The possibilities of technologies (including machine learning, artificial intelligence, drones and others) have been accelerating exponentially in recent years. The automation imperative will grow as a survival response through a challenging economic period, further driven by the exposure on dependency on legacy systems being highlighted. Post-coronavirus, this move towards automation will accelerate further.
With digital transformation at the top of business agendas and challenging economic conditions, companies will need to adopt a position regarding their workforce and other stakeholders. There will be a differentiation in approaches – some organisations will move to create an extremely lean workforce through digitisation, while others will aim to minimise impact on employees. Companies who prioritise employee needs over shareholder needs could become talent destinations.
Various gig arrangements have existed across industries and professions for a long time. But with less permanent positions available due to automation, this will grow. Supply will come from organisations needing to add new skillsets and capacity while retaining flexibility to combat volatile conditions. Demand will come from individuals who increasingly need new sources of income. This matching of supply and demand via gig arrangements will help the economy recover faster than expected.
Increased digitisation and automation of repeatable tasks will shift the skills needed by organisations. The rapid and simultaneous nature of digital transformation means that large portions of the workforce (especially low-skilled workers) will need to be re-trained. The longer we wait to undertake this large reskilling need, the bigger the issue will become.
Society’s financial security is engineered around a workforce that is employed in permanent positions for most of their working life. A faster than expected shift towards automation, coupled with more gig work will require re-designing the long-standing systems of credit access, the welfare system and retirement programs.
With jobs and careers becoming increasingly transient, more people will be left balancing multiple part-time jobs or a string of short-term roles. Less job security and greater gig work (which is particularly susceptible to economic shocks) will shift household priorities toward more conservative saving and spending patterns. This constrained consumer spending could lead to lower economic growth, self-perpetuating the problem.
The unprecedented scale of re-training needed will require leadership, collaboration and new funding structures.
The UBI concept is not new, in recent times it has been touted as a way to help workforces buffer against the impacts of mass automation. The concept’s consideration and adoption has been expedited by the size of the coronavirus crisis, with Spain planning to introduce UBI. In Australia, we have an aging population that is living longer, has had superannuation impacted by capital market shocks, and are facing high unemployment. On top of that, any increases in automation disproportionately impacts older and low-skilled workers.
Our nation’s nurses and teachers have been put in the spotlight for their contribution in this crisis (and firefighters recently before this).
These themes were selected by comparing emerging trends before and during the COVID-19 pandemic. Within each theme, we engaged KPMG professionals to develop hypotheses on what a post-COVID-19 world might look like.