New Technology Will Eliminate Millions of Jobs Worldwide

But Russia is not threatened yet, experts say.

By 2020, 2 million jobs will be added worldwide, but 7.1 million will disappear, according to The Future of Jobs, a study published recently by the World Economic Forum (WEF) on the global labor market. New jobs will appear in the intellectual and high-tech sectors, while the real sector will be curtailed slightly and administrative work will decline a lot. On the labor market, according to the researchers, two groups of factors will have an effect: the socio-demographic situation and the development of new technologies. Researchers estimate that 65% of the current first-graders many years from now will have professions that do not exist yet. The reason for this will be the widespread use of big data, cloud computing, mobile Internet and the Internet of Things (the intelligent network devices that can communicate with each other or with the external environment).

Global trends

The researchers interviewed the HR directors of 2450 companies in nine sectors of the world economy in 15 countries. They made contact with the 100 largest multinational corporations in every industry and the 50 largest national companies in every country. The majority of respondents believe that the most promising professions are in mathematics, programming and systems architecture. In the opinion of 34% of respondents, the mobile Internet and cloud computing will have the greatest impact on the labor market until 2020, 26% said the most important factor will be big data technology, 14% named the Internet of Things, 9% said the development of robotics and 6% said production automation.

The researchers asked respondents about how all these factors will affect the growth or reduction of employment in different sectors through 2020. According to the authors' estimates, big data will increase the number of jobs in the field of mathematics and computer science by 4.59% annually through 2020, and by 1.39% per year in the field of management, 1.34% in the financial sector and 1.25% in sales. But the same big data will reduce the number office staff by 6.06% per year. At the same time, the Internet of Things will lead to employment growth in computer-related occupations by 4.54% per year and specialists in drafting and engineering design by 3.54%, while reducing the employment of maintenance, repair and equipment-installation specialists by as much as 8% per year, and office workers by 6.20%. New manufacturing technology and 3D printing will have a strong effect on employment in industry, with the number of jobs being reduced by 3.60% per year and, to a much lesser extent, they will influence robotics and the development of automated transport (with a reduction of 0.83%). In general, employment will grow where data analysis and the management of complex technological processes are needed, and fall where there is a high proportion of routine, unskilled labor, the WEF report found.

Large database technology, the mobile Internet and cloud computing are already in use in Russia, experts say. For example, Uber and Yandeks.Taksi taxi services have lowered the cost of services by eliminating middlemen and have provided employment to those who want to earn a living as taxi drivers, said Andrei Shapenko, project leader at the Institute for Emerging Market Studies at Skolkovo Business School. Russian banks use robot software for trading, and big data is used in Internet companies, banks, telecommunications and e-commerce. Soon it will begin to be used for data analysis and in medicine, said Sergey Matsotsky, CEO of IBS. And Yandex founder Arkady Volozh said in an interview that he sees great opportunities for using big data in geological exploration and seismology.

A peculiarity of Russia, however, is that advanced technology is developed here only in competitive industries, said Matsotsky. In telecom, for example. "Competition is weak in engineering, so implementation of new technologies is not under discussion," he said.

Shortage of specialists

The impact of technology

2.95% ― the amount employment is increasing in the world every year thanks to big data
2.47% ― the amount employment is increasing in the world thanks to mobile Internet and cloud technologies
2.27% ― the amount employment is increasing in the world thanks to the Internet of Things
0.36% ― the amount employment is decreasing in the world thanks to industrial automation

The most obvious use of big data is analysis of the customer base and identification of the most valuable customers, experts say. But Natalia Albrecht, VimpelCom executive vice president of organizational development and human resources, said that her company has been using big data for two years to optimize the cost of opening new offices, make targeted service offers to customers and predict staff load needs — in particular, call-center operators. Big data helps to classify the staff into different groups — for example, those who like stability, and those who want to grow. The company offers each group a special incentive system. Personnel costs are reduced as a result, Albrecht said. She observed that the need for data analysts is constantly growing. To avoid a future shortage of personnel, VimpelCom has opened its own corporate Beeline data school.

Svyaznoy also began to implement big data technologies in 2014. However, according to Dmitry Malov, vice president for IT, Svyaznoy felt the shortage of data specialists immediately. In the summer of 2015, the company launched an internship program in this area for students in leading mathematical institutes. But Malov notes that analysts do not replace operating staff. For big data alone does not provide any benefits without the correctly defining business goals.

Automation slips

Automation and production robotics will have the least effect of all technological factors on employment in Russia, according to experts surveyed by Vedomosti. Large Russian companies largely automated their production in the pre-crisis period and reduced personnel by 20-30%. Now there is an especially high degree of automation in electronics, automotive, petrochemical and fertilizer production, said Pavel Lubuzh, partner in the Strategy Partners Group. Now, there is no more investment or development taking place, however. Automation is continuing mainly in state-owned companies, where new equipment is being purchased, only to be utilized at 10% of load, the expert said. At the same time, there are no staff cuts, for fear of the social consequences. "As a result, productivity is low and there is no release of personnel that might be needed in middle-sized and small businesses," Lubuzh said.

Things are even worse with automation in small enterprises, says Oleg Busygin, general director of the Intake-Consult consulting company. "Plants that I consult say imported equipment is too expensive for them and setting it up takes too much time. To avoid downtime, it is easier for the plant to hire a lot of the workers quickly for little money and to establish a new line as fast as possible," he said.

"A few years ago at a factory for the production of plastic containers, I saw at the end of a modern production line a pensioner who manually lowered every canister into a vat of water to check for leaks," says Shapenko. It turned out that salaries in the province were so low that it was more profitable for the owners of the enterprise to keep manual laborers on staff than to automate processes. "After the devaluation of the ruble, these examples only increased," he said. Today, according to some estimates, the average salary in Russian industry is lower than in China, which means there cannot be economic incentives for the reduction of manual labor. The expert said that the Russian labor market is increasingly influenced by the devaluation of the ruble and sanctions, rather than cutting-edge trends in technological development. In the medium term, he said, Russia will not escape the global trend: everything that can be automated will gradually be given over to machines and people will remain in professions that require creativity.