The transformation of work

The nature of work and the way we work are rapidly transforming globally. In its World Development Report 2019: The changing nature of work, the World Bank says, “One of the most looming challenges is the future of work”.

Technology is increasingly becoming the key influencer for the changing nature of work. Automation, robotics and cognitive computing are among those technologies which are being inducted at the workplace. In advanced and developing economies, robots, which are replacing thousands of routine tasks, are expected to eliminate many more low-skill jobs.

Smart devices, 3D printing, Artificial Intelligence (AI), among other things, are changing the way companies design and deliver their products and services. At the same time, technology is reshaping the skills needed for work.

The future of work is being transformed by two powerful forces, namely, a growing adoption of new technologies such as AI in the workplace and the changing demographic profile of a diverse workforce, according to Peeyush Arya of Deloitte India in his article in

The World Bank report states that the premium is rising for skills that cannot be replaced by robots – general cognitive skills such as critical thinking and socio-behavioural skills (such as an aptitude for teamwork, empathy, conflict resolution and relationship management like managing and recognising emotions that enhance teamwork). Abilities such as grit have economic returns that are often as large as those associated with cognitive skills. Occupations possessing such skills have seen an increased share of employment since 2001: from 19 to 23 per cent in emerging economies and from 33 to 41 per cent in advanced economies.

Investing in human capital is the priority to make the most of this evolving economic opportunity. One of the ways in which to do this is to enable a workforce to develop skill combinations that are predictive of adaptability and reasoning and self-efficacy.

Arya further says that “Organisations are realising that tasks based on math, science and engineering can be automated or performed by robots. Hence the need for people with skills in communication, interpretation, design and synthetic thinking. In a way we can think of these as the arts, hence the evolution of education from STEM to STEAM (science, technology, engineering, arts and maths).”

The eagerness to adopt technology is indeed replacing human capital in some areas while requiring human capital to reskill itself as well as focus more on areas such as perseverance, collaboration, empathy, etc. In addition, digital technologies are enabling global platform-based businesses and these differ from the traditional production process of input and output. These digital initiatives are changing the way in which organisations find, select and hire talent.

What can be seen in companies of various sizes is a growing imbalance between the supply of people with certain skills such as digital marketing or digital strategy, and the demand for those skills. That gap is not going to be filled quickly.

What is currently required is the ability to understand the various technology implications and how these are changing the skills being rewarded in the labour markets, as also how people work. Digital technologies are giving rise to more short-term work, often via online work platforms. One of these is the creation of digital marketplaces that offer value by building digital networks, that connect customers, producers and providers. These developments are encouraging a sizeable part of the skilled workforce to enter what is being increasingly called the gig or freelance economy.

Technology is also allowing people to move from the informal sector to the formal sector – migrant workers from the informal economy moving to companies involved in app-based delivery businesses, for instance. The fact that the training process to induct them is fast encourages more workers to be taken on board. Digital platforms are thus helping expand job opportunities that are seeded in the business opportunities such platforms create.

These factors are encouraging governments to rethink and introduce policies  that manage the direction and effects of change, look at making human capital ready during the education process itself or through skill-building or upgradation, strengthening social protection measures and mobilise revenue.

There is no one definition of the gig worker. But a workforce which is highly connected and mobile is being drawn to the gig economy today.

The economist Branko Milanovic offers a unique perspective to the gig economy suggesting that it is built on the commodification of leisure time. A 2016 McKinsey & Company report found that up to 162 million people in Europe and the United States—20 to 30 per cent of whom are in the working-age population—engage in some form of independent work. On the other hand, for India, a report by EY in collaboration with the NASSCOM and FICCI, titled Future of Jobs in India: A 2022 Perspective, reveals that Indian freelancers hold 24 per cent share of the global online gig economy. India is the third largest online market.

The digital age offers flexibility in work locations. On the other hand, businesses are increasingly realising that they can benefit from an economy where they can save on resources like office space, office equipment, and overheads (e.g. training, medical and insurance benefits) through contingent workers. As a result, the meaning of the word “job” is clearly changing. One needs to adapt to new ways of working if one has to stay relevant.  And this calls for being agile. In the gig economy, co-workers will likely have many gigs over the course of their careers, which means they will have to be lifelong learners.

Globalised and automated economies put a higher premium on human capabilities that cannot be fully mimicked by machines. A more flexible future of work will redefine what it means to be an employee.

According to World Bank’s report, “The future of work will be determined by the battle between automation and innovation. In response to automation, employment in the old sector declines. In response to innovation, new sectors or tasks emerge. The overall future of employment depends on both”.