Study: Automation Will Change the Economy—But Not Consistently

A report from McKinsey & Company says automation will deepen a rural/urban divide, while some types of jobs—particularly, office support work—will face deeper existential threats than others.

It’s widely believed that automation will greatly affect work, including by changing the nature of jobs and eliminating lines of work entirely, but the impact will not be felt equally.

In fact, there will be big winners—and big losers.

That’s a key point that management consulting firm McKinsey & Company makes in a new report, which highlights how different industries and different locations will most strongly feel the impact of additional automation efforts.

McKinsey Global Institute’s The Future of Work in America: People and Places, Today and Tomorrow says it will manifest in multiple ways—with one key area being the urban/rural divide, which could deepen in the coming years. Already, the firm notes, large cities and nearby areas have seen much of the economic growth since the Great Recession—with “megacities” seeing 3.1 million jobs added between 2007 and 2017 and “distressed Americana” losing 332,000 jobs over the same period. Just 25 cities, the report says, are responsible for more than two thirds of the growth.

“The trends outlined in this report could widen existing disparities between high-growth cities and struggling rural areas, and between high-wage workers and everyone else,” the report said.

That said, not all the growth will be limited to megacities. Among areas expected to see growth: College towns like South Bend, Indiana; smaller towns with fast growth, like Provo, Utah; rural communities with large tourism businesses, like Aspen, Colorado; and cities with large retirement communities, like The Villages, Florida. However, it’s unlikely that people who don’t already live in a high-growth area will relocate to one—as they tend not to move, and when they move, it’s to a similar economic climate.

“For most Americans, the labor market that matters is the one where they live—and where they live increasingly affects their prospects,” the report added.

The report also said that certain specific industries will feel the impacts of these changes more than others, particularly in terms of work that tends to be more functional in nature, such as office support, food service, production work, and community services. The report warns that such tasks could shrink as much as 40 percent between now and 2030—with office support in particular expected to fall by 11 percent between 2017 and 2030.

“A common thread among shrinking roles is that they involve many routine or physical tasks,” the report said. “Because these roles are distributed across the country, no community will be immune from automation-related displacement.”

However, fields that rely on more technical, highly complex, or unique skills, such as creative arts, STEM, law, and healthcare, will likely continue to grow. Additionally, managers and educators will continue to see a growing need for their services.

The report makes the case that governments, nonprofits, and employers should take steps to help fill employment and training gaps.

“Some may need to change jobs within the same company, and employers would provide the necessary training in these situations. But many workers may need to switch employers or make even bigger moves to different occupations in new locations,” the report added. “For these workers, governments and other stakeholders can help to make local labor markets more fluid and easier to navigate.”

(alashi/DigitalVision Vectors/Getty Images Plus)

Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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