Technology’s impact on Labor Market

James Manyika analyses the report of McKinsey Global Institute (MGI) and its impact on the Labor Market.

Digital America: A tale of the haves and have-mores, a new report from the McKinsey Global Institute (MGI), highlights the enormous gap as the leading sectors, companies, and individuals deploy technology in a way that leaves everyone else in the dust. The companies leading the charge are capturing market share, posting record profit growth, and even reshaping entire industries. Their competitors, by contrast, are struggling just to keep up. Workers with the most sophisticated digital skills are in high demand, and those in the most digitized industries enjoy wage growth that is twice the national average. But incomes have stagnated for the majority of US workers in other sectors.

There are huge opportunities ahead, but unsettling shifts could hit the labor market as digital technologies develop capabilities to automate more of the tasks humans are paid to do. You should check out the labor posters that should be in a common room. MGI research found that some 60 percent of occupations could have 30 percent or more of their activities automated. We estimate that automation could displace anywhere from 10 to 15 percent of US middle-skill jobs in the decade ahead.

As companies integrate these technologies, they will redefine roles and business processes. The United States will need to adapt its institutions and training pathways to help workers cope. While technology is causing this disruption, it can be part of the solution, too. Online talent platforms might be one of the keys to creating a labor market that can respond more dynamically to continually changing demand for new skills.

Companies, too, face more churn as digitization changes the dynamics in many industries. These shifts are empowering for entrepreneurs but anxiety-producing for established companies. The standard for what it means to be highly digitized today will be outdated tomorrow––and the digital leaders never stop streamlining and innovating.

For companies, this is a wake-up call. No organization can afford to sit still while industries transform around it.

This article originally ran in LinkedIn.

Trends shaping the Auto Industry

Paul Gao, Hans-Werner Kaas, Detlev Mohr, and Dominik Wee look at the trends shaping the auto industry.

Today’s economies are dramatically changing, triggered by development in emerging markets, the accelerated rise of new technologies, sustainability policies, and changing consumer preferences around ownership. Digitization, increasing automation, and new business models have revolutionized other industries, and automotive will be no exception. These forces are giving rise to four disruptive technology-driven trends in the automotive sector: diverse mobility, autonomous driving, electrification, and connectivity.

1. Driven by shared mobility, connectivity services, and feature upgrades, new business models could expand automotive revenue pools by about 30 percent, adding up to $1.5 trillion.

2. Despite a shift toward shared mobility, vehicle unit sales will continue to grow, but likely at a lower rate of about 2 percent per year.

3. Consumer mobility behavior is changing, leading to up to one out of ten cars sold in 2030 potentially being a shared vehicle and the subsequent rise of a market for fit-for-purpose mobility solutions.

4. City type will replace country or region as the most relevant segmentation dimension that determines mobility behavior and, thus, the speed and scope of the automotive revolution.

5. Once technological and regulatory issues have been resolved, up to 15 percent of new cars sold in 2030 could be fully autonomous.

6. Electrified vehicles are becoming viable and competitive; however, the speed of their adoption will vary strongly at the local level.

7. Within a more complex and diversified mobility-industry landscape, incumbent players will be forced to compete simultaneously on multiple fronts and cooperate with competitors.

8. New market entrants are expected to target initially only specific, economically attractive segments and activities along the value chain before potentially exploring further fields.

Automotive incumbents cannot predict the future of the industry with certainty. They can, however, make strategic moves now to shape the industry’s evolution. To get ahead of the inevitable disruption, incumbent players need to implement a four-pronged strategic approach:

Prepare for uncertainty.

Leverage partnerships.

Drive transformational change.

Reshape the value proposition.

Source:Auto Industry