Today there is a growing concern about whether there will be enough jobs for workers, given potential automation. History would suggest that such fears may be unfounded: over time, labor markets adjust to changes in demand for workers from technological disruptions, although at times with depressed real wages
although at times with depressed real wages (Exhibit 2).
Exhibit 2
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We address this question about the future of work through two different sets of analyses: one based on modeling of a limited number of catalysts of new labor demand and automation described earlier, and one using a macroeconomic model of the economy that incorporates the dynamic interactions among variables.
If history is any guide, we could also expect that 8 to 9 percent of 2030 labor demand will be in new types of occupations that have not existed before.
Both analyses lead us to conclude that, with sufficient economic growth, innovation, and investment, there can be enough new job creation to offset the impact of automation, although in some advanced economies additional investments will be needed as per our step-up scenario to reduce the risk of job shortages.
A larger challenge will be ensuring that workers have the skills and support needed to transition to new jobs. Countries that fail to manage this transition could see rising unemployment and depressed wages.
The magnitude of future job creation from the trends described previously and the impact of automation on the workforce vary significantly by country, depending on four factors.
Wage level
Higher wages make the business case for automation adoption stronger. However, low-wage countries may be affected as well, if companies adopt automation to boost quality, achieve tighter production control, move production closer to end consumers in high-wage countries, or other benefits beyond reducing labor costs.
Demand growth
Economic growth is essential for job creation; economies that are stagnant or growing slowly create few if any net new jobs. Countries with stronger economic and productivity growth and innovation will therefore be expected to experience more new labor demand.
Demographics
Countries with a rapidly growing workforce, such as India, may enjoy a “demographic dividend” that boosts GDP growth—if young people are employed. Countries with a shrinking workforce, such as Japan, can expect lower future GDP growth, derived only from productivity growth.
