The World Economic Forum (WEF) has issued a warning that the use of artificial intelligence (AI), the switch to green energy, environmental, social, and governance (ESG) standards, and slower economic growth will all significantly alter the employment landscape over the next five years.
According to WEF’s “The Future of Jobs Report 2023,” over 69 million new jobs will be created and 83 million will be destroyed by 2027, resulting in a loss of 14 million jobs, or 2% of current employment. This is a 23 percent change in employment.
In order to understand how macro and technological trends are affecting jobs and skills as well as the “workforce transformation strategies” that companies are planning on using from now and 2027, the report polled 803 companies that together employ more than 11.3 million people across 45 economies and 27 sectors.
By 2027, there will probably be about 26 million fewer people employed in clerical or secretarial roles, including bank tellers, cashiers and ticket clerks, data entry clerks, postal service clerks, and administrative and executive secretaries.
Meanwhile, employment growth is anticipated in a number of tech-related fields, including AI and machine learning, sustainability, business intelligence, information security, and fintech engineering.
According to the analysis, the three industries that would likely experience the most job growth overall are education (10%, resulting in 3 million more jobs), agriculture (30%, or 3 million more jobs), and digital commerce and trade (4 million more jobs).
The WEF identifies trends as the “leading drivers of job growth,” while economic difficulties like persistently high inflation, sluggish economic growth, and supply shortfalls pose “the greatest threat” to job formation. ESG guidelines are used by businesses in the investment decision-making process to measure sustainable and ethical impacts.
“The largest job creation and destruction effects come from environmental, technology, and economic trends. Among the macro trends listed, businesses predict the strongest net job-creation effect to be driven by investments that facilitate the green transition of businesses, the broader application of ESG standards, and supply chains becoming more localized, albeit with job growth offset by partial job displacement in each case,” according to the report.
Republican senators have consistently cautioned businesses against adopting ESG rules since doing so could reduce investment returns and impede economic growth, which could have a negative impact on the entire economy.
“Climate change adaptation and the demographic dividend in developing and emerging economies also rate high as net job creators,” the WEF report adds. “Technological advancement through increased adoption of new and frontier technologies and increased digital access are expected to drive job growth in more than half of surveyed companies, offset by expected job displacement in one-fifth of companies,” the report goes on to say.
The rising cost of living for consumers is another reason mentioned in the report that will likely threaten the employment market the most over the next five years and result in a large loss of jobs.
The COVID-19 epidemic, growing geopolitical differences, and demographic dividends in developing and emerging economies were found to be less important as forces influencing corporate evolution elsewhere, according to the WEF.
The most recent research was released shortly after Goldman Sachs economists predicted that two-thirds of American employment might be largely automated by AI, which has been increasingly popular in recent years despite concerns about its possible negative effects on society and mankind.
However, economists also pointed out that its application in industry and society could increase global GDP by nearly $7 trillion as a result of improved manufacturing and productivity, among other factors.
The WEF report states that within the next five years, roughly 75 percent of the companies polled aim to implement AI, big data, and cloud computing, which about 50 percent of the companies anticipate would result in job growth and 25 percent expect will result in job losses.
The survey also discovered that corporations believe that now, machines only complete about 34% of all business-related tasks, with people performing the remaining 66%.
According to Sander Noordende, who is the CEO of the staffing agency, Randstad, “The latest findings in the Future of Jobs Report renew calls for action from all labor market stakeholders.”
“Acceleration in digitalization, AI, and automation are creating tremendous opportunities for the global workforce, but employers, governments, and other organizations need to be ready for the disruptions ahead. By collectively offering greater skilling resources, more efficiently connecting talent to jobs, and advocating for a well-regulated labor market, we can protect and prepare workers for a more specialized and equitable future of work,” he advised.
According to CNBC, “Employment openings pulled back further in March, hitting a nearly two-year low in a sign that the ultra-tight U.S. job market is loosening and possibly putting less pressure on inflation, the Labor Department reported Tuesday.”
The department’s Job Openings and Labor Turnover Survey showed that job vacancies totaled 9.59 million for the month, down from 9.97 million in February and below the FactSet estimate for 9.64 million.
At the same time, layoffs and discharges jumped by 248,000 to just over 1.8 million, taking the rate as a share of the workforce up to 1.2% from 1%.