November 7, 2015

WINNING THE WAR ON WAGES:

Four fundamentals of workplace automation : As the automation of physical and knowledge work advances, many jobs will be redefined rather than eliminated--at least in the short term. (Michael Chui, James Manyika, and Mehdi Miremadi, November 2015, McKinsey & Company)

Our research is ongoing, and in 2016, we will release a detailed report. What follows here are four interim findings elaborating on the core insight that the road ahead is less about automating individual jobs wholesale, than it is about automating the activities within occupations and redefining roles and processes.

1. The automation of activities

These preliminary findings are based on data for the US labor market. We structured our analysis around roughly 2,000 individual work activities,5 and assessed the requirements for each of these activities against 18 different capabilities that potentially could be automated (Exhibit 1). Those capabilities range from fine motor skills and navigating in the physical world, to sensing human emotion and producing natural language. We then assessed the "automatability" of those capabilities through the use of current, leading-edge technology, adjusting the level of capability required for occupations where work occurs in unpredictable settings.

The bottom line is that 45 percent of work activities could be automated using already demonstrated technology. If the technologies that process and "understand" natural language were to reach the median level of human performance, an additional 13 percent of work activities in the US economy could be automated. The magnitude of automation potential reflects the speed with which advances in artificial intelligence and its variants, such as machine learning, are challenging our assumptions about what is automatable. It's no longer the case that only routine, codifiable activities are candidates for automation and that activities requiring "tacit" knowledge or experience that is difficult to translate into task specifications are immune to automation.

In many cases, automation technology can already match, or even exceed, the median level of human performance required. [...]

3. The impact on high-wage occupations

Conventional wisdom suggests that low-skill, low-wage activities on the front line are the ones most susceptible to automation. We're now able to scrutinize this view using the comprehensive database of occupations we created as part of this research effort. It encompasses not only occupations, work activities, capabilities, and their automatability, but also the wages paid for each occupation.6

Our work to date suggests that a significant percentage of the activities performed by even those in the highest-paid occupations (for example, financial planners, physicians, and senior executives) can be automated by adapting current technology.7 For example, we estimate that activities consuming more than 20 percent of a CEO's working time could be automated using current technologies. These include analyzing reports and data to inform operational decisions, preparing staff assignments, and reviewing status reports. Conversely, there are many lower-wage occupations such as home health aides, landscapers, and maintenance workers, where only a very small percentage of activities could be automated with technology available today...

It's all fun and games until white collar boondoggles start disappearing....

Posted by at November 7, 2015 6:40 AM

  

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