It is so clear that social and economic anxieties are running high within our world. The reasons are obviously diverse and complex. However, one root theme that encompasses the socio-economic anxiety is economic and technological disruption and its impact throughout all corners of the world economy.
If we examine industries that sparked and fire-powered the U.S. economy in the ‘80s (the automotive industry), ‘90s and ‘00s (technology/Silicon Valley), at the root of these economic evolutions and revolutions were STEM (Science, Technology, Engineering and Mathematics) based concepts and
How will technical disruptions and automation affect the future of work and labor?
Will there be enough jobs to go around as automation becomes more prevalent in our work places and offices?
Will new jobs created by technology and automation offset the loss of traditional administrative and manufacturing jobs?
What will become of displaced workers?
And perhaps the most important question: will our children experience the same level of prosperity and quality of life as previous generations?
Economic Inequality, Rising Automation and the Long-Term Ramifications
After nine years of sustained economic growth and with unemployment hovering around 4%, polling shows that most Americans feel we are still on the wrong track. Considering the success of populist-centric campaigns on the left and right during the most recent election cycle, it is clear that the economic anxieties are the vitality of America’s political unrest.
For generations, the American Dream is the most defining feature. The belief is that if you were willing to work hard enough, you could improve not only your economic prospects, but also the future prospects of your children. However, it’s safe to say that the economic strides since the Great Recession have not been felt by a large portion of Americans from those living in old factory towns and rural counties to those in disadvantaged urban areas.
According to a report published last year by the Federal Reserve, the richest 1% of families controlled a record-high 38.6% of the nation’s wealth in 2016. Factoring in that U.S. wage growth remains slow, with median real wages growing only 0.2% over the past year. Since 2000, it’s clear that economic inequality is growing while the economic mobility has significantly eroded over time. It has become more obvious that automation is more prevalent and it cannibalizes old manufacturing, service and clerical jobs.
According to statistics compiled by the McKinsey Global Institute last year, 39 to 73 million jobs stand to be automated in the U.S. by the year 2030 and an estimated 75 to 375 million people around the world may need to switch occupational categories or learn new skills. Technology and the disruption associated with it will inspire and force massive changes. With the study finding that automation and robotics will have an enormous impact on American society and the world. While the study finds the potential for economic inequality (and political instability) to grow, it also has a more positive outlook for the future, finding that economic growth and rising productivity could offset job losses and that technology could ultimately create higher-paying jobs in the long-run.
Embracing the Future: Policy Reforms and Technological Promise
The key to creating a more competitive and inclusive economy is not running from the disruptive effects of technology, but rather embracing it. The adoption of new technologies always happens at an accelerated rate. If we continue to cling to traditional notions and descriptions of jobs, other countries will invest in these new professions and develop entire systems by adopting next generation of technological labor.
It took the airlines 68 years and automobiles 62 years to gain 50 million users,
but it took Facebook and Twitter just two years to do the same.
The new generation of economy by emerging tech is aimed to create high-paying jobs, to promote long-term prosperity, and to bring upward economic mobility back to the U.S. However, this can only occur if we pursue reforms that embrace technology and give people the technical skills needed to fill the growing number of STEM vacancies.
In summary, by embracing the STEM, the public and private sector policy reforms is the only path forward to creating a competitive economy that works for the vast majority of Americans. Here are a handful of simple policy prescriptions that can accelerate this process
1. Placing a Higher Emphasis on STEM Education
The trendy saying “all companies are technology companies” fast becomes a practical reality. With technology becoming more ingrained in our factories and workspaces, it will be hard to find jobs in the future that don’t require a certain amount of technical prowess and familiarity. From manufacturing and transportation to healthcare and financial services, technology is not only taking and creating jobs, but also changing the nature of work, how we work and the tools we use to work throughout many diverse industries.
It has been estimated that more than two-thirds of tech jobs are already outside of the tech sector which is highlighting the important growth of technology throughout numerous sectors of the economy. Consequently, developing a strong STEM skillset is the greatest competitive approach that a professional can achieve in current job market. Also, reforming our education system to encourage the next generation to develop these skills will promote a more dynamic economy.
2. Highlighting the Diversity of Opportunity in STEM Careers
There are a number of systemic reasons for this, ranging from how we teach STEM subjects, to differing educational opportunities for those of different socio-economic backgrounds, to perhaps a lack of awareness on the diversity of opportunities that exist within STEM careers. No matter the reasons, informing students on the diversity of career paths that exist in STEM will certainly help to spark interest in filling technical vacancies throughout our economy.
For instance, it might surprise many students to know that half of all STEM jobs are in manufacturing, healthcare and construction. The Brookings Institution also notes that half of all STEM jobs are available to workers without a four-year college degree and that those jobs pay an average annual salary of $53,000—a wage that is 10% higher than jobs with similar education requirements. For those looking for an alternative to an undergraduate education (and many times at a fraction of the cost or debt), a career in STEM could prove to be a wise investment.
3. Public and Private Sector Investment in Retraining Programs
When we talk about education, we often only refer to primary and secondary schools. However, the stark reality is that education is a lifelong exercise. And those educational fields should require the next generations to keep up with the latest trends to be effective professionals. As technology advances, not only will certain jobs be displaced by new professions, the requirements and skills required for those jobs will also inevitably change.
To ensure that our professionals stay engaged in the economy, it’s crucial that the public and private sectors work together to invest in training and retraining our professionals. A strong public and private partnership will be necessary to have our economy moved forward. If we give private companies do the work and they know exact skills of their employees needed to be successful, our government will need to take a more active approach to ensure our economy remains fair and competitive. Eventually, investing in the future of our workers will go a long way toward achieving that goal.
Changing and disrupting always create a certain amount of stress and unrest. However, we can remain optimistic that this is healthy and will provide the spark necessary to fan the flames of our future. Implementing the education and policy shifts suggested above will be an enormous challenge with no doubt. At the end, embracing disruption and the emerging tech economy will strengthen the American Dream and create another generation of prosperity for all everyone in this cyber world.