People

Ageing and automation: how will these workplace trends interact?

In which countries are older workers most at risk from workplace automation? New research gives a global insight into which economies are most vulnerable

Recent media coverage on the future of work overwhelmingly highlights two trends: ageing populations and automation. But what do we know about how these developments will interact?

This was the subject of a 2018 report titled  The Twin Threats of Ageing and Automation by Marsh & McLennan Insights, Mercer, and Oliver Wyman. Based on data from the United Nations (UN), and from Oxford researchers Carl Frey and Michael Osborne, the report estimated the average risk of automation for older workers (aged 50 to 64) across a sample of 15 countries.

An important pattern

Specifically, the authors charted the rate of ageing in those 15 nations against the discrepancy between the average risk of automation for older versus younger workers (see chart here). This allowed an important pattern to emerge: countries in which older workers are projected to grow fastest are also the ones with older workers having more low-skilled occupations, such as machine operation, admin services or repetitive assembly work. In fact, China came out on top because 76 per cent of work conducted by older workers is automatable, while at the same time the proportion of Chinese workers aged 50–64 will rise by more than 1.28 times.

Clustering the results by regions, among emerging Asia Pacific nations, Vietnam and Thailand, in addition to China, face very high rates of projected older worker growth, while their current status as manufacturing hubs will likely decline with more advanced technologies. Among the more developed Asia Pacific countries, in Singapore, Japan, and South Korea older workers are disproportionally doing lower-skilled jobs like food serving and cleaning, while their numbers are on the rise.

Germany and Italy at risk

In Europe, the two countries with the highest risk are Germany and Italy. In Germany, older workers tend to be employed in the manufacturing and low-skill services industries. In Italy, in fact, both younger and older workers are at risk as both age groups are overwhelmingly employed in automatable positions.

While the UK is still ranked among the lower risk countries, immigration restrictions following Brexit might result in an older overall working population, speeding up the onset of the trend of ageing and automation. Lastly, in the Americas, older worker jobs in Chile face the highest risk, while the proportions of older workers in the USA and Canada are projected to go down. However, these trends depend on the future of immigration policies in the respective countries.

Facing unique challenges

The report further lists several reasons why older workers tend to be more at risk than their younger counterparts. Prominently among those reasons range the unique challenges in the labour market faced by older employees, like high long-term unemployment and age discrimination.

Another factor, according to a widely cited OECD survey, is that just 10 per cent of older workers have the ability to complete new multiple-step technological tasks. Thus, increasing ICT skills among the older adult population will be one of the key tasks to ensure inclusive labour markets. However, the OECD highlights that in order to thrive in the digital economy, essential skills will also include literacy and numeracy fluency, good socio-emotional skills, and the ability to work collaboratively and flexibly.

‘An increased demand for digital education…’

In this regard, PWC is predicting an increased demand for education, especially for older workers, who wish to retrain for new careers. While some of this demand can be fulfilled digitally, human teachers, coaches, and mentors will likely be sought after to guide people through the process.

If after reading this you would like to know the extent to which your job is at risk of automation then this chatbot, developed by the Office for National Statistics (ONS) in the UK, will tell you.

Dr Lara C. Roll is a postdoctoral fellow at North-West University (South Africa) and was an Academic Visitor at the Oxford Institute of Population Ageing in January -March 2019.