The Future of Jobs: The Impacts of AI, the Green Transition

AMANPOUR: And turning to the future of the workforce, the World Economic Forum published its latest employment report that found that nearly half — sorry, nearly a quarter of jobs are expected to change in the next four years with A.I. and automation changing the landscape. So, what does the future hold for workers, to discuss which sectors will see the largest changes, WEF managing director Saadia Zahidi joins Hari Sreenivasan.

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HARI SREENIVASAN, HOST: Christiane, thanks. Saadia Zahidi, thanks so much for joining us.

The new World Economic Forum Future Jobs Report, it comes out every couple of years. What were the top lines this time around?

SAADIA ZAHIDI, MANAGING DIRECTOR, WORLD ECONOMIC FORUM: So, we tried to look at forced (ph) technological destruction, but also, what’s happening in terms of geopolitical shifts and how supply chains are relocating. We also tried to look at the green transition and what that means for jobs.

And overall, we find that about of quarter of all jobs will be affected in some form or the other.

So, 23 percent that are going to be affected, 12 percent that will decline or disappear and 10 percent that will be grown. Largely speaking, though, that’s on average a similar amount that’s going to be declining and a similar amount that’s going to be growing.

SREENIVASAN: All right. So, I can do basic math, and that still leaves a couple of percent short. So, are there specific sectors that will be more greatly impacted in this kind of turn?

ZAHIDI: Yes. There is about 14 million jobs that that 2 percent difference translates into. And it’s very clear that it’s the roles where, previously, there was a lot of concern about the robot, the revolution and about industrial robots and what that was going to do to jobs in factories and a lot of our previous reports have seen what will happen on those sectors.

What we’re seeing this time is there’s much more concern about what will happen due to the rise of algorithms and especially generative artificial intelligence. So, the types of roles that are expected to be displaced, people who are bank tellers, people who are postal service (INAUDIBLE), people who are administrative assistants and secretaries, and yet, at the same time, there’s a lot of growth that’s also expected, but that is going to be for those folks that are able to do machine learning and data analysis, people who are working in sustainability, people who are working in ESG and a number of roles that will be growing there that are at the combination of the climate transition and technology.

SREENIVASAN: So, that means that there’s a tremendous amount of, I guess, re-scaling necessary to try to employ those people who might be displaced. I mean, how does that happen?

ZAHIDI: Yes. So, there are certainly some elements of this that falls on the worker themselves, and that’s where workers will have to continue to reskill and upskill themselves and life’s long learning, I think, finally has to become a reality.

But there’s another element, which is, at a scale that this is currently happening and the speed with which this is currently happening, governments will have to put a lot more investment towards setting up the actual operating system around reskilling and upskilling.

And if we look towards economies like Denmark that have had this for a very long time, what they’ve done is they brought the three things together.

Yes, the constant learning, the reskilling, the upskilling, but they’ve tied that up to income support when somebody in is between jobs, and they’ve tied that up to career support and job centers that can actually help somebody transition into a new role. So, it’s that combination of three things and not just reskilling and upskilling.

SREENIVASAN: You know, when you look at, kind of right now, the conversation around artificial intelligence and generative A.I., there seems to be a lot of — more on the fear side of things, on what this is going to do to different sectors of white-collar jobs. Where is the potential that you’re seeing for the new jobs that, perhaps, we’re not envisioning yet?

ZAHIDI: You know, there is almost all possible disruptions that have taken place in the past. There has always been more job creation, net job creation, and even this time, despite those fears, what we found is that 50 percent of companies still expect generative A.I. to be a net job creator.

25 percent of companies expect it to be a net job destroyer, and the other 25 percent are essentially undecided.

So, overall, there’s still this net positive effect. And the types of roles that are being displaced, on the one hand, were roles that for a long time were predicted as coming under displacement. But exactly to your point, it’s now a set of high — relatively high skills, middle income, middle class roles that are going to come under this type of new displacement.

Now, when we speak to businesses that are actually integrating some of these technologies, they’re finding that most of the time this is not about full displacement, this is about augmentation. So, the same person will continue to do some version of those tasks, but they will be integrating more technology and they will be expected to apply more creative thinking, more analytical thinking, more leadership, more social influence, more connecting with other people.

So, where is some possibility that a lot of this simply heads towards augmentation, but again, that’s back to then reskilling and upskilling that has to be provided by employers themselves.

SREENIVASAN: You know, in developing economies, we’ve seen kind of a disconnect. On the one hand, we have labor shortages and then, on the other hand, we have this sort of layoffs that are happening at the same time, especially in the sort of digital and tech side.

ZAHIDI: Yes. So, in advance economies there’s sort of a hangover from COVID, in particular, where a number of people have chosen to drop out of the workforce, in some cases permanently. Some people have chosen to relocate to other locations. And now, their workplaces are asking them to come back. Some people in, for example, the health care sector, feel burned out or don’t feel treated during the time that they were having to work under very high degrees of stress, and some people in service work who were potentially fully laid off during that time and now, has to come back are simply not interested in coming back in such a difficult environment.

So, there is a set of people that have potentially ruled themselves out for some time, and that’s leading to those talent shortages. There is a second element to those talent shortages, which is skills. The types of roles that companies are looking for right now, especially at the higher skilled end of the white-collar workforce, these are roles in data management, these are people who are working in machine learning, these are people who are sustainability specialists, these are people who are solar panel installers, these are people with very technical skills, and that is something that simply doesn’t exist in the numbers that companies are looking for.

So, that’s really causing some of this almost sort of fragmentation where companies are looking for talent, and at the same time, they are laying off those roles that they simply don’t need anymore.

SREENIVASAN: I wonder if these companies are doing themselves a disservice by laying off workers instead of reskilling them, especially if there’s a tight labor market in these advanced economies.

ZAHIDI: Many companies are starting to find out that the very rapid decisions they took, in terms of layoffs, especially workers that were service workers in — during the time of the pandemic, and now that they are having to search for that talent that it may, in fact, have been better to continue to keep those workers on, to provide them with some support with reskilling and upskilling, to keep some level of connection, to keep some level of loyalty with those workers, because it actually ends up being cheaper and more efficient for them in the long-term to keep those workers on.

Most companies expect to have, within a year, relatively high returns from reskilling and upskilling investments. So, it actually is worth keeping the worker on than laying off in most cases, and I think that’s going to be a second lesson that companies will learn throughout the course of this economic downturn.

SREENIVASAN: One of the larger sections of your report talks about kind of the green sector and the transition that we are all in. Where do you see the largest amounts of kind of potential? Is it the agriculture sector? Is it the fossil fuel sector?

ZAHIDI: So, this has been one of the bright spots in the report in terms of being in that job creator, the green transition that we are in the midst of in most advanced economies. But the types of jobs that it’s creating are actually very widely dispersed. They don’t sit across one sector.

So, for example, most companies are looking for people who are broadly specialized in ESG and sustainability. So, sustainability specialists, it’s how they’re being described. A second element is specific technical roles like people who are working in solar energy. A third element is somebody who is working in waste management and the circular economy. So, these are very different skill sets, these are across very different functions and many different industries. So, there’s high potential for growth, but these are not necessarily all high skilled roles.

SREENIVASAN: And it seems like, also, health care is one of the areas in the report here that seems like it has a massive increase on the way because no amount of generative A.I. is really going to be able to replace physical and human contact, if that’s what’s necessary, in providing care.

ZAHIDI: Yes. And I think this is going to be one of the sectors that governments in particular will have to watch around the world, advanced and developing economies alike. Because, on the one hand, there will be a huge move for greater workforce in health care, because there is higher demand, and there will be a huge need for greater elder care, there will be a big need for greater childcare. So, the entire care sector will be in much higher demand than it was before.

And on the other hand, if you look at the pipeline of, especially younger people, very few want to go into this sector because they’ve all just observed how that sector is generally underpaid, yet in high demand, is qualified as essential work, but not necessarily valued as such by society.

And so, I think we are going to face a major challenge crunch in that sector, and governments will quite seriously have to look at elevating wages and working conditions in that sector.

SREENIVASAN: And I wonder about how this impacts higher education or what we see as signs of a credential these days, because if there are a new set of skills that are necessary and if it’s something that perhaps you don’t need to go to school for four years to do, do employers see that change happening that are we allowing certified individuals to come in that don’t have the — well, the college track?

ZAHIDI: Some digital companies and some companies that have more technical roles, because they are facing shortage of talent, they are starting to look this way. But I think, in general, this is something, economy wise, that most countries will have to start to do. Because it no longer makes sense to look at somebody’s credentials from 20 or 30 years ago when you’re trying to bring in an experienced worker, nor to simply look at which organization they worked for in the past on their CV, but to actually assess yourself what are their skills and to bring them in on the basis of those skills.

And there’s interesting opportunities here because if you start looking at people with the sort of skills first mindset, it does create a lot more opportunity for those without college degrees who potentially come from lower income backgrounds, it creates more opportunity for women and for minorities, and that’s starting to show up in some of the data.

SREENIVASAN: You know, one thing I want to ask about, you wrote book awhile back, “Fifty Million Rising: The Rise of Working Women in the Muslim World,” and I’m sure it’s something that’s personal and important to you, and I wonder, you know, in 2018, you became the youngest managing director at the World Economic Forum.

And as these transitions have happened, through the pandemic and now beyond, where do you see that growth happening, whether it’s women in the

Muslim world or young women entering the workforce? Is it becoming better, more equal, still slow, better in certain parts of the world? What do you see?

ZAHIDI: Yes. I mean, every year we produce a global gender gap report at the World Economic Forum and tried to benchmark how that gender gap is evolving. And it’s very clear that there was a hit to the gender gap during COVID, because the types of roles that were disrupted tended to be the types of roles that women have been earning good middle class livelihoods from, whether that’s in travel and tourism or administrative work or the service industry.

Because a lot of the growth in the roles was around technology and digital roles, which tend not to be large sort of pools of women that are going into them. And then, finally, third, because the care infrastructure simply didn’t exist for most families to be able to balance working from home and being able to continue to work in to income households. So, there was a massive disruption.

I think we’re starting to see some recovery from it. The latest data would say, yes, and that disruption applied equally in the Muslim world as it did elsewhere. But we are starting to see some recovery, including in the U.S., including in places like the UAE, including in places like India. So, there is starting to be some shift, but there’s going to need to be at least a generation’s worth of recovery compared to where we were pre-COVID.

SREENIVASAN: So, five years out from now, how fast do you see some of this sort of predictions coming true? I mean, what kind of impact are we going to see on the global labor market?

ZAHIDI: You know, what’s interesting is that as much as we’re talking about the green transition, as much as we’re talking about technology adoption, the biggest threat to jobs is actually due to the economic downturn that we are currently in.

The specific trend that is likely to — most displace jobs is the slowing economic growth, rising costs, which are then, of course, reducing consumption from people. And then, third, the rising cost of inputs into production in most companies, that is likely the biggest — to be the biggest threat.

SREENIVASAN: You’re a trained economist, you’ve worked as one, do you see the signs necessary that predict that a global recession is on the way?

Because, in the U.S., it seems like we’ve been talking about and hearing about a potential recession, waiting for the other shoe to drop for almost a year and a half now.

ZAHIDI: I think policymakers have been taking a number of actions to prevent things from heading in that direction. And yet, the same time, we haven’t quite seen a bouncing back either. And we just launched, last week, our “Chief Economist Outlook,” which Surveys a number of different chief economists. So, not just our view but actually tries to ask chief economists from around the world, across different sectors. And interestingly, 45 percent of them are expecting a global recession, and exactly 45 percent of them are expecting to bypass and avoid a recession.

So, I think there’s just enormous amounts of uncertainty in the data and we don’t necessarily know. But of course, policymakers are putting in place a

lot of efforts, and that is helping keep this middle ground.

SREENIVASAN: One of the things you write is, there is no doubt that the future of work will be disruptive, but it need not be dystopian. So, what do we need to do to ensure that these changes in the job market is a healthy transition?

ZAHIDI: I think one element is responsible employers, and that’s to a large part about their work force. And they have to ensure that they are investing more in reskilling and in upskilling, but they also have to think about, you know, to the point that we discussed earlier, is it better to be keeping the loyalty and energy of my workforce, and to, for some period of time, sacrifice short-term efficiency for the longer-term shift towards a highly productive, motivated, innovative workforce, because I’m going to invest in their skills?

I think that’s something employers will very seriously have to think about because they are not simply going to be able to go to the market and buy ready-made talents for what they are looking for. So, much more investment as responsible employers is one piece of this.

I think governments truly thinking through — you know, industrial policy is back and (INAUDIBLE) across most of the western world. But if governments expect to be serious about investing in the digital transition and investing in the green transition, they equally have to invest in the skills that are required to make that happen. And so, again, setting up those lifelong learning systems will be critical.

A third element is workers themselves, but it’s also younger people. It’s also those that are, for example, in secondary school. It’s very clear

already that they have to think about technological literacy, they have to think about leadership and social influence skills and they have to think about analytical and creativity skills, regardless of the subjects that they choose across what they do, which degrees they pick, which certificates they get, they have to have those three generalized skill sets.

SREENIVASAN: Saadia Zahidi, World Economic Forum managing director, thanks so much for having us.

ZAHIDI: Thanks for having me.