Back to the Future: How Current Technological Changes Are Nothing New

By: Keaton Fletcher

In a recent podcast, Peter Grumble of Mckinsey Global Institute spoke with Susan Lund (a partner at McKinsey) and Richard Cooper, Maurits C. Boas Professor of International Economics at Harvard University, about the concerns regarding the changes advances in technology may bring about in the workforce. To answer this question, Lund and Cooper look backward toward other periods in history in which major technological advances greatly disrupted the workforce. Every time a new technology is developed, many existing jobs are destroyed, but more jobs, often many that were never needed or possible, are created. Lund and Cooper offer the creation and subsequent automation of development of the Ford Model T. As automobiles became more popular, the need for carriage makers and related services declined, but a host of new jobs both directly related to automobile production and maintenance (e.g., gas station attendants, car manufacturers, mechanics) and indirectly related (e.g., tourism) blossomed. Even as machine-based productivity of Model Ts increased the number of cars made from roughly eight cars per worker to about 21 cars per worker, Ford did not see a decreased workforce. In fact, as productivity increased, the price of the Model T decreased, which drove up demand for the Model T, ultimately leading to an increase in the workforce, despite the automation of much of the individual worker’s job. 

Looking at the advent of the personal computer, Lund and Cooper estimated that about 3.5 million jobs were lost because of the introduction of this technology into the workplace. However, about 19.3 million jobs were estimated to be made possible or necessary because of this new technology. The difficulty with viewing the current situation in this perspective, they argue, is that the loss of jobs feels tangible and is clear, with both statistical figures and emotional personal anecdotes to make this loss salient. The potential increase in jobs, however, is much more difficult to comprehend because many of these jobs do not exist in any form yet. 

What also makes this change particularly daunting is the need for new skills. Although technology can help reduce the barrier to entry for many jobs (e.g., barcode systems reducing the need for mental math to be an effective store clerk), it can also increase the need for unique and varied skills, many of which are related to technology. Lund and Cooper point toward estimates that roughly 375 million workers globally may need to entirely switch occupations, with even more needing to update their skill sets. This makes the rapid and effective training and re-training of middle-aged adults particularly necessary moving forward. Lund and Cooper point toward the U.S. Armed Forces as an example of successfully re-training individuals who, after a career in the Armed Forces, need to learn new skills to take on a new civilian occupation. 

In a separate podcast, Matthew Taylor (Chief Executive of the Royal Society for the Encouragement of Arts, Manufactures, and Commerce) and James Manyika (chairman of the McKinsey Global Institute) discussed how to ensure people find meaning and are able to do “good work” in the modern economy. As Land and Cooper pointed out, the workweek has shortened from about 60 hours per week 125 years ago to roughly 37.5 hours per week today, along with paid vacations and holidays. Taylor points toward increases in autonomy and flexibility as methods of improving life quality, even as wages remain stagnant. Taylor suggests offloading non-rewarding work, the drudgery, onto machines and robots, freeing up humans to pursue meaningful work that gives them a sense of mastery and autonomy. 

Although many workers may be worried about losing their jobs or needing to be retrained and many others may be excited by the prospects of more meaningful work by way of the proper use of technology, Land and Cooper both warn that change will likely not happen overnight. Although technology is developing rapidly and change is coming, there is, thus far, no evidence that organizations are adopting new technology any faster than they did before.