In early 2019, leaders of business and government will be meeting at the World Economic Forum’s Annual Meeting in Davos to address the challenges presented by technology and changing workforce dynamics. Many governments see the future of industry - Industry 4.0 - as involving a generational change in skills and needing a new vision of the security that comes with full-time employment. For the corporate sector, leadership will need to balance the promise of automation and advanced data with the financial health of the workforce. It’s a challenging future. But it’s not a dark one, by any means.
The Industry 4.0 that Davos attendees will address is, at its core, an issue of workforce transformation, not workforce displacement. It is defined by the intersection of longer lifetimes, new technology, evolving employment models and financial dynamics. Governments and the private sector must proactively manage, not blindly accept, these dynamics. Industry 4.0 demands a vision that includes financial health, workforce security and new opportunities for workers of all demographic segments and skill levels.
“Opportunities” is the keyword here. The focus should be on scenarios that create, not destroy, them. The following three situations are based on our research at Mercer and on conversations I’ve had with high-profile thought leaders. There will undoubtedly be change. But future outcomes will be influenced by the elements that companies can control, and the discussions that revolve around such elements are likely to be the most productive at Davos.
Scenario one: automation as optimizer
Ideally, robotics, artificial intelligence, machine learning, and conversational and service automation will serve two purposes: to expand the enterprise and serve the workforce. If companies use automation and advanced data for these ends, Industry 4.0 will optimize the future of work.
This scenario is supported by Parag Khanna, global futurist and author of The Future Is Asian. In Khanna’s vision, automation must meet the following four standards to be effectively integrated:
1. Improve rather than replace employment conditions and opportunities
2. Improve how a company goes to market
3. Add value for customers
4. Enhance data capabilities without violating privacy
“Automation and AI in particular should benefit companies, their customers and their workforce”, Khanna tells me.
“Look at what Tim Cook [CEO of Apple] and Marc Benioff [co-CEO of Salesforce] are saying. They’re talking about the need for technology and data to be respectful of their customers, not control them. It’s a difference in the conversation, and one I think you’ll hear about at Davos.”
Scenario two: cooperation replaces automation as a priority for Industry 4.0
In this scenario, the workforce has a voice. It is not drowned by technology or a lack of opportunity; it is integral to new versions of both. In fact, expect the participants shaping the thinking around the future of work to have a unique voice in Davos.
This scenario encourages organizations to engage the workforce, not alienate it. It envisions building on best practices from the technology companies actually producing some of the tools that could disrupt the workforce. It engages labour organizations and governments to develop new workforce strategies together.
Take Cisco, for example. It recently engaged its workforce in a 24-hour “breakathon” intended to break down and rebuild its HR programme. More than 800 employees - 65% from HR and the rest from services and engineering - took part in the event, with offices around the globe participating in a “follow-the-sun” manner. Employees were split into small teams to identify problems they had experienced while doing their job and to pitch ideas for solutions. The result: several solutions across talent acquisition, onboarding, development and leadership. One idea resulted in the creation of YouBelong@Cisco, a mobile app that guides new employees and their managers during their initial weeks of work.
“I would urge the gathering at Davos to get out in front of the workforce issues. When technology is integrated into a business, it’s often too late to retrain workers”, says Thomas Kochan, Professor of Work and Organization Studies and Co-Director of the MIT Sloan Institute for Work and Employment Research.
“We need to figure out what we need to do to create a new social contract with workers. What do we need from labour? From technology? From government? It will take working together to make it happen.”
Scenario three: digital transformation leads workforce transformation
Industry 4.0 is not limited to the G20. Emerging markets are becoming a lens through which the future of work can be viewed. In Indonesia, digital technology and shared mobility have led to the rise of the biggest company in the country’s history, Go-Jek. In Kenya, 48% of the country’s GDP is processed via mobile phones, creating an industry around mobile payments company M-Pesa. In India, Bosch Consulting is among the international companies building digital cultures and creating digital immersion programmes to facilitate understanding about digital transformation. More work needs to be done in emerging markets.
“We need to change the way in which we are moving from an old ‘digital divide’ model of inequality of access to a new model, whereby use of digital is creating new opportunities”, says Richard Heeks, Director of the Centre for Development Informatics and Senior Research Fellow at the Sustainable Consumption Institute, University of Manchester.
“We need to understand and take action on that. The second, and related, theme would be decent digital work - the need to defend and advance basic employment standards in the digital economy. Otherwise inequalities are going to grow further and tear apart the already fragile social fabric.”
In some respects, Davos attendees will try to create order out of the unknown. We are still trying to prepare companies and their employees for change. Can automation and humans coexist profitably and positively? The World Economic Forum is the best platform to create answers and generate ideas.
Looking at the possibilities of Industry 4.0 through the lens of complex games is one way to conceive of an optimistic future. When IBM’s Watson AI programme beat world chess champion Garry Kasparov, the world was shocked. Now humans don’t even play AI at chess anymore. The algorithms have outpaced the human brain. AI platforms play each other in the Computer Chess Championship, and humans play only each other in the World Chess Championship. Automation has its place, and so do humans. A similar scenario has played out for Go, which is more complicated and was supposed to be too tough for AI. Today, AI beats human Go players.
Humans have hardly been shut out of Chess or Go. They have found a new way to play. This could be analogous to the future of work in Industry 4.0. Automation will find its own level of expertise. That level might exceed human ability in many cases, but human ability need not be devalued. There’s a strong argument that human skill sets will become even more important in Industry 4.0.