The future of work oct 2018

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TheFutureofWorkInsightsandImplications
THE FUTURE OF WORK
Insights and Implications

Text © Future Agenda 2018
Images © istockimages.com
Graphs © Future Agenda
First published September 2018 by:
Future Agenda Limited
84 Brook Street
London
W1K 5EH
www.futureagenda.org

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The Future of Work
Insights and Implications
Dr Tim Jones
Caroline Dewing

4
The future of work is increasingly uncertain. What is clear is that
we are in the midst of a major transformation driven by multiple
drivers of change. How individuals, companies, cities and
governments respond to the upcoming shifts will be pivotal
for future economic and social wellbeing, but this is far from
straightforward. Some major decisions lie ahead.

5
Context
How and where we will work in the future is a major
focus for multiple organisations. Whether you talk to
the WEF,1
ILO,2
DWP,3
EAER,4
the RSA5
or multiple
consultancies,6,7,8,9
there are many different views
exploring how and why the nature of work is in
flux. The reality of changing demographics and the
escalating impact of new technologies across many
sectors are fundamentally challenging the status quo
and, as such, there is widespread concern about
what the outcomes will be. Indeed, it is difficult to
avoid the furore around future threats and potential
political interventions about job protection and
creation. There is much uncertainty.
Future Agenda believes that the best way of making
sense of the risks and opportunities ahead is to
take a global view and consult with leaders around
the world and share and debate their varied ideas.
This is why we run the world’s largest open foresight
programme which engages with experts from across
all continents in order to explore emerging change
via openly shared global dialogue. Our objective is
to bring together multiple different perspectives and
make more sense of the future – one that balances
alternative views and provides an impartial, credible
and reliable synthesis of how changes around the
world may play out - and what are some of the key
implications. Within this we have looked in detail
at the future of work as well as at other important
and related topics such as the future of ageing,
education, immigration, trade, data, transport and
health - all of which are experiencing significant shifts
that will impact how and why we work.
Ahead of a series of further discussions starting in
London, in this article we explore three key drivers
of change as leaders around the world view it –
shifting demographics, technology innovation and
the organisational response. In addition, we have
highlighted several related areas where new policy
decisions need to be made.

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As the world’s population continues to grow and
consume more, many increasingly recognise the
need for additional jobs to be created on a global
scale. If average standard of living is going to stay
the same as today, or ideally improve for more
people, then there needs to be greater economic
activity in many key locations. A common number
shared in recent years by the UN is that over the
next decade we should aim to create 600m new
jobs – so 45 million a year.10
This will be a significant
challenge, as many of these are needed in areas
of major population growth across Africa and Asia.
With the young making up around half the total of
over 190m looking for but unable to find work today,
plus more than 800m people currently unable to
get over the poverty threshold, the requirement for
more and better jobs is well documented.11
In the
countries experiencing an ‘urban youth bulge’ rising
unemployment for the young is already a major
challenge.12
Even in several southern European
countries, many graduates already need to wait a
decade before finding meaningful work.
At the same time, North Americans, most
Europeans and the populations of several notable
Asian countries such as Japan, Korea, Singapore
and China are battling a different issue – that of
a naturally declining workforce and steadily rising
dependency ratios. Here increasingly ageing
populations, low fertility rates and a snowballing
focus on immigration are all playing an important
role in reshaping society. By 2030, older people will
outnumber children for the first time in US history,13
while across several European nations, those over
65 will account for around 25% of the population.14
The average EU old age dependency ratio will
have risen from today’s 30% to 40% and by 2050
will have passed 50%.15
Put another way, twenty
years ago, there were about five workers for each
pensioner. Ten years later, the ratio was 4:1 and
today it is close to 3:1. In 2050 it will be 2:1.
Managing this is a huge challenge for policy
development. Balancing an increasingly wide
range of conflicting forces that impact on the
availability, quality and length of jobs is putting
mounting pressure on how we see and prepare
for work across our lengthening lifespans. Some in
our discussions suggested that we should expect
to work less but work longer – arguing that, if 30
years ago in Europe we were all aiming for up to 5
days a week over the adult lifetime, today we are
on average targeting around 4 days and, in the
future, this will drop to 3. Others observed that this
is all very well but “a major potential barrier is that
employers remain ambivalent about older workers.”
This despite the fact that there are countries, such
as Canada and South Korea where “workforces are
becoming older and more age diversified than ever
in history.”
Demographics – The Big Picture

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Old-age dependency ratio
0% 10% 20% 30% 40% 50% 60%
Low income countries
Middle income countries
High income countires
World
Old-age dependency ratio
2020 2030 2040 2050
Looking back a few decades, the majority of people
in rich countries were expected to work for 30 to
40 years and then retire for 10. This was the basis
around which most pensions were designed. The
model is now being challenged as we may have
to work for up to 50 years and support at least
25 years of retirement. As was highlighted in a
discussion at Stanford “for many, retirement at age
65 is economically infeasible. The reality is that few
workers can fund a 30-year retirement with a 40-
year career. Neither can societies.” An inevitable
consequence of this is that retirement ages
may well have to rise. Indeed, several European
countries are now joining others such as Australia
in contemplating increasing the standard pension
age to 70.16
Given this, many now recognize that
the challenge of supporting an increasingly older
workforce demands not only the rethinking of life-
long learning but also the broader acceptance of the
additional cost of part-time flexible jobs.
If that was not enough, at the other end of the
working life we can also see a generational attitudinal
shift underway. At the same time as the demand and
supply of jobs is fluctuating, the expectations of the
new workers are changing - particularly amongst
the educated elite. More informed, knowledgeable
millennials are increasingly seeking more purposeful
work. Some organisations now recognise the
“importance of connecting candidates with a cause”
but delivering on this will be difficult for most.17
This all clearly has major implications and raises
some difficult questions:
• How can new jobs be created on a significant
scale?
• Should we expect full or part-time work?
• What will be the future retirement age?
• Can pensions be better structured?
• What is the nature of employment and
unemployment?
• If we can’t create sufficient jobs should we
incentivise people to work less or not at all? and
• How should we, as society, value, incentivise and
support work?
Unemployment rates (2018)
Japan 2.4%
China 3.9%
US 3.9%
Russia 6.0%
EU Average 6.8%
India 7.1%
Brazil 13.1%
South Africa 27.2%
Kenya 42.0%

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With faster technology change and the 4th Industrial
Revolution building traction, many anticipate an
impact on jobs - creating new ones but rendering
others redundant. Capturing the opportunities
associated with the broad range of emerging
technologies could be a significant driver of GDP
growth in many economies over the next decade.
However, a large part of this growth may arise
from the replacement of labour by automation: The
activities that are most susceptible to this include the
predictable physical tasks as well as the cognitive
tasks built upon collection and processing of data.
The pivotal question is whether the changes ahead
will drive mass unemployment or will the shifts that
led to the likes of blacksmiths being replaced by
car mechanics repeat themselves? Several suggest
that technology will have a fundamental impact on
roles that are currently considered part of our social
fabric – doctors, lawyers, teachers and accountants
for example. Some of the earliest jobs at risk include
underwriters, telemarketers and translators.18
The
Economist, for one has even explored the benefits of
automating politicians.19
Others see more opportunity,
pointing out that the jobs that are displaced will
be offset by gains due to digital automation and AI
technologies. These include those created as a result
of rising expenditure on IT hardware and software,
jobs supporting a growth in global consumer
spending and those associated with the increasing
demand for healthcare. We should also highlight the
potential benefit of entirely new jobs that may be hard
to imagine today. All in all, the WEF reckons that in
just the next four years there will be a net gain of 58m
jobs with around 133m new jobs being created and
75m disappearing.20
In addition to the creation of new skilled jobs,
particularly in digital sectors, it may well be that
greater efficiencies will lead to higher production,
lower prices and thus more demand for the tasks
that the machines cannot perform. During the first
Industrial Revolution the number of weavers rose as
the work became more automated simply because
the improved efficiencies generated by machines led
to reduced prices and opened up new opportunities.
The job of a weaver changed but the number of
weavers increased. This could be replicated in a
number of existing occupations including doctors
and teachers. That said, this does not follow in all
professions; those presently employed as taxi drivers
or factory workers may not necessarily find the
transition to something requiring completely different
skills an easy mid-life journey.
Technology - Promise and Threat

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Careful policy planning is necessary and the WEF
2018 Future of Jobs Report is cautious about the
impact that new technology may have, pointing out
that “these transformations, if managed wisely, could
lead to a new age of good work, good jobs and
improved quality of life for all, but if managed poorly,
pose the risk of widening skills gaps, greater inequality,
and broader polarization.”
One of the most important questions to ask is
which sectors are most vulnerable to technology
change and which will gain most. Although factory
workers, supermarket checkout assistants and truck
drivers may bear the brunt of the initial disruption,
given how widely applicable automation seems
to be, it’s certainly the case that many traditionally
“safe” white-collar roles, including engineers and
accountants, doctors and lawyers, may well also
experience fundamental change. AI in particular has
a fast-developing capability to support or replace
cognitive tasks just as much as physical ones.
Some even suggest that we will no longer need as
many teachers, certainly not in their current guise.
In a discussion in Mumbai the idea of teacher-less
classrooms was seen to be just as credible as
driverless cars.
There is clearly lots of hype around the varied
technologies that are gaining major investment. While
advocates of such innovations as AI and self-driving
cars are primarily focused on the positive benefits,
others see a different future and the many alternative
voices are all now muddying the picture. The jobs of
around 75% of accountants, bankers and lawyers
may well be vulnerable, so fundamental here is the
need to be clear on whether we are talking about AI
as artificial, assisted or augmented intelligence and,
by implication, how it will replace or support us.

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Healthcare AI and Robots
The healthcare industry employs millions of people
but also has many new development programmes
which are focused on improving efficiency and
outcomes. As such it provides a good example
of how technology might be deployed alongside
workers. Robots are already performing surgery;
AI advisors are supporting GPs; while pattern
recognition technology is out-performing radiologists
in the analysis of patient data. Change is guaranteed
as governments and private healthcare providers
around the world wrestle with need to reduce
costs and improve efficiencies. In Switzerland, for
example, there are currently 50% more doctors per
capita than in the UK. Will this ratio be maintained?
It will be interesting to see how the roll-out of new
technologies will develop across different systems.
As machines improve to do what we can do but
more efficiently, at less cost and with fewer chances
of error, then they will become increasingly attractive
options for hospitals. Information-rich, repetitive
jobs in areas such as pharmacy may well be
initially supported by the first phase of AI (machine
learning) but then replaced by the second phase
(deep learning). Deloitte, for one, suggests that “if
automation in the industrial era was the replication
of tasks previously isolated and defined for humans,
then in the post-industrial era, automation might
be the replication of isolated and well-defined
behaviours that were previously unique to
humans.”21
Should we therefore rethink the concept
of work that not only makes humans essential,
but allows them to take fuller advantage of their
uniquely human abilities? So the role of a radiologist,
for example, will not completely disappear – few
envisage a time when a patient would prefer to
have a complex, sensitive diagnosis delivered by a
machine – but it does mean that it will change.
In the same way there is also more automation
coming to the increasingly digital operating theatre.
This is even having an impact on the role of a
surgeon. Experts we talked to in Frankfurt believe
that, although for the foreseeable future at least,
“surgeons will still be in the mix, but they will act
more as supervisors than active participants -
ready to step in if needed.” Effectively their role
will become similar to today’s airline pilots with
machines undertaking the majority of the technical
tasks, but skilled humans being on hand to manage
unexpected turbulence and emergencies.
That said, greater efficiency and accuracy are
unlikely to replace the human touch. The very real
need for hands-on healthcare professionals such
as nurses, surgical support teams and carers who
can interact with patients, will remain – and may well
rise. Just as replacing a highly dextrous job such as
that of a hairdresser with a robot is extremely tricky,
so too is the case for those roles where empathy
and understanding is critical. Few believe that this
can be addressed though machines alone.

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Autonomous Vehicles
Another popular area of debate on where
technology might have impact is that of autonomous
or self-driving vehicles. Ultimately, many supporters
envisage a world where fleets of trucks, taxis,
ships and even planes all drive themselves and
there are no accidents. Here pretty well everything
moves smoothly, efficiently and securely. People
and goods arrive when and where they need to be
while making efficient use of available resources.
The consequence of this is fewer drivers, sailors
and pilots, but advocates see that this will be
compensated for by the creation of thousands of
higher-value new jobs in tech development and the
manufacturing of all these vehicles. While some jobs
disappear, others new ones are again created.
It’s a good thought. However, while the changes
ahead may drive innovation and deliver a GDP
balance in terms of value, it may not equate to
more jobs. Taking the UK for example, there are
potentially up to 1m driving jobs ‘at risk’. We have
over 300,000 taxi drivers; 300,000 truck drivers;
over 150,000 delivery drivers; and around 120,000
who work for the likes of Uber and Deliveroo plus
thousands more cycle couriers. Few of these jobs
will be replaced in the next 5 to 10 years, but further
out some see between 30% and 50% could go
as autonomous cars, urban robots and delivery
vehicles are all widely deployed. What will happen
to these workers who may not find it easy retrain?
Moreover, at a national level, it is unlikely that up to
half a million jobs are going to be replaced by an
equal number of scientists, engineers and coders.
So, some are questioning whether as a society we
should indeed support the move to widespread full
(level 5) autonomy for vehicles - especially as many
of the important safety benefits can be achieved
with less automation and so without impacting so
many jobs.
In healthcare, transport and other strategic sectors
new technology will progressively have the capability
to replace humans, but will we want to let it? After
all many believe that quality of work makes a huge
contribution to quality of life. As some sectors and
countries gain from new technology, others will
correspondingly lose out and fall behind. A response
to this will drive both the call for more reskilling and
upskilling as well as an inevitable surge in migration.

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As more companies look ahead to future resource
and skill needs, some are starting to rethink how
they operate as organisations. For many there are
three core future shifts to accommodate:
1. A change in the tasks undertaken by humans in
some specific fields
2. More freelancers or independent contractors,
especially in the service sector
3. The need to upskill and reskill ‘employees’ two or
three times during their work life
Research in Finland sees a future where work may
move from being stable to being more episodic
and relationships become multiple.22
While
manufacturing may remain an industry with long-
term employer / employee relationships, in many
other sectors, especially those in the knowledge
economy, the whole purpose and structure of
what a company is may change. As the potential
employment pool expands to include both ‘on and
off-balance sheet talent’ the workforce, workplace
and the nature of work is all in flux.23
Looking back
a decade, the world’s ten most valuable companies
employed a total of over 3.5 million. Today, the
top ten companies are worth twice as much, but
only have 50% of the number of total full-time
employees.
Many now see the future organisation as
increasingly flexible, permeable, flat and virtual.24
This means that companies shift from being
employers and may become the bodies that
create or coordinate projects that an increasingly
flexible and freelance population come together
to deliver. Think of many software developers or
the movie industry which has worked in this way
for decades: Other than a few people who work
for the movie studios, pretty much everyone else
is freelance – the director, actors, camera crews,
runners, special effects, costumer design, pre-
production etc – they come together as a team of
1000 or so for 6 to 9 months and then all move
on to their next projects. Maybe, this is how many
other sectors will operate in the future? The majority
of us will certainly be independent ‘free agents’
available for work as projects require it. Last year
15% of working Britons, 25% of the Swiss and 36%
of the US workforce were freelancers operating
across the gig economy. In each country, many
expect this will rise to over half of workers within
the decade.25
Deloitte research supports this trend
and further highlights a future where more people
are mobile and so not bound by location.26
We may
see more educated individuals who are ‘sometimes
nomads’ moving to the countries and cities where
their next project prospects are best27
Gen Z in
particular are increasingly willing to move for better
opportunities.28
Organisations’ Response
Top 10 Companies Value and Employees 2008 vs 2018
Total Value
($tn)
Total
Employees (m)
Top 10 Companies Globally [can do this as row of people and row of mon
2018
2008
2.60
3.51
5.98
2018
1.73

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The challenge here is then increasingly three-fold:
1. How does the talent adapt and keep itself up to
date and so attractive to the project?
2. How does the organisation with the key projects
to deliver attract the top talent?
3. How do cities and countries better attract both
the top talent and the pivotal companies?
Back in the late ‘90s, Swedish academics Jonas
Ridderstråle and Kjell Nordström authored a notable
book titled ‘Funky Business’ in which they focused
on a world where, with increasing access to better
education and information for all, many of us may
become more equally qualified but there would be
a few elite “people worth employing” and a select
range of exclusive “organisations worth working
for.”29
Perhaps, going forward, we will actually be
more focused on the “talent worth accessing” and
“projects worth working on?” KPMG propose that
“in developing a talent strategy that draws upon
the value of a full-time employee and high-end
independent professionals from the gig workforce,
companies can not only adapt to this future of
work model, but also use it as a competitive
differentiator.”30
Others consider that this could be
progressively tricky to pull off.
As increasingly selective new graduates seek
different types of organisations to work for, or with,
having the right combination of projects, talent
magnets and core purpose will be vital so that any
one company can stand out from an increasingly
homogeneous average.
Whatever and however changes play out, there
is a growing consensus that the whole notion of
an organisation has to change: Many established
activities are increasingly being outsourced –
operations, finance and legal. At the same time,
strategy, innovation and brand are increasingly core
while HR is more about talent attraction rather than
skill development. These are significant changes
and indicate that the future of the company is as
much in flux as the future of work itself.

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Numerous governments and their advisors are
clearly preparing for a change in the nature and
contribution of work. While some of the key shifts
ahead are having short-term impact, others may
have a longer gestation. However, given the varied
demographic, technology and organisational
developments underway, there are a number of
emerging issues for government and regulators
to consider – some of which are already being
debated. These include:
1. Society’s view of the purpose and contribution of
work and whether the future jobs available should
be proactively spread more evenly across the
population and country;
2. Supporting the increasingly freelance, gig
economy not just in terms workers’ rights but also
in areas such as taxation, credit ratings, loan
terms and insurance cover; 31
3. Financing meaningful upskilling and reskilling so
that every individual has the opportunity to fully
retrain, and not just be educated once;
4. Having more open and honest dialogue on
the role of internal and international migration in
supporting and balancing the talent mix;
5. Rethinking pensions to accommodate people not
only living longer but also working longer, and
most likely part-time;
6. As suggested by Bill Gates and others,32
introducing a tax on robots, data and AI and the
companies that gain most from their use – this,
incidentally, will require more clarity on the value of
data;33
and
7. Building on combining current EU and
California proposals,34
,35
diverting revenues from
recommended digital taxes to support a wider
and better universal basic income.
One thing is clear, the companies and governments
that proactively engage in mapping and planning for
the challenges and opportunities around the future
of work are likely to benefit from its transformation.
The question is which will lead, and which others
will follow.
Some Policy Questions

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References
1
https://www.weforum.org/projects/future-of-work
2
https://www.ilo.org/global/topics/future-of-work/lang--en/index.htm
3
https://www.gov.uk/government/publications/improving-lives-the-future-of-work-health-and-disability
4
https://www.wbf.admin.ch/wbf/en/home/themen.html
5
https://www.thersa.org/action-and-research/rsa-projects/economy-enterprise-manufacturing-folder/the-future-of-work
6
https://advisory.kpmg.us/articles/2018/future-of-work.html
7
https://www.pwc.com/gx/en/services/people-organisation/publications/workforce-of-the-future.html
8
https://www2.deloitte.com/insights/us/en/focus/technology-and-the-future-of-work.html
9
https://www.accenture.com/gb-en/future-workforce
10
http://www.un.org/en/development/desa/news/ecosoc/600_million_jobs.html
11
https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_615590/lang--en/index.htm
12
https://www.futureagenda.org/insight/rising-youth-unemployment
13
https://www.census.gov/newsroom/press-releases/2018/cb18-41-population-projections.html
14
https://www.mckinsey.com/~/media/mckinsey/featured%20insights/europe/the%20future%20of%20work%20
switzerlands%20digital%20opportunity/the-future-of-work-switzerlands-digital-opportunity.ashx
15
https://ec.europa.eu/eurostat/statistics-explained/index.php?title=File:Age_dependency_ratios,_EU-28,_2016-2080_
(%25)_PITEU17.png
16
https://www.theguardian.com/australia-news/2018/may/04/pension-age-hike-will-force-thousands-of-elderly-australians-
on-to-newstart
17
https://advisory.kpmg.us/content/dam/advisory/en/pdfs/purpose-driven-work.pdf
18
https://www.telegraph.co.uk/news/2017/09/27/jobs-risk-automation-according-oxford-university-one/
19
https://www.economist.com/open-future/2018/07/31/is-it-time-to-automate-politicians
20
http://www3.weforum.org/docs/WEF_Future_of_Jobs_2018.pdf
21
https://www2.deloitte.com/insights/us/en/deloitte-review/issue-21/artificial-intelligence-and-the-future-of-work.html
22
https://www.demoshelsinki.fi/wp-content/uploads/2017/02/work2040-scenarios.pdf
23
https://www2.deloitte.com/insights/us/en/focus/technology-and-the-future-of-work.html?icid=left_technology-and-the-
future-of-work
24
https://www.futureagenda.org/insight/organisation-3-0
25
https://www.forbes.com/sites/elainepofeldt/2017/10/17/are-we-ready-for-a-workforce-that-is-50-
freelance/#a473a043f82b
26
https://www2.deloitte.com/ch/en/pages/consumer-business/articles/workplace-of-the-future.html
27
https://www.futureagenda.org/insight/sometimes-nomads
28
https://www.accenture.com/gb-en/insight-gen-z-rising
29
https://www.amazon.co.uk/Funky-business-Kjell-Nordstrom/dp/2842110854/
30
https://advisory.kpmg.us/content/dam/advisory/en/pdfs/gig-economy-future-of-work.pdf
31
https://www.forbes.com/sites/trevorclawson/2018/07/31/stepping-onto-the-platform-is-the-gig-economy-making-us-all-
entrepreneurs/#63735a835071
32
https://www.ft.com/content/d04a89c2-f6c8-11e6-9516-2d969e0d3b65
33
https://www.futureagenda.org/news/future-value-of-data-interim-summary1
34
https://ec.europa.eu/taxation_customs/business/company-tax/fair-taxation-digital-economy_en
35
https://www.reuters.com/article/us-california-income/california-city-fights-poverty-with-guaranteed-income-
idUSKCN1J015D

18
Contact details
To discuss this project further please get in touch
Dr Tim Jones
Programme Director
Future Agenda
tim.jones@futureagenda.org
www.futureagenda.org
+44 780 1755 054
@futureagenda

The future of work oct 2018

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