3 key themes that will drive cities' strategies for job creation

The labor market looks different than it did 20 years ago and the next wave of technology could accelerate the rate of change in the coming decades, according to a report from the McKinsey Global Institute.

"The future of work in America," which examined 315 cities and more than 3,000 counties, indicates that automation is changing humans' jobs and the skills needed to perform them.

The report found that in the decade since the Great Recession, 25 "megacities" and their surrounding areas — 96 million people, or 30% of the US population — generated two-thirds of America's job growth. Those same 25 cities could capture 60% of of the nation's job growth through 2030.

The study suggests that the biggest change with automation will not be machines completely replacing people, but rather altering the type of work they do. The time people save by using machines for some tasks, often routine or repetitive tasks, can be put toward different, higher-value activities. In this way, machines will make human labor more productive, not obsolete.

"All Americans will need to cultivate new skills to remain relevant in a more digital and knowledge-intensive economy," the report says. 

The report offers three key themes that can drive cities' strategies for job creation in the coming years:

Nearly 40% of America's current jobs are in categories that could shrink by 2030. The main thing these jobs have in common is that they involve routine or physical tasks. Jobs at risk of displacement include office support, food service, production work and machine operations, retail sales and customer service roles.  

But technology also will create jobs, mainly in healthcare, STEM, business or legal professionals, creatives or arts management and work requiring personal interaction. Shifts already are occurring and jobs are being added in areas that make use of new technologies such as software developers, information security analysts, solar panel installers and wind turbine technicians. Healthcare jobs will remain in high demand, especially those that cater to aging Baby Boomers such as hearing aid technicians.  Increasing affluence in society is creating demand for jobs as well. Personal services including massage therapists and fitness trainers are on the rise.

The report predicts growth in the transportation sector despite autonomous vehicle (AV) development. Researchers indicate it will take years to overcome the technical and regulatory barriers to AV deployment and for companies to replace their transportation assets already on the road.

About 8%-9% of the jobs technology will help create by 2030 will be ones we can't yet imagine because they barely exist today.

Even though America could experience positive net job growth in the coming years, the jobs won't appear in the same places as right now. As demand for skills changes, high-wage jobs are expected to expand and the loss of middle wage jobs evident over the last 20 years is expected to continue. The report flags "notable inequality" among regions and demographics.    The places where new jobs do appear might not align with the skills of workers in those regions, so communities will face the challenge of addressing local mismatches and helping workers gain the new skills necessary to succeed.  The report notes that technology could increase disparities among and within communities. Because "local economies have been on diverging trajectories for years," they are coming into the automation age from different starting points, and not all communities will have the momentum to offset job displacement.

An already occurring trend will intensify: Rural areas will experience slower job growth and even losses, while growth occurs in urban areas and their suburbs, namely the 25 megacities. Automation could amplify variances across demographic groups. Those with a high school degree or less education are four times more likely than those with bachelors degrees to hold jobs that can be automated. Hispanic and African American workers might be the hardest hit, researchers say, with 12 million jobs in those demographics potentially displaced. Young people represent a group with 15 million at-risk jobs and people over 50 represent a group with 11.5 million jobs at risk. "[E]ven the most thriving cities will need to connect marginalized populations with better opportunities," the report says. Although gender representation changes within occupations over time, men could have a higher job displacement rate than women by 2030 because of the occupations where they are concentrated. For example, women are expected to experience job growth because of their heavy concentrations in healthcare and personal care. However, men's displacement could be stabilized by their heavier representation in tech-forward jobs that have yet to emerge.

Technology will bring opportunities for innovation, productivity and inclusive growth, but all sectors will have to work together for a community to successfully realize those benefits. Even prosperous cities have populations struggling to find their place in the new economy and keep up with the increasing cost of living. Each city is different and partners will have to work together to overcome the area's unique set of labor challenges. "They can draw on a common toolbox of solutions, but the priorities vary from place to place — from affordable housing in major cities to digital infrastructure that enables remote work in rural counties," the report says. But the common thread is collaboration on job matching and mobility, skills and training, support for workers in transition and overall economic development and job creation. Retraining workers in new and higher-level skills as well as fostering lifelong learning are two strategies viewed as critical for successfully transitioning to the more automated, tech-forward workforce.

Source: Smartcitiesdive.com

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