Automation Will Affect 60% of All Jobs, Representing $16 Trillion in Wages, Says McKinsey
McKinsey Global Institute researchers estimate that automation (artificial intelligence) will affect as much as 60 percent of all occupations, defined as those in which at least 30 percent of present activities can be automated. To put some context on that prediction, McKinsey Global Institute says “almost half the activities people are paid almost $16 trillion in wages to do in the global economy have the potential to be automated by adapting currently demonstrated technology, according to our analysis of more than 2,000 work activities across 800 occupations.”
While less than five percent of all occupations can be automated entirely using demonstrated technologies, about 60 percent of all occupations have at least 30 percent of constituent activities that could be automated, McKinsey analysts say.
More occupations will change than will be automated away, in other words. But the study also suggests that half of today’s work activities could be automated by 2055, with a 20-year plus or minus likelihood.
McKinsey notes that the scale of shifts in the labor force over many decades that automation technologies can unleash is not without precedent.
The order of magnitude impact will be similar to the long-term technology-enabled shifts away from agriculture in developed countries’ workforces in the 20th century.
“Those shifts did not result in long-term mass unemployment, because they were accompanied by the creation of new types of work,” McKinsey notes. That’s the positive spin on the matter.
“Long term” is not the same thing as “near term,” in terms of the specific individuals involved in the change, which often shifts jobs from some regions to others; from some age groups to others; and with many changes in employability attributes that are ill addressed, if at all addressed. As with all major shifts of industry model and fortunes, the impact will be highly disruptive, at the level of discrete workers.
The activities most susceptible to automation are physical ones in highly structured and predictable environments, as well as data collection and processing. In the United States, these activities make up 51 percent of activities in the economy, accounting for almost $2.7 trillion in wages. They are most prevalent in manufacturing, accommodation and food service and retail trade.
And it’s not just low-skill, low-wage work that could be automated; middle-skill and high-paying, high-skill occupations, too, have a degree of automation potential, McKinsey says. As processes are transformed by the automation of individual activities, people will perform activities that complement the work that machines do, and vice versa.
Even if just five percent of current jobs are totally eliminated, perhaps 60 percent will be reshaped.