Rainer Strack: The surprising workforce crisis of 2030 — and how to start solving it now

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This kind of goes against everything I've heard. I'm not an expert myself but I've been under the impression that automation will have a much more significant impact than this guy seems to believe. He's citing statistics about the automation of manufacturing, when I'm not sure he understands the sophistication of the technology that seems to be just over the horizon for us. Self-driving cars for example are looking to be absolutely huge once they become widely available and profitable options for businesses.

What watching this video made me think about however (and again, not an economist here so someone feel free to show me where I'm wrong) is the fact that our economies require growth to function, and that sounds rather difficult to achieve with a stable population size, and I'm sure the population growth we experienced during the past few hundred years that is now tapering off wasn't exactly sustainable anyway. Is the necessity for growth at all reconcilable with sustainability, short of colonizing other planets?

👍︎︎ 23 👤︎︎ u/teh_hasay 📅︎︎ Dec 04 2014 🗫︎ replies

i don't think so. though he took automation into consideration and even new jobs generated through automation, he neglected how quickly robotics and AI are developing. i still believe that by 2050, most of the people need not apply for most of the existing jobs.

👍︎︎ 5 👤︎︎ u/srsly 📅︎︎ Dec 04 2014 🗫︎ replies

Maybe wages will go up if employers actually needed to compete for workers again...

👍︎︎ 1 👤︎︎ u/mcscom 📅︎︎ Dec 05 2014 🗫︎ replies

This would be a great thing if it actually happened, which is unlikely due to automation.

👍︎︎ 1 👤︎︎ u/tehbored 📅︎︎ Dec 05 2014 🗫︎ replies

A problem he neglects is automation and the demand problem. Automate away a person's job and they no longer have any realistic demand.

👍︎︎ 1 👤︎︎ u/Leetenghui 📅︎︎ Dec 04 2014 🗫︎ replies
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2014 is a very special year for me: 20 years as a consultant, 20 years of marriage, and I'm turning 50 in one month. That means I was born in 1964 in a small town in Germany. It was a gray November day, and I was overdue. The hospital's maternity ward was really stressed out because a lot of babies were born on this gray November day. As a matter of fact, 1964 was the year with the highest birth rate ever in Germany: more than 1.3 million. Last year, we just hit over 600,000, so half of my number. What you can see here is the German age pyramid, and there, the small black point at the top, that's me. (Laughter) (Applause) In red, you can see the potential working-age population, so people over 15 and under 65, and I'm actually only interested in this red area. Now, let's do a simple simulation of how this age structure will develop over the next couple of years. As you can see, the peak is moving to the right, and I, with many other baby boomers, will retire in 2030. By the way, I don't need any forecasts of birth rates for predicting this red area. The red area, so the potential working-age population in 2030, is already set in stone today, except for much higher migration rates. And if you compare this red area in 2030 with the red area in 2014, it is much, much smaller. So before I show you the rest of the world, what does this mean for Germany? So what we know from this picture is that the labor supply, so people who provide labor, will go down in Germany, and will go down significantly. Now, what about labor demand? That's where it gets tricky. As you might know, the consultant's favorite answer to any question is, "It depends." So I would say it depends. We didn't want to forecast the future. Highly speculative. We did something else. We looked at the GDP and productivity growth of Germany over the last 20 years, and calculated the following scenario: if Germany wants to continue this GDP and productivity growth, we could directly calculate how many people Germany would need to support this growth. And this is the green line: labor demand. So Germany will run into a major talent shortage very quickly. Eight million people are missing, which is more than 20 percent of our current workforce, so big numbers, really big numbers. And we calculated several scenarios, and the picture always looked like this. Now, to close the gap, Germany has to significantly increase migration, get many more women in the workforce, increase retirement age — by the way, we just lowered it this year — and all these measures at once. If Germany fails here, Germany will stagnate. We won't grow anymore. Why? Because the workers are not there who can generate this growth. And companies will look for talents somewhere else. But where? Now, we simulated labor supply and labor demand for the largest 15 economies in the world, representing more than 70 percent of world GDP, and the overall picture looks like this by 2020. Blue indicates a labor surplus, red indicates a labor shortfall, and gray are those countries which are borderline. So by 2020, we still see a labor surplus in some countries, like Italy, France, the U.S., but this picture will change dramatically by 2030. By 2030, we will face a global workforce crisis in most of our largest economies, including three out of the four BRIC countries. China, with its former one-child policy, will be hit, as well as Brazil and Russia. Now, to tell the truth, in reality, the situation will be even more challenging. What you can see here are average numbers. We de-averaged them and broke them down into different skill levels, and what we found were even higher shortfalls for high-skilled people and a partial surplus for low-skilled workers. So on top of an overall labor shortage, we will face a big skill mismatch in the future, and this means huge challenges in terms of education, qualification, upskilling for governments and companies. Now, the next thing we looked into was robots, automation, technology. Will technology change this picture and boost productivity? Now, the short answer would be that our numbers already include a significant growth in productivity driven by technology. A long answer would go like this. Let's take Germany again. The Germans have a certain reputation in the world when it comes to productivity. In the '90s, I worked in our Boston office for almost two years, and when I left, an old senior partner told me, literally, "Send me more of these Germans, they work like machines." (Laughter) That was 1998. Sixteen years later, you'd probably say the opposite. "Send me more of these machines. They work like Germans." (Laughter) (Applause) Technology will replace a lot of jobs, regular jobs. Not only in the production industry, but even office workers are in jeopardy and might be replaced by robots, artificial intelligence, big data, or automation. So the key question is not if technology replaces some of these jobs, but when, how fast, and to what extent? Or in other words, will technology help us to solve this global workforce crisis? Yes and no. This is a more sophisticated version of "it depends." (Laughter) Let's take the automotive industry as an example, because there, more than 40 percent of industrial robots are already working and automation has already taken place. In 1980, less than 10 percent of the production cost of a car was caused by electronic parts. Today, this number is more than 30 percent and it will grow to more than 50 percent by 2030. And these new electronic parts and applications require new skills and have created a lot of new jobs, like the cognitive systems engineer who optimizes the interaction between driver and electronic system. In 1980, no one had the slightest clue that such a job would ever exist. As a matter of fact, the overall number of people involved in the production of a car has only changed slightly in the last decades, in spite of robots and automation. So what does this mean? Yes, technology will replace a lot of jobs, but we will also see a lot of new jobs and new skills on the horizon, and that means technology will worsen our overall skill mismatch. And this kind of de-averaging reveals the crucial challenge for governments and businesses. So people, high-skilled people, talents, will be the big thing in the next decade. If they are the scarce resource, we have to understand them much better. Are they actually willing to work abroad? What are their job preferences? To find out, this year we conducted a global survey among more than 200,000 job seekers from 189 countries. Migration is certainly one key measure to close a gap, at least in the short term, so we asked about mobility. More than 60 percent of these 200,000 job seekers are willing to work abroad. For me, a surprisingly high number. If you look at the employees aged 21 to 30, this number is even higher. If you split this number up by country, yes, the world is mobile, but only partly. The least mobile countries are Russia, Germany and the U.S. Now where would these people like to move? Number seven is Australia, where 28 percent could imagine moving. Then France, Switzerland, Germany, Canada, U.K., and the top choice worldwide is the U.S. Now, what are the job preferences of these 200,000 people? So, what are they looking for? Out of a list of 26 topics, salary is only number eight. The top four topics are all around culture. Number four, having a great relationship with the boss; three, enjoying a great work-life balance; two, having a great relationship with colleagues; and the top priority worldwide is being appreciated for your work. So, do I get a thank you? Not only once a year with the annual bonus payment, but every day. And now, our global workforce crisis becomes very personal. People are looking for recognition. Aren't we all looking for recognition in our jobs? Now, let me connect the dots. We will face a global workforce crisis which consists of an overall labor shortage plus a huge skill mismatch, plus a big cultural challenge. And this global workforce crisis is approaching very fast. Right now, we are just at the turning point. So what can we, what can governments, what can companies do? Every company, but also every country, needs a people strategy, and to act on it immediately, and such a people strategy consists of four parts. Number one, a plan for how to forecast supply and demand for different jobs and different skills. Workforce planning will become more important than financial planning. Two, a plan for how to attract great people: generation Y, women, but also retirees. Three, a plan for how to educate and upskill them. There's a huge upskilling challenge ahead of us. And four, for how to retain the best people, or in other words, how to realize an appreciation and relationship culture. However, one crucial underlying factor is to change our attitudes. Employees are resources, are assets, not costs, not head counts, not machines, not even the Germans. Thank you. (Applause)
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Channel: TED
Views: 179,646
Rating: 4.8097825 out of 5
Keywords: TEDTalk, TEDTalks, TED Talk, TED Talks, TED, TED@BCG, TED Institute, Rainer Strack, business, global issues, productivity, work
Id: ux1GxExRUUY
Channel Id: undefined
Length: 12min 52sec (772 seconds)
Published: Wed Dec 03 2014
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