A January 2019 report, “Automation and Artificial Intelligence: How Machines are Affecting People and Places” written by Mark Murro, Robert Maxim and Jacob Whiton of the Brookings Institution, offers insights into how automation and artificial intelligence will be affecting job prospects in the United States through 2030.
Utilizing data from the Bureau of Labor Statistics, labor market analysis firm Emsi and the McKinsey Global Institute, this study reports that 25 percent of U.S. employment, or 36 million jobs in 2016, will be susceptible to high exposure — that is, greater than 70 percent of current task content at risk of substitution — to automation and artificial intelligence (AI) in the coming decade. Among the most vulnerable occupations are those in office administration, production, transportation and food preparation. Specifically, the automation and AI potential for production occupations is at 79 percent, second only to food preparation and serving related occupations (at 81 percent).
In November 2018, Deloitte LLP and The Manufacturing Institute, the social impact arm of the National Association of Manufacturers, released the 2018 Deloitte and the Manufacturing Institute Skills Gap and Future of Work Study. This study found that the widening manufacturing skills gap is expected to grow in the United States from 488,000 jobs left open in late 2018 to as many as 2.4 million manufacturing jobs going unfilled between 2018 and 2028.
“With nearly 2 million vacant new jobs expected in 2028, compounded by 2.69 million vacancies from retiring workers, the number of open positions could be greater than ever and might pose not only a major challenge for manufacturers but may threaten the vitality of the industry and our economy,” said Paul Wellener, vice chairman at Deloitte.
According to Deloitte, the manufacturing sector has been consistently contributing to more than 10 percent of total U.S. gross domestic product, and National Association of Manufacturers calculates that every dollar in output from manufacturing generates an additional $1.89 of value and every direct job creates 2.5 additional jobs.
In the U.S. manufacturing sector, there are “production-focused” positions that are low skilled and “skilled production” positions that require specific training to develop complex skill-sets. As to the future of production-focused positions, the manufacturing sector is choosing to eliminate them through increased automation.
However, for skilled production positions, more than half of manufacturing executives in the skills gap study cite technology/computer skills, digital skills, programming skills for robots/automation, working with tools and technology, and critical thinking skills to be in demand over the next three years. This survey result echoes findings from a recent World Economic Forum study (“The Future of Jobs Report 2018”), which identified critical thinking, creativity and originality, attention to detail, problem solving, and people management — all uniquely human skills of increasing importance as automation in the form of robots and cobots — is added to manufacturers’ production lines.
So what is the U.S. manufacturing sector doing beyond turning more to automation and AI to address the skills shortage and reduce this troubling employment gap?
“To address the skills shortage, companies are trying new ways to fill the gap and appeal to candidates,” said Chad Moutray, director at the Center for Manufacturing Research, The Manufacturing Institute, and chief economist at National Association of Manufacturers.
To this end, 39 percent of manufacturers report that they are implementing new learning and development programs internally and externally. Moreover, 77 percent of manufacturers are prioritizing competencies and potential in job candidates over strict adherence to factors such as years of experience, and 65 percent acknowledge they are willing to train employees on the job. In addition, many manufacturers are developing knowledge transfer programs and short-term project opportunities for retirees, and 83 percent of manufacturers are reportedly prepared to pay more to attract and retain skilled talent, with 8 percent offering signing bonuses.
U.S. manufacturers are now responding to labor market conditions with flexible and adaptive employment policies while incorporating new technologies designed to enhance employee productivity in upcoming years. However, over the next few years, the combination of automation and AI will be replacing production-focused employees on company floors across America. Reminiscent of capital substitution in the history of America’s agricultural industry, the need for expensive labor to fill monotonous, routine jobs will increasingly become an artifact of the 20th-century factory floor.
The U.S. manufacturer of the future will employ people who possess digital skill-sets and add operational value by solving problems creatively through a human-machine interface. According to results from the Deloitte/Manufacturing Institute study, 67 percent of U.S. manufacturers surveyed expect a positive effect of digital connected work tools on personal productivity, with the expectation they will increase the use of online collaboration platforms, work-based social media, and instant messaging in the next three to five years.
The 21st-century factory will be a challenging place of organizational creativity and technological ingenuity for those employees choosing to work in such a dynamic environment.
