Shifting Demographics & Social Change

Demographic and social change is foundational, impacting all other trends. People’s relationship to society, community and government evolves at different rates and in different ways around the globe, but common trends still emerge. Cities continue to attract a larger percentage of the global population. “Work” is taking new forms and requiring new skill sets. The foundation is shifting.

How can we prepare ourselves?

Shifting demographics - FACTS
  • In 2018, for the first time in history, people age 65 or older outnumbered children under age 5.
     
  • Nearly 50% of workers and retirees surveyed across 15 countries in an Aegon survey believe that future generations of retirees will be worse off than those currently in retirement, compared with 18% who believe they will be better off.
     
  • By 2030, consumers in large cities, who comprise 50% of the world population, will generate 81% of global consumption and 91% of global consumption growth12
     

Preparing for the future of work

  • 18th century Rise of Industry 1.0: Steam-based machines are invented
  • 1908 Five-day workweek is born in the U.S.
  • 19th–20th century Industry 2.0: Mass production, assembly lines, electricity revolutionize work
  • 1968 Herman Miller launches cubicle concept
  • 1975 First personal computer is launched
  • 1983 Email debuts
  • Late 20th century Industry 3.0: Automation, computers, electronics refine work
  • Early 21st century Industry 4.0: AI, IT, IoT and advanced analytics redefine work & worker

 

Current events

Industry 4.0 disruption. Artificial intelligence, automation, information technology, the internet of things and advanced analytics have set the stage for substantial workforce transformation. The percentage of enterprises deploying AI solutions has nearly tripled in the past four years, and most AI early adopters believe that AI will substantially transform their industries within five years while enhancing employee job performance and satisfaction. In most occupations, at least 30% of tasks can be automated, requiring new approaches to sourcing, managing, training and retaining talent.20

Skills mismatch requires adaptable workforce. As AI and automation transform businesses and industries, the nature of job roles and the skills required to meet them change, too. As of 2015, one in four workers in OECD (Organization for Economic Co-operation and Development) countries had already reported that their skills mismatched those demanded by their jobs.21 By 2022, the core skills required to perform most roles will, on average, change by 42%.22

New talent models. The world is seeing growth in the number of people in alternative work arrangements: work done by outsourced teams, contractors, freelancers, gig workers and the crowd, in both full- and part-time capacity. Organizations looking to access critical skills are increasingly managing people under alternative forms of employment.23,24

Women in the workforce. As of 2016, 90% of 173 economies surveyed had at least one gender-based legal restriction on women’s employment and entrepreneurship.25 While conditions are improving globally, with at least 40 of these economies enacting reforms in the last four years,26 concerns persist that women are not acquiring the skills needed for the future of work – skills in professional, scientific and technical services. In many emerging economies, where large gaps remain in education and opportunity, transitioning to new occupations and skills will be even more challenging.27

Future expectations

The adoption of artificial intelligence, automation and other Industry 4.0 innovations has the potential to change work for the better, improving business operations, enabling human counterparts to make better decisions and automating tasks to free up workers to be more creative.28 However, this revolution sets the stage for substantial upheaval. Skill gaps are set to change at a faster pace and at a greater volume than ever before, leading to both talent shortages and job redundancies that displace workers.29 Businesses must lead in helping their employees make these transitions.

By 2030, 375 million workers globally and more than 30% of the workforce in the United States will need to change jobs or upgrade their skills significantly.30 Reskilling and upskilling will require more than formal training courses or programs; for many workers, reskilling happens on the job. Leaders will need to be thoughtful about how they design jobs, how they allow people to move across positions, the types of flexible career paths provided, and the psychosocial environment they create that allows workers to try, fail and grow.31 Companies will also need to focus on developing worker capabilities – contextual understanding, creativity, problem solving – rather than solely building concrete skills.32

Trends in alternative work will continue as workers seek flexibility and employers seek access to specific skills. Companies are likely to continue to expand the use of alternative workforces in functions beyond IT, such as operations, marketing, R&D, HR, sales, customer service, finance and supply chain. While most organizations currently look at alternative work arrangements as transactional, companies will need to begin viewing alternative workforce as a strategically important source of talent, developing an enterprise-wide approach to optimizing and leveraging alternative workforce sources.33

Labor needs and strategies will not be uniform across geographies. In countries with aging populations, reskilling and upskilling will be required, as will utilization of a migrant labor force of every skill level. Tapping into the aging workforce can help fill talent gaps. In countries with large youth populations, such as those in sub-Saharan Africa and Latin America, governments, nonprofits and companies will need to focus on preparing emerging youth populations for the future of work. A large percentage of work activities will be susceptible to automation; while this is moderated by low labor costs for the time being, the need to adapt to job disruption is imminent.34 Companies and governments will also need to focus on retaining skilled labor as an increasingly mobile skilled labor pool seeks work abroad.

In some respects, the COVID-19 pandemic is accelerating the future of work, with millions of people working remotely and adopting virtual collaboration tools. Economies may also see an uptick in alternative work arrangements as companies seek to hire temporary, part-time and remote workers to help them through the crisis without committing to full-time hiring in uncertain times.