Since the beginning of the 21st century, technological innovations such as broadband internet, smartphones, artificial intelligence and robotics have transformed our lives in almost every aspect of it.
These profound changes have come under two key terms that have become increasingly used in recent years: the Fourth Industrial Revolution (known more commonly as the 4IR) and the Internet of Things (IoT).
The former pertains to the currently ongoing innovations and disruptions of digital and smart technologies which utilize robotics and artificial intelligence. The latter describes how ever-increasing aspects of our lives now use and even entirely depend on the internet.
IoT can range from remote working and online board meetings to kettles that connect to the internet and can be turned on through a smartphone application.
One crucial part of the economy and our lives these phenomena are affecting are our jobs.
Aging populations and climate change are also two huge factors which are already affecting the job market. Slowing rates of population growth worldwide and longer lifespans are creating an increasing need for care workers. Climate change will uproot many traditional jobs and industries and create demand for jobs in environmental sustainability.
Last week, the AUC School of Business hosted a panel discussion moderated by Ghada Howaidy, associate dean for executive education and external relations at the AUC School of Business, on how our future working lives may look like considering these factors.
One of the international experts in attendance was Srinivas Reddy, chief of skills and employability at the International Labour Organization (ILO). “The world of work is going through profound transformation,” he said, citing technological change, globalization, climate change and environmental sustainability as the key factors that will radically change the way work is organized.
On machines, Reddy cited a World Economic Forum (WEF) report from last year that said that up to 85 million jobs may be displaced by the shift in the division of labor between humans and machines.
However, he also said that up to 97 million new types of jobs will be created but they will require major reskilling and upskilling from the world’s labor forces to meet the demands of the job market.
In order for the global economy to absorb these radical changes, Reddy said that job creation has to focus on what he termed “the three new economies.” These are the care economy, the digital economy and the green economy. Additionally, job creation needs to be strengthened in the rural economy.
The world’s ageing population does not need to be a crisis of labor supply and caring for retirees. “If we double the investment in the care economy, it could lead to a creation of nearly 475 million jobs by 2030.” The care economy is also not limited to the elderly but includes caring for people with disabilities and those unable to work.
The global climate emergency is also going to require a massive effort to mitigate the effects of climate change, to decarbonize and transition to renewables and capture the carbon in the atmosphere. While many jobs would be lost with the gradual downsizing of fossil fuels and the lifestyle changes that will have to be made, Reddy assured that “the green economy could create as many as 80 million new jobs.”
“Technology disrupting labor relations is nothing new,” said Pedro Brinca, assistant professor at the Nova School of Business, University of Lisbon.
Brinca brought a historical perspective to current events by citing how in the 18th century, when James Hargreaves invented the spinning jenny, people became angry that it would put them out of work. Gangs called “machine breakers” were formed and went to factories to sabotage the spinning jennies.
What’s new today, Brinca said, is the speed of innovation and implementation, and the speed of disruptions. Older generations are becoming obsolete at a quicker pace than before.
Technology used to always improve quality of life. The higher productivity and efficiency which newer technologies brought always spilled over into wages for workers and improvement in living standards for everyone. This was a trend that lasted up until the 1970s. After the 1970s, what has been observed in Western countries is a “disconnect between the increases in productivity and labor compensation,” he said.
“Technology keeps evolving. We are being able to produce more and more with the same resources but very few of that extra wealth that is being created is flowing to the average joe. That also creates a lot of problems. Societies [become] extremely vulnerable to populism, to anti-establishment movements and sentiments.
One of the biggest challenges that we have facing forward is how to develop policies that include everyone, that have in place the right incentives for people to be productive, to be efficient, to be competitive, but at the same time we don’t leave people behind.”
Abla Abdellatif, executive director and director of research at the Egyptian Center for Economic Studies (ECES), gave her own insights on the Egyptian context.
She outlined four key issues in Egypt’s job market. The first one she mentioned was how technologies are already affecting different age groups differently. Some are benefitting and some are losing out. She also pointed out it is affecting men and women differently and these impacts need to further research and assessment.
Egypt cannot stay with the same structure at the ministry of labour, she added, saying that it was outdated and falling behind. The country’s infrastructure also needs to be updated to accommodate the 4IR and economic reform to this end has to be carefully targeted to benefit the majority.
While most of the experts focused on what is to come in the world of work, Nagla Rizk, professor of economics at the AUC School of Business, insisted that the future is already the current reality. And in Egypt, the country’s particular problems are exacerbating these realities.
According to Rizk, who is also the founding director of the Access to Knowledge for Development Center (A2K4D), one of Egypt’s major problems is its dependence on external sources of wealth such as the Suez Canal, tourism and remittances. Another is its large and underutilized informal sector.
She insisted that the latter has to be embraced and brought into the formal economy, as it was severely affected by the COVID-19 pandemic. Being the country’s largest employer and with the majority of the population being under 30 years of age, the two should be intertwining assets, yet unemployment is still high among the youth.
How Egypt should move forward, Rizk said, should be relevant to this demographic. A major help would be the proper use of data, she said. Effective collection of data and analysis for desegregation is required for targeted policies.
Among the jobs that will make way for automation in the near future are call centres and retails jobs, according to Ayman Ismail, founding director of the AUC Venture Lab and Abdul Latif Jameel Endowed Chair of Entrepreneurship.
Instead, jobs will grow in warehousing, delivery and e-commerce. Platforms such as smartphone applications and the gig economy will become a huge part of the job market. This will require future workforces to become digitally literate and tech savvy and opined that everyone needs to learn coding.
In other remarks, Reddy said that there is an urgent need for education and work to come closer as there are currently huge gaps between the two. He also claimed that the traditional career approach of having one job for life is now obsolete. He questioned whether a Master’s degree will guarantee a person’s job for the following decades.
Reddy insisted that the future will require upskilling, reskilling and lifelong learning for the job market to remain sustainable. He said this responsibility lies on all the actors involved including government, the private sector and the individual. On the first two actors, Reddy said it is on them to ensure access for the majority of individuals who will need it.