UK: Talent For Survival - Essential Skills For Humans Working In The Machine Age

Last Updated: 30 September 2016
Article by Angus Knowles-Cutler and Harvey Lewis

Foreword

You may have heard that robots are coming for your job. Rapid advances in robotics, big data and artificial intelligence are beginning to disrupt entire industries, and technology is threatening to replace more than ten million UK workers. But a new debate is now raging between those who argue that we are ushering in an era of unprecedented technological unemployment, and those who claim that job prospects for people with the right mix of talent have never been better.

While the debate rages on, we have been examining the data that allows us to understand the changing demand for individual skills, knowledge and abilities caused by technology shifts.

Based on our analysis, we believe that, although Science, Technology, Engineering and Mathematics (STEM) skills and knowledge are important in an increasingly digital economy, the UK will benefit most from a workforce that has a balance of technical skills and more general purpose skills, such as problem-solving skills, creativity, social skills and emotional intelligence.

We forecast that by 2030, such will be the demand for these general purpose skills that meeting it will require the equivalent of at least 4.5 million additional workers in professional occupations. We have also found that social skills and cognitive abilities are valued most in our shifting economy – a 10 per cent increase in cognitive abilities equates to a 12 per cent increase in median hourly earnings. But not all important skills and knowledge contribute to wage increases: the UK still has some way to go before vital jobs in education, health and social care, and many other nationally significant industries, feel the benefits of a workforce with the right mix of skills.

The UK may have significantly fewer jobs at high risk of automation than the likes of the US, China, India and South Africa, but there is no room for complacency. There are considerable challenges that policymakers, educators, and businesses have yet to overcome.

This paper is the latest in Deloitte's ongoing 'Business futures' research programme, which aims to provide insights into business in the future. We are committed not only to examining the potential impact of digital technologies on the labour market, on occupations and on different sectors of the economy, but also to helping our own workforce and the community adapt to life in the machine age.

We hope that you find this paper useful and look forward to your feedback.

Introduction

" We should automate work and humanise jobs. Let's give the mundane to the machines and the purpose back to people."

The Rt Hon Matt Hancock MP1

Conventional wisdom suggests that growth, productivity and innovation in a digital economy all require a supply of workers with matching digital skills, knowledge and abilities. This theory is supported by a growing body of evidence, according to the recent Wakeham Review, which notes that the majority of growth sectors in the UK are characterised by their strong reliance on Science, Technology, Engineering and Mathematics (STEM).2

In anticipation of a continuing shift towards greater use of technology and automation, the UK government has already instigated numerous policy changes, including introducing a new National Curriculum for schools, to ensure that the future stock of workers can meet increasingly technical employment requirements. Yet unemployment rates among recent graduates of STEM degrees remain paradoxically high. Are we still waiting for the promised transformation of the economy? Do businesses really need workers trained in STEM? Or are the UK's schools and universities simply failing to produce young workers with the necessary skills and knowledge?

Neither the Wakeham Review nor its sister investigation, the Shadbolt Review of Computer Sciences, have been able to pinpoint a precise cause.3 But both reviews do highlight the critical importance to employers of a broader set of general purpose skills and knowledge, including 'soft skills'. And in their recent book, "Only Humans Need Apply: Winners and Losers in the Age of Smart Machines", authors Thomas H. Davenport and Julia Kirby argue that, "We're entering an era when these soft skills will be more important than ever, and for many people they will be the best hope of gaining and maintaining employment."4

Deloitte's previous research estimated that 35 per cent of the UK's jobs are at high risk of automation in the next 10 to 20 years as a result of the introduction of automation and other labour-saving technology.5 The UK's economy may well be less exposed to the effects of automation than some others – in China, for example, the number of jobs estimated to be at high risk of automation is 77 per cent – but this hasn't prevented the 'techno‑pessimists' from forecasting that humans will become obsolete in the future.6

The reality, though, is far more nuanced and positive than the headlines would suggest: advances in technology create new employment opportunities for people with the right skills and specialist knowledge. Last year, for instance, we looked across 140 years of history in the form of census and labour force data to demonstrate that technology creates more jobs than it destroys.7,8 Indeed, between 2001 and 2015, we estimated that even as technology had contributed to the loss of 800,000 jobs in the UK, it had helped to create 3.5 million more in the same period. Each new job pays, on average, an additional £10,000 per annum, resulting in a boost of £140 billion to the UK's economy in new wages.

This optimistic view is consistent with the principle of "stepping aside", introduced by Davenport and Kirby in their book, in which it is claimed that there will be more jobs that lay the emphasis on skills at the "humanlike" end of the spectrum rather than being focused on fact, recall, logic and computation.9 David Autor, the eminent MIT academic, suggests that, "journalists and even expert commentators tend to overstate the extent of machine substitution for human labour and ignore the strong complementarities between automation and labour that increase productivity, raise earnings, and augment demand for labour."10 And Carl Benedikt Frey, co-author of "The Future of Employment" and contributor to Deloitte's work on automation, says, "I think it unlikely that robots will enter the domain of complex social interactions or jobs that require creativity or perception, and manipulation of irregular objects."11,12

So while it feels intuitively necessary in an increasingly digital world for policymakers and educators to focus on the acquisition and application of STEM knowledge and skills in the workforce, STEM by itself is not sufficient to ensure future employability or economic prosperity. Instead, we need to consider what skills, knowledge and abilities are needed for the vast majority of jobs as well as those that provide workers with the flexibility to adapt to or specialise in a rangeof roles. Every worker needs a balanced 'kit bag' ofskills – not simply to avoid being substituted by machines but also to help them adapt to working alongside machines in a smarter, more efficient and productive economy.

This new research thus follows on from previous Deloitte studies into the impact of technology on jobs. Using detailed occupational data from the US Occupational Information Network (O*NET) and labour and earnings statistics from the Office of National Statistics (ONS), we assess the importance of 120 different skills, abilities and areas of knowledge in the workforce as the mix of occupations changes as a consequence of the introduction of smart machines and automation. We consider the impact nationally and also by main industry sector and occupational group. And, we forecast the likely impact that these ongoing shifts will have on the economy in 2030. Finally, we discuss the challenges that all organisations are likely to face, and provide a set of key questions for policymakers, educators and business leaders to answer.

Download Full Report >> Talent For Survival - Essential Skills For Humans Working In The Machine Age

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