According to scientists, half of all current jobs will become obsolete between 2020 and 2030. That is half the world’s workforce that will need to find other occupations.
On the flip side of that coin, a large portion of today’s workforce will be doing jobs that do not currently exist.
In other words, in the next decade we are going to see many jobs fall away, while at the same time we will see many new technologies that will create new opportunities and new job descriptions.
This trend is not something we are strangers to, especially if you consider that many of the most in-demand jobs today did not exist just a decade ago.
App developers are in huge demand globally, but just over 10 years ago, smartphones did not exist.
The introduction of smartphones and their rapid adoption globally created a host of new occupations, among them app development.
Similarly, big data analytics, machine-learning practice, artificial intelligence engineering and autonomous vehicle technician are jobs that didn’t exit a decade, or even five years ago, but today they are in big demand and on the rise.
Unfortunately, despite the rise of new technologies, which in turn gives rise to new jobs, there isn’t going to be a balance between the number of jobs being lost and the new jobs that are emerging.
The net result of this is that over the next few years, the global formal employment sector will decline steadily.
One of the main reasons for this is that, thanks to completely new levels of automation, which were not possible before, companies are able to streamline their operations and run more lean than ever before.
A very good example of this is the social platform Instagram. At the time the company was sold to Facebook for $1 billion (about R14bn), it employed a total of 30 people.
A couple of decades ago it was inconceivable that a billion-dollar company could run so lean.
In the past, a company of that size would typically employ hundreds, if not thousands, of people.
Yet Instagram managed to create a billion dollars of value with no more than a handful of people.
Although Instagram might be an extreme example, this trend is becoming ever more prevalent in the digital, knowledge-based economy where “information is the new oil”.
Technology companies are able to create a lot more value than their industrial predecessors with a fraction of the overheads.
Ford Motor Corporation, for example, is worth a fifth of Facebook; but the company employs 200000 people while Facebook employs just 17000 individuals – less than a tenth of Ford’s workforce.
Facebook, along with the other “big 4” tech companies, Apple, Google and Amazon, have a total market capitalisation of over $3.5trillion, but employ a fraction of people compared with their industrial counterparts.
This shouldn’t be seen as a “foreign” trend, or something that is happening only in the most industrialised nations. It is happening everywhere, including South Africa.
A classic South African example is TymeBank, the “new kid on the block” digital-only bank.
The company, which has experienced exponential growth since its launch last November, is rapidly heading towards its millionth customer.
That is a remarkable feat for a South African business, but what is more remarkable is that the bank employs just 250 people, a tiny fraction of the more traditional banks, which typically employ an excess of 50000 people.
TymeBank manages to operate with such a tiny footprint because it has leveraged the predominant digital culture and has completely embraced automation and artificial intelligence from the get-go.
It is only natural that the traditional banks begin to mimic TymeBank’s success model.
Standard Bank, for example, plans to lay off 1200 people, as it transitions into a more digital organisation.
But this is only the start. As more companies embrace technology trends and automate their processes, more people will lose their jobs.
Unfortunately, there is nothing that can be done to stymie this trend. This is the price of progress.
As we progress towards a more technologically advanced and artificial intelligence-driven world, companies are going to be able to run ever-larger operations with increasingly smaller footprints.
For the man on the street, it means that it is going to become more and more difficult to get a job.
But it’s not all bad news. If formal employment is on the decline, then entrepreneurship is on the upswing.
The barriers to entering a new business have been reduced to almost zero.
A few decades ago, starting a business required large amounts of capital, a suitable location, physical premises, lease agreements and whole host of other things. Even then, your business was confined to your physical location. Starting a business was simply out of reach for the majority of people.
Today, with nothing more than a cellphone, a data connection and an entrepreneurial flair, it is possible to start a business with a potentially global scope.
It is time we stopped focusing on employment and started focusing on entrepreneurship.