The global jobs market stands on the brink of a seismic shift. A 2023 report from the World Economic Forum reveals a disconcerting projection: by 2027, 60% of workers will require training to meet the evolving demands of their roles, yet only half of these workers currently have access to the necessary training opportunities. This predicament is further exacerbated by the looming spectre of computerisation. A prescient 2013 paper by Carl Benedikt Frey and Michael A. Osborne, titled “THE FUTURE OF EMPLOYMENT: HOW SUSCEPTIBLE ARE JOBS TO COMPUTERISATION?”, warned of the vulnerability of certain sectors. Their model predicted that most workers in transportation and logistics occupations, along with the majority of office and administrative support workers, and labour in production occupations, are at risk. As we navigate this new era in the jobs market, shaped by artificial intelligence, technology, and the gig economy, the question remains: are we adequately prepared for the future that awaits us?
| Key Takeaways |
|---|
| The advent of AI and the rise of the gig economy have created a seismic shift in the jobs market. |
| The global AI market size was valued at USD 454.12 billion in 2022 and is expected to reach USD 2,575.16 billion by 2032. |
| The World Economic Forum predicts that more than half of the global workforce will be part of the gig economy by 2025. |
| By 2030, AI will lead to an estimated $15.7 trillion, or 26% increase, in global GDP. |
| The Fourth Industrial Revolution is expected to transform more than 1 billion jobs – almost one-third of all jobs worldwide – in the next decade. |
In This Post
The Current State of the Jobs Market
The jobs market today is a complex tapestry, woven with threads of AI, technology, and the gig economy. These elements are not merely influencing the market; they are reshaping it. A chilling prediction from CNN underscores this transformation: “14 million jobs worldwide will vanish in the next five years as the economy weakens and companies boost adoption of technologies such as artificial intelligence.”
One might argue that the jobs market has always been influenced by technology. While this is true, the advent of AI and the rise of the gig economy have created a seismic shift unlike any other. This is not a mere influence; it is a revolution.
“First, I think it’s soft skills – probably the most difficult to learn, but probably the most decisive for the long term…And second, it’s learn, learn, learn. It means curiosity. People will have a range of skills that will be unique to each person tomorrow, because they will learn AI, but also cooking, and also soft skills. This cocktail of skills will make the difference over time.It’s not a package that you deliver. It will be a continuous process.”
Muriel Pénicaud, France’s Minister of Labour (Source: WEF)
The data underscores this transformation. The unemployment rate in the United States stands at 3.7%. However, when we delve deeper, the youth unemployment rate rises to 8.1%, and the unemployment rate of recent college graduates is 4.4%. These figures suggest a disconnect between the skills being taught and the skills demanded by the evolving jobs market.
In the face of these challenges, the question remains: how can we bridge this gap and prepare the workforce for the jobs of the future?
The Rise of AI and Technology
The evolution of AI and technology has been nothing short of meteoric. From rudimentary algorithms to sophisticated machine learning models, the journey has been marked by relentless innovation and disruption. This technological revolution is not without its implications. As Tesla boss Elon Musk ominously predicts, “AI will create a situation where no job is needed.”
In a recent global survey of job seekers conducted by LinkedIn, 37 percent of respondents said their current job does not fully utilize their skills or provide enough challenge.
Source: mckinsey
The numbers bear testament to this rapid ascent. The global artificial intelligence (AI) market size, encompassing hardware, software, services, and technologies like machine learning, deep learning, natural language processing, and machine vision, was valued at USD 454.12 billion in 2022. It is expected to reach a staggering USD 2,575.16 billion by 2032. Other estimates paint a similar picture of growth. Spherical Insights & Consulting pegs the figure at USD 2,760.3 billion by 2032, while Fortune Business Insights forecasts a market size of USD 2,025.12 billion by 2030. Marketsandmarkets and Grandview Research project figures of USD 1,345.2 billion by 2030 and USD 196.6 billion in 2023, respectively.
The impact of AI and technology on jobs is a topic of intense debate among industry experts. While some envision a future where machines complement human labour, others warn of a dystopian scenario where jobs become obsolete. As we navigate this brave new world, one thing is clear: the rise of AI and technology is a tide that cannot be stemmed. The challenge lies in harnessing its potential for the betterment of society.
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The Rise of AI and Technology
Artificial intelligence (AI) is not merely a buzzword; it is a game-changer. This technology has the potential to revolutionize industries and drive significant growth. The rise of AI and technology is not just about the evolution of machines, but also about the transformative power these technologies hold. By investing in AI stocks, one positions themselves to harness this transformative power and secure maximum profits.
The incredible growth potential of the AI industry is one of the main reasons to invest in AI stocks. AI is being integrated into various sectors, including healthcare, finance, transportation, and manufacturing. As these industries continue to adopt and embrace AI technologies, the demand for AI solutions is set to skyrocket. This will lead to increased revenues and profitability for AI companies, as evidenced by the global AI market size, which was valued at USD 454.12 billion in 2022 and is expected to reach USD 2,575.16 billion by 2032.
Moreover, investing in AI stocks allows one to be part of the innovation that is shaping the future. Supporting companies at the forefront of AI research and development contributes to the advancement of groundbreaking technologies. This not only benefits investors financially but also has the potential to change the world for the better.
According to CNBC, Tesla boss Elon Musk says, “AI will create a situation where no job is needed.” This statement underscores the profound impact AI and technology could have on the jobs market and beyond. As we navigate this brave new world, one thing is clear: the rise of AI and technology is a tide that cannot be stemmed. The challenge lies in harnessing its potential for the betterment of society.
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Understanding the Gig Economy
The gig economy, a burgeoning global trend of contracts, casual jobs, and gigs replacing traditional full-time employment, presents a unique set of challenges and opportunities, particularly in the context of AI and technology. As Jack Kelly noted on Forbes, “The future job market will be radically different—almost alien—to what we have now.”
“The mindset of continuous learning is really important as the number one skillset for our teachers learning how to teach and for our students learning how to learn. And that’s the mindset we’ve got to get into the curriculum today.”
Robert E. Moritz, Global Chairman of PwC (Source: WEF)
Some may dismiss the gig economy as a fleeting trend, but data suggests otherwise. Around 36% of US workers, approximately 57.3 million people, were part of the gig economy before the pandemic. By 2023, an estimated 73.3 million freelancers are expected to work in the USA, a figure projected to rise to 76.4 million by 2024. The World Bank estimates that there are between 154 million and 435 million online gig workers globally, representing 4.4% to 12.5% of the global workforce. The gig economy is projected to grow to $455.2 billion in 2023, and the World Economic Forum predicts that more than half of the global workforce will be part of the gig economy by 2025.
The gig economy is composed of digital platforms that connect freelancers with clients for short-term jobs, contracted work, or asset-sharing. Examples of gig workers include freelance writers, online tutors, digital marketing experts, web developers, and cybersecurity experts. According to a World Bank report, low- and middle-income countries account for 40% of traffic to gig platforms.
“People will create the jobs of the future, not simply train for them, and technology is already central. It will undoubtedly play a greater role in the years ahead.”
Jonathan Grudin, principal researcher at Microsoft (Source: pewresearch)
The gig economy has also provided a lifeline for many during the pandemic. As McKinsey reports, many people who were laid off during the pandemic—and some who weren’t—turned to freelancing, either because they needed new income sources or because they desired greater independence and flexibility. More recently, inflation may have driven lower-income workers to take on side gigs through these platforms.
However, the gig economy is not without its shortcomings. In a recent global survey of job seekers conducted by LinkedIn, 37 percent of respondents said their current job does not fully utilize their skills or provide enough challenge. Furthermore, almost 75 million youth are officially unemployed, and women represent one of the largest pools of untapped labor: globally, 655 million fewer women are economically active than men. In a “best-in-region” scenario in which all countries match the rate of improvement in gender gaps (in labor force participation, hours worked, and sector mix of employment) of the best-performing country in their region, $12 trillion more of annual GDP would be realized in 2025, equivalent in size to the current GDP of Japan, Germany, and the United Kingdom combined.
Educators have always found new ways of training the next generation of students for the jobs of the future, and this generation will be no different.
JUSTIN REICH Source: pewresearch
As we delve deeper into the gig economy, it becomes clear that while it offers immense potential, it also presents significant challenges that need to be addressed to ensure a fair and equitable future for all workers.
Case Studies: AI, Technology, and the Gig Economy in Action
The transformative power of AI and technology in the gig economy is best illustrated through real-world examples. One such example is the online grocery market, which reached $285 billion last year on the heels of COVID and continues to grow. Approximately 28% of Americans report using online grocery shopping. A key factor in this growth is the impact of ‘wayfinding’ technology on gig worker batch-picking performance and online platform revenue in the grocery retail environment. ‘Wayfinding’ is an AI-enabled solution designed to assist gig workers with in-store navigation.
“I imagine a world in which AI is going to make us work more productively, live longer, and have cleaner energy.”
Fei-Fei Li, Professor of Computer Science at Stanford University
AI also contributes significantly to efficiently allocating tasks and scheduling on gig platforms. AI-driven workload distribution can ensure the optimal assignment of tasks based on freelancers’ skills, availability, and other relevant factors. This level of efficiency contributes to a smooth-running automated economy and is a testament to the economic benefits of automation.
Performance tracking and feedback are other areas where AI has been transformative. Automated digital economy performance tracking can monitor the quality of work, and AI-generated feedback can help freelancers improve their skills and performance. This process not only ensures quality control but also promotes continuous learning and development among freelancers.
Uber, the ride-sharing giant, is a prime example of the gig economy in action. The company’s model exemplifies numerical flexibility – the capability to rapidly adjust workforce size or the number of hours worked in response to product demand. It also showcases functional flexibility – enabling firms to apply their workforce to different tasks on the fly, which requires a much more varied skillset. Financial flexibility – a firm’s ability to adjust their human resource costs in response to changes in the external price of labour – is another key aspect of Uber’s model.
Adam, CTO and co-founder of B12, has been the driving force behind the creation and development of B12’s open sourced Human-assisted A.I. engine, Orchestra. This is another testament to the transformative power of AI in the gig economy.
In McKinsey’s American Opportunity Survey on independent work, more than 1 out of 3 (36 percent) employed respondents identified themselves as independent workers. This share has grown sharply since 2016, when the McKinsey Global Institute estimated that 27 percent of the US workforce was independent. More than 70 percent rely on independent work as their primary source of income; the remainder take on side hustles, whether they are pursuing a passion or simply supplementing their paychecks. Independent workers score 114 on the McKinsey Economic Opportunity Index, a scale that gauges Americans’ perceptions of past, present, and future economic opportunity. That figure is significantly higher than employed respondents as a group (103) and higher than the national average (97), on a scale of 0 to 200. The most optimistic independent workers are those who do the work because they enjoy it or because of the autonomy and flexibility it offers. The least optimistic are those who do independent work for additional discretionary income.
These case studies provide tangible illustrations of the unique challenges and opportunities presented by the gig economy, particularly in relation to AI and technology. As we delve deeper into this new landscape, it becomes clear that while it offers immense potential, it also presents significant challenges that need to be addressed to ensure a fair and equitable future for all workers.
AI, Technology, and the Gig Economy: A Futuristic Perspective
As we cast our gaze towards the future, the interplay of AI, technology, and the gig economy promises to reshape the jobs market in profound ways. Saadia Zahidi, Managing Director of the World Economic Forum at Davos 2020, encapsulates this transformation succinctly: “The Fourth Industrial Revolution is expected to transform more than 1 billion jobs – almost one-third of all jobs worldwide – in the next decade.”
“Success in creating AI would be the biggest event in human history. Unfortunately, it might also be the last, unless we learn how to avoid the risks.”
Stephen Hawking, Theoretical Physicist
There are reasons to be both hopeful and concerned about this impending shift. On the one hand, advances in technology may displace certain types of work, but historically they have been a net creator of jobs. We will adapt to these changes by inventing entirely new types of work, and by taking advantage of uniquely human capabilities. Technology will free us from day-to-day drudgery, and allow us to define our relationship with “work” in a more positive and socially beneficial way. Ultimately, we as a society control our own destiny through the choices we make.
On the other hand, the impacts from automation have thus far impacted mostly blue-collar employment; the coming wave of innovation threatens to upend white-collar work as well. Certain highly-skilled workers will succeed wildly in this new environment—but far more may be displaced into lower paying service industry jobs at best, or permanent unemployment at worst. Our educational system is not adequately preparing us for work of the future, and our political and economic institutions are poorly equipped to handle these hard choices.
By 2030, AI will lead to an estimated $15.7 trillion, or 26% increase, in global GDP, based on PwC’s Global Artificial Intelligence Study. Increased productivity will contribute to approximately 40% of this increase while consumption will drive 60% of GDP growth. While AI will automate some jobs, a PwC AI study has found that “any job losses from automation are likely to be broadly offset in the long run by new jobs created as a result of the larger and wealthier economy made possible by these new technologies.”
In its “Future of Jobs Report 2020,” the World Economic Forum estimates that 85 million jobs will be displaced while 97 million new jobs will be created across 26 countries by 2025. In the next few years, 3% of jobs will be potentially automated by AI, according to PwC’s report “Will robots really steal our jobs?” Increased digitization resulting from COVID-19 may accelerate this trend. By the mid-2030s, as AI advances and becomes more autonomous, 30% of jobs and 44% of workers with low levels of education will be at risk of automation.
“What all of us have to do is to make sure we are using AI in a way that is for the benefit of humanity, not to the detriment of humanity.”
Tim Cook, CEO of Apple
By 2030, activities that account for up to 30 percent of hours currently worked across the US economy could be automated—a trend accelerated by generative AI. However, we see generative AI enhancing the way STEM, creative, and business and legal professionals work rather than eliminating a significant number of jobs outright. An additional 12 million occupational transitions may be needed by 2030. As people leave shrinking occupations, the economy could reweight toward higher-wage jobs. Workers in lower-wage jobs are up to 14 times more likely to need to change occupations than those in highest-wage positions, and most will need additional skills to do so successfully. Women are 1.5 times more likely to need to move into new occupations than men. The largest future job gains are expected to be in healthcare, an industry that already has an imbalance, with 1.9 million unfilled openings as of April 2023. We estimate that there could be demand for 3.5 million more jobs for health aides, health technicians, and wellness workers, plus an additional two million healthcare professionals. By 2030, we further estimate a 23 percent increase in the demand for STEM jobs.
As we navigate this brave new world, it becomes clear that while AI, technology, and the gig economy offer immense potential, they also present significant challenges that need to be addressed to ensure a fair and equitable future for all workers.
Future Implications
As we stand on the precipice of a new era in the jobs market, it is crucial to consider the potential implications and predictions for the future. Saadia Zahidi, Managing Director of the World Economic Forum, offers a balanced perspective: “We’re not necessarily looking at a negative future in terms of jobs, but what we are looking at is a major shift in terms of the set of skills within each job and the types of jobs that will exist in the future – whether that is in the care economy or the education sector or the IT sector, there are a number of growing roles.”
The challenges and opportunities presented by this shift are manifold. On one hand, the rise of AI, technology, and the gig economy could lead to job displacement and require workers to acquire new skills. On the other hand, these same forces could also create new jobs, drive economic growth, and offer greater flexibility and autonomy to workers.
Ethical considerations also come into play. As AI and technology become more pervasive, issues related to privacy, data security, and the digital divide will need to be addressed. Moreover, ensuring fair wages and working conditions for gig workers will be paramount.
For those looking to adapt to this changing jobs market, the advice is clear: value skills, not just degrees. New education models and pathways will be needed to equip people with the skills required for the jobs of the future. As Ginni Rometty, Chairman, President and CEO of IBM Corporation, succinctly puts it, “You have to value skills and not just degrees. You have to have new education models and new pathways to get people retrained and back into the workforce.”
As we navigate this brave new world, it becomes clear that while AI, technology, and the gig economy offer immense potential, they also present significant challenges that need to be addressed to ensure a fair and equitable future for all workers.