could potentially erase significant amounts of money in bringing construction projects to market, through shorter project times and fewer wasted resources.

This technology could replace certain parts of a number of labour intensive trades, including builders, electricians and plumbers.

Smaller companies with access to 3D printing services will be able to create their own prototype products and bypass parts of the manufacturing process, putting more power into the hands of start-ups.

This is already starting. A recent Kickstarter campaign to fund a small, consumer-focused 3D printer blew past its $50,000 goal within hours, and raised more than $3 million. The demand is clearly here for 3D printing – and its popularity is set to transform the construction industry forever.

More training necessary

The amount of jobs being replaced by robotics and other digital methods, including software, won’t stop rising. Even in knowledge-based industries, jobs are under threat.

Within existing businesses there is a serious risk of a skills deficit, wherein workers do not have access to the information and skills necessary to drive productivity in a new digital era. Without trained and knowledgable workers, businesses are more likely to fall behind.

Google, for instance, has initiated a program called ‘Googler to Googler’ which allows employees from different departments to teach other employees. While most of these classes are focused on management and skills training, there is no reason it couldn’t be adopted for digital management. .

This type of training is crucial for businesses to survive. If businesses are to remain productive, breaking down silos between organisational departments and allowing access to new skills, knowledge and training will unleash huge amounts of potential.

Even simple methods like allowing employees to organise and train each other can help. What are you doing to ensure that future is coming sooner rather than later?


To find out more about the increasing value of data and other digital trends, please visit our Digital Innovation research site and download your free report.

 

Contributor

John Riccio

John is PwC’s Global Design & Deploy, Experience Consulting partner.

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