Diverging Outcomes for Labor Markets in 2023
The global labour market is experiencing divergent outcomes due to economic, health and geopolitical trends in 2023. While high-income countries are facing tight labour markets, low- and lower-middle-income countries continue to struggle with higher unemployment levels since the COVID-19 pandemic.
Moreover, workers with only basic education and women face lower employment levels, leading to real wage decline. As a result, changing worker expectations and concerns about the quality of work are becoming more prominent globally.
Overview of the Future of Jobs Survey
The World Economic Forum’s Future of Jobs Report 2023 covers a wide range of topics, geography and sectors, reflecting the perspectives of 803 companies employing more than 11.3 million workers across 27 industry clusters and 45 economies worldwide. The survey delves into macrotrends, technology trends, their impact on jobs and skills, and the workforce transformation strategies businesses plan to implement during the 2023-2027 timeframe.
Technology Adoption as a Key Driver of Business Transformation
Technology adoption will continue to be a key driver of business transformation in the next five years, with over 85% of organizations surveyed identifying increased adoption of new technologies and broadening digital access as the most likely trends to drive transformation in their organizations. The next most impactful trends are macroeconomic, including the rising cost of living and slow economic growth. Though still expected to drive the transformation of almost half of companies, the ongoing impact of the COVID-19 pandemic, increased geopolitical divisions and demographic dividends in developing and emerging economies were ranked lower as drivers of business evolution by respondents.
Job Creation and Destruction Effects from Environmental, Technology, and Economic Trends
The largest job creation and destruction effects come from environmental, technology and economic trends. Businesses predict the strongest net job-creation effect to be driven by investments that facilitate the green transition of businesses, the broader application of ESG standards and supply chains becoming more localized, albeit with job growth offset by partial job displacement in each case. Technological advancement through increased adoption of new and frontier technologies and increased digital access are expected to drive job growth in more than half of surveyed companies, offset by expected job displacement in one-fifth of companies. The three key drivers of expected net job destruction are slower economic growth, supply shortages and the rising cost of inputs, and the rising cost of living for consumers.
Technology Adoption and its Impact on Jobs
Within technology adoption, big data, cloud computing and AI feature highly on likelihood of adoption, with more than 75% of companies planning to adopt these technologies in the next five years. Digital platforms and apps are the technologies most likely to be adopted, with 86% of companies expecting to incorporate them into their operations. The second-ranked technology encompasses education and workforce technologies, with 81% of companies planning to adopt these technologies by 2027. The adoption of robots, power storage technology and distributed ledger technologies rank lower on the list.
Structural Labor Market Churn in the Next Five Years
Employers anticipate a structural labour market churn of 23% of jobs in the next five years, with higher-than-average churn in the Supply Chain and Transportation and Media, Entertainment and Sports industries, and lower-than-average churn in Manufacturing as well as Retail and Wholesale of Consumer Goods. The human-machine frontier has shifted, with organizations today estimating that 34% of all business-related tasks are performed by machines, with the remaining 66% performed by humans.
The Human-Machine Frontier Shifted at a Slower Pace Than Anticipated
The Future of Jobs Report 2023 highlights the crucial importance of businesses adapting to the rapidly changing environment, and investing in technology and workforce development to stay competitive. Additionally, the findings emphasize the need for policymakers to work with businesses to manage the impact of new technologies on labour markets, while addressing the rising costs of living and slow economic growth. Only by working together can the global economy achieve inclusive and sustainable growth.
it is clear that the impact of technology, environmental factors, and macroeconomic trends will continue to shape the labour market. The Future of Jobs Report provides valuable insights into the strategies and priorities of businesses in navigating these changes. With the emergence of new technologies and the evolving demands of consumers and stakeholders, it is crucial that companies remain agile and adaptable in their workforce transformation strategies. By prioritizing upskilling and reskilling, promoting diversity and inclusion, and embracing sustainable practices, organizations can not only weather the challenges of the future but thrive in a rapidly changing world of work.
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