The Time for Retraining Is Now
R. Edward Freeman is a professor of strategy, ethics, and entrepreneurship at the Darden School of Business at the University of Virginia. He tweets @re_freeman. James R. Freeland is the Sponsors Professor of Business Administration in the technology and operations area at Darden School of Business.
None of us know how our technological future will unfold. Just within the last few months, we learned that Amazon Go will be opening more cashier-less, no-salesperson stores and that a burger chain has “employed” a robot to flip its burgers. At the same time, Uber has put on hold its use of self-driving vehicles after a fatal accident in Arizona. The times are a-changing, and the robots are here. As we develop more sophisticated artificial intelligence (AI) problem-solving approaches, we know that the employment landscape will be changing rapidly.
We also don’t know whether the doom and gloom pundits are correct or not. Bain claimed in a February 2018 study that automation may eliminate 20% to 25% of jobs in the U.S. by 2030. A U.K. study put the estimate much higher — it predicted that as many as 47% of current U.S. jobs could be made redundant or irrelevant in a short time frame. And a November 2017 McKinsey Global Institute report suggested that by 2030, as many as 375 million workers around the world may need to switch occupational categories — that’s a full 14% of the global workforce.
Others tell us that the situation is not so dire. New technology, they say, has always turned out to be a net job creator over time, despite predictions about job elimination.
But even if the more optimist prospects are true, will the prosperity created by these new jobs be shared broadly? And what do we need to do to be prepared?
We Need to Prepare for Different Skill Sets
Whatever the net increase or decrease in jobs overall, what is not at issue is that these will be different jobs, requiring different skill sets.
Rather than wait to see the answer about whether more jobs will be lost or be gained, we need to act now to enable current employers and employees to gain the skills they are going to need in the brave new world of AI technology. Let’s look at some examples of what is currently being done.
1. Technology companies are helping train young adults. IBM has designed Pathways in Technology (P-TECH) schools, partnering with almost 100 public high schools and community colleges to create a six-year program that serves large numbers of low-income students. The skills learned are reinforced through mentorships and internships with IBM and many other companies. Graduate rates are four times the average, and those getting jobs are at two times the median salary.
2. Technology companies are helping retrain existing employees. Bit Source LLC, a software development company based in Pikeville, Kentucky, is training Kentucky coal miners to become software developers. The company’s aim is to move workers from “exporting coal to exporting code.” The wind technology company, Goldwind Americas, a subsidiary of Xinjiang Goldwind Science & Technology Co. Ltd., based in Beijing, China, launched Goldwind Works to retrain employees from coal, oil, and natural gas in Wyoming to become wind turbine technicians, a category expected to grow over 100% in the next few years. And Flexport Inc., a San Francisco-based freight company, developed an initiative to train incoming workers to work in the digital age in shipping logistics, where it has been able to compete with much larger companies. Currently these programs are small, but they illustrate what can be done.
3. Technology companies are providing new and broader digital education to their own workers. Cognizant Technology Solutions Corp., an IT company based in Teaneck, New Jersey, with over 250,000 employees, recently retrained over 100,000 in new digital skills. Given the variety of digital skill sets, ongoing training is seen as a prerequisite for company success. The company says it sees retraining as going together with managing attrition and automating key processes. Similarly, when communications giant AT&T Inc. discovered that over 100,000 of its employees were in jobs that wouldn’t be around in 10 years or less, it committed to a massive retraining effort. AT&T’s Workforce 2020 uses both partnerships with traditional degree-granting universities such as Georgia Tech as well as course bundles of massive open online courses (MOOCs) to grant “Nanodegrees” to courses, mostly online, that can be individualized with certifiable skills. In the words of one executive, “AT&T is working to instill a mindset in which each individual becomes CEO of his or her own career, empowered to seek out new skills, roles, and experiences.”
Governments are getting in on the act, too. Tennessee recently made community colleges free for adults without a degree starting in the fall semester of 2018. Oregon has free community college for all high school graduates, including those with GEDs. San Francisco has made community colleges free for all of its residents. The State of New York has made both two- and four-year public colleges free for students with families who earn less than $ 125,000.
Other countries are moving in the same direction. A World Economic Forum White Paper presents examples from Singapore, Denmark, the U.K., and Brazil of how governments in other countries are getting involved in providing resources for retraining and lifelong learning.
Four Suggestions for Learning in the AI-Powered Future
There are many more examples of how companies and governments are tackling this problem. But we need more.
We want to make four suggestions for retraining and lifelong learning as we move into this new digital, AI-powered age.
First, we need to see the role of governments, at least partially, as facilitating value creation. Traditionally, government has been seen as referee, regulator, and redistributor. These are important roles. However, helping businesses, both for-profit and nonprofit, facilitate the value creation they do so well is also a legitimate role. The government examples above are good illustrations of that point. Facilitating lifelong learning helps companies find employees who can create value for their stakeholders and improve the economy and society.
Second, we need to become a nation, and indeed a world, of entrepreneurs. The trend of fewer startups and fewer workers in startups must be reversed. We need entrepreneurship that will create more opportunities for new businesses. We need to ask what governments can do to facilitate the entrepreneurial spirit. We need a massive effort to help people who have been shut out of the value creation system to get the skills and the capital they need to start and grow businesses. We believe that this effort needs to be focused locally and started in elementary schools where we teach kids that creating value for others is what business is really about. And we need to encourage their ideas, even at that age, for how to do it.
Third, we need to become a nation of experimenters. “One size fits all” programs generally do not work for many people. We need to try lots of things that will provide new marketable skills and mindsets for learning, figure out how to keep what works, spread the news, and stop doing those things that don’t work. We need experiments that use evidence-based results to understand what is scalable. The Equality of Opportunity Project directed by academics from Stanford University, Brown University, and Harvard University is an excellent example of the kind of research that can make a difference. AT&T’s approach won’t work for all businesses, and Denmark’s system won’t work in all countries. The locus of action must be local, even though we will need organizations with a more national and global focus to spread the good ideas.
Finally, we need to encourage lifelong learning, especially for those at the lowest rung of the economic ladder. Many people are far from using the resources of MOOCs, the web, and other available technologies. Why not open our public schools to lifelong learning, where courses could be taught in the evening, and everyone could get certifiable skills? Local companies could contribute as part of their mission to be community builders. Local governments and companies could help with any funding that would be necessary. Many citizens could become teachers and mentors.
We have only scratched the surface of what needs to be done. There is an urgency to get started now and build on the set of experiments that are currently going on. We must engage in this effort.
We want to be the ones in charge of our own future — let’s not leave it to the robots and AI.