- Due to a lack of legislation, NZ and Australia are not prepared for a networked internet economy
- The middle and low skilled will earn less and need support for basic needs like housing and food
- High skills jobs will require domain expertise, creative problem solving and interpersonal skills
By Fiona Crawford
It has become almost a cliché to hear that a young person entering the workforce today will change career several times and that children currently in our primary schools will most likely be doing a job that hasn’t yet been invented.
While both are almost certainly true they do little to prepare us for the challenges — and opportunities — of the future of work. One thing is certain. We will all be working longer. With life expectancy on the rise, in 2014, Australian Treasurer Joe Hockey announced that the eligibility age for the age pension will increase to 70 by 2035. In New Zealand, the appropriate age of eligibility for superannuation is under debate (currently 65).
But less clear is what we will be doing in this brave new world of future work, where driverless cars and 3-D printing make the workplace seem like an episode of a science fiction TV series.
Chartered Accountants Australia and New Zealand has taken a leadership role in considering what the future holds for the working world. In February, our annual thought leadership forum, held in conjunction with the Business Faculty of RMIT in Melbourne, this year focused on “Future Proofing the Profession: Preparing Business Leaders and Finance Professionals for 2025”.
A range of academics, policymakers and practitioners contribute both to the forum and our Academic Leadership Series of publications, which is an important platform for dialogue about future directions in business, the profession and society.
Common among the speakers at the forum were concerns with the global drivers of change.
Tim Fawcett leads Cisco’s Corporate and Government Affairs function in Australia and New Zealand. Responsible for Cisco’s national engagement strategy, Fawcett is at the forefront of corporate thinking about how to adapt and innovate for the future workplace. He argues that Australia and New Zealand are not well positioned to meet the challenges of a networked internet economy, pointing to a regulatory system that has little or no consideration for emerging digital businesses.
He says, “our lawmakers rarely consider those issues when they’re legislating, therefore there’s very little debate about the issues and how new laws may hinder the adoption of the internet economy”. What does this mean for productivity improvements and job growth? Other countries in our region will gain these by embracing the internet economy — Australia and New Zealand may be left behind.
Fawcett points to companies like Amazon, Uber and Airbnb, as meeting the challenge of ‘innovate or die’. These companies are also presenting challenges for governments. Consider the headaches Uber has caused governments in grappling with issues around taxi regulation. “Consumers are voting with their feet and governments are unable to keep up with the pace of change”, says Fawcett.
“If we don’t legislate to accommodate for these massive shifts that are occurring, the pessimists might win”.
What do rapid changes in technology mean for traditional industries? Goran Roos is the Chair of the Advanced Manufacturing Council in South Australia. He sees unprecedented productivity growth just around the corner, grounded in technology. While that sounds positive, there’s a downside, which is that this productivity growth will far outstrip the demand growth. In other words, says Roos, “you will be able to satisfy the demand with substantially fewer people than you have today”.
He gives the example of the legal services industry in the US, where forecasts suggest that legal services demanded ten years from now will be able to be satisfied with ten percent of the present number of employed lawyers. This is in no small part due to the incredible increase in computer processing power, but also because of access to digital data. And on top of this are developments in big data, the applications that make sense of the enormous quantities of digital data now available.
Roos argues that these changes will have a profound impact on jobs. While much of the focus in the media is on the decline in manufacturing jobs, Roos sees the impact as most likely to be felt on medium skills jobs, “we are seeing an elimination of the middle in professional services … it is disappearing at a pace that is unprecedented”. In Australia thousands of jobs will be lost in the legal and accounting professions over the coming five to seven years.
Polarisation is the likely outcome. There will be two extremes, says Roos, “the high skills jobs that require domain expertise as well as creative problem solving, interpersonal skills and the low skills jobs, for example, the cleaner needed to clean the office”. This polarisation has widespread ramifications for society — while wages for the highly skilled will rise dramatically, the middle and low skilled will be the no wage and the low wage earners. Those falling into these categories will need support for their basic needs, like housing and food, and this will be a significant cost to society, not only financially but in terms of political and social upheaval.
Grim news indeed. So how do we escape what seems an inevitably bleak fate? There were plenty of ideas from those both speaking and attending the Forum and education was mentioned again and again as key to preparing for the future with optimism. While specialisation will place future workers in the high skills category Roos describes, success will require more. Depth as well as breadth, so that a specialisation can be complemented with other areas of expertise.
We are seeing an elimination of the middle in professional services … it is disappearing at a pace that is unprecedented.
Ross Dawson is a leading futurist, entrepreneur and strategy advisor. He sees relationships and creativity as essential attributes in the future working world, arguing that “human relationships, relating, understanding, empathy, engaging” are what sets us apart from machines. He says “the most important part of education is playing because it’s engaging with others, socialising”. Similarly, creativity is a particularly human attribute and Dawson is excited about the potential for education to foster thinking that can promote new ideas that “bring together things that have never been connected before and express that in a new way visually through words, through imagination, through arts”.
The ultimate capability is to combine capabilities. Imagine a world where computers support doctors’ decisions by scanning tens of thousands of articles to synthesise data, evidence, drug interactions and so on and then make a recommendation; the doctor’s specialisation and the computer’s complementary information, providing better, faster and more imaginative ways of solving problems. The future doesn’t look so bleak after all.
Fiona Crawford is an editor and writer and founding member of editorialcollective.com.au
This article was first published in the June 2015 issue of Acuity magazine.