Are You Scared of Disruption?

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According to a Forrester report, robots will eliminate 6 percent of all jobs in the U.S. by 2021. The Economist’s assessment is even more expansive – they believe that within the next ten to twenty years nearly half of American jobs could become automated.

This, however, doesn’t mean that life will soon be like “The Jetsons”. As technological developments have done in the past, the next generation of robots made to utilize artificial intelligence and automation to streamline processes currently labored on with the assistance of workers will significantly alter the job market. This idea represents a form of disruptive innovation, a term that refers to when an emerging technology can utilize fewer resources to thus better compete against those without it.

The impact that automation has already had is already significant. Despite the fact that more than 5 million factory jobs since 2000 have ceased to exist, U.S. manufacturing output has increased – between 2006 and 2013 it rose by 16.7%! To determine people’s feeling about this we surveyed over 2,000 people and asked about what industries they work in, how they feel disruptions might affect their labor market, what they think they will do if directly affected, how many people understand the concept of disruptive innovation, and how will it potentially impact their jobs in coming years? Continue reading to see what we learned.

Knowledge Is Innovative Power

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Understanding what disruptive innovation is and how it might potentially affect your industry can be the difference between seeing a disruption coming (and getting out ahead of it) and possibly losing your customer base to a newer and younger competitor.

Of the 2,000 professionals polled, fewer than 40 percent were familiar with “disruptive innovation.” Disruptive innovation was coined in a 1995 issue of the Harvard Business Review; it regarded the evolution of technology in each industry. Despite Millennials living in a time where new technology is causing vast disruptions in the modern marketplace due to their purchasing decisions, almost 60 percent of survey respondents of that generation were unaware of the concept.

Gen Xers were the most familiar with the phrase (54 percent), while almost 40 percent of millennials also were in touch with the concept. However, centennials were the least familiar with disruptive innovation.

By industry, publishers were the most familiar with disruptive innovation. Perhaps because it has been facing disruption by digital competitors since the introduction of e-readers in the late ’90s, the publishing industry is one of the best modern examples of disruption today. Other industries like manufacturing (41 percent), technology (44 percent), and retail (37 percent) also reported higher levels of understanding when we asked about disruptive innovation.

Ignorance Is Innovative Bliss

final_technological_disruption_2Of those who acknowledged they were familiar with the concept of disruptive innovation, almost 48 percent were worried about the possibility of layoffs in their industry. Alternatively, of the 60 percent of respondents who said they didn’t know what disruptive innovation was, only 37 percent said layoffs concerned them.

While those unacquainted with the idea of disruptive innovation were less bothered by the idea of layoffs, that doesn’t mean they won’t happen in their markets and affect their job security or wages. The retail industry, for example, has been facing massive disruption by the rising tide of internet-based storefronts like Amazon. As a result, major retail companies instituted several rounds of major layoffs in 2016 – Credit Suisse analysts estimated that this was more than any year since 2010. Regardless of how cognizant you may be of these market trends or how these disruptive forces may occur, their impact on job security is undeniable.

Looming Disruptive Concerns

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Of those who acknowledged they were afraid of possible downsizing in their market, the publishing industry had the highest level of concern, with 50 percent of respondents telling us they were fearful of layoffs. While major layoffs in the publishing sector have already occurred, the continued trend toward digital publishing is a disruptive force that may have yet to run its course fully. Those in the retail industry (almost 49 percent) and construction (43 percent) also expressed fear of possible layoffs, perhaps because of disruptive innovations currently being developed and tested such as clerk-less stores and 3D printers capable of creating homes and commercial buildings.

The least concerned respondents worked in real estate, where less than 22 percent were concerned about layoffs. While real estate may seem like an industry that requires a human touch, certain research suggests artificial intelligence will definitely reduce the number of them and could eventually even replace traditional real estate agents and brokers.

Already, artificial intelligence can automate house hunting processes. Consumers enter specific parameters into a computer (like location, budget, and preferences) and receive hundreds of recommended listings that match their request – largely for free and without having to set up a meeting and time to view!

Respondents who felt layoffs would most impact them were temporary employees (60 percent). Fifty-six percent of consultants and 53 percent of junior managers also admitted concerns about layoffs. Upper management, trained professionals, and administrative staff were the least concerned. Despite their cavalier attitude to being replaced, the 2016 Economic Report of the President to Congress offers a more dire assessment – those in the $40 an hour wage range face a 31% chance of job loss due to automation.

Disruptive Innovation: For Better or Worse

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When we asked survey respondents how they thought disruption might affect them, over 38 percent said it might cost them their jobs. Considering that almost half of those who understood disruptive innovation were concerned about layoffs, the fear of losing their job may come from a better understanding of the shifting marketplace.

Despite evidence to the contrary, 37 percent of participants didn’t think disruption would affect them at all, while almost 17 percent thought disruption might make their jobs easier. Additionally, around 4 percent were convinced their job would get easier, or they would be let go.

Professionals in publishing, retail, and insurance were more likely to believe disruption might cost them their jobs, while respondents in real estate and government believed disruption and the rising popularity of automated processes might ultimately make their jobs easier in the long run.

Anticipating Disruptive Innovation

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The rise of artificial intelligence new technologies are already causing disruptions to governments around the world. No surprise then that 35 percent of those in the field anticipate that major changes will come because of the internet. Speaking about the private sector, renowned physicist Stephen Hawking believes the advancements within artificial intelligence are a legitimate concern, one that could lead to many middle-class jobs disappearing from the workforce. Every job role, outside of those who are self-employed, generally feels the same way regardless of industry.

Automation – or tasks being completed without the need for, or with minimal input from, humans – is the next largest concern in most industries. It’s the leading technology concern within the retail field. Malls and shopping arenas that have failed to adapt to e-commerce are already seeing this play out with increased vacancies. Experience is one of the differentiators that automation, at least yet, hasn’t cracked.

Life After Disruptive Innovation

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If men and women are displaced due to disruption, they plan to seek a new job in either the same industry or a different industry. Men were more likely to find a job in their current field (44 percent), while women were more likely to find a job in a different industry (45 percent). While some men (14 percent) and women (18 percent) would pursue additional education, it doesn’t seem to be the first choice for either gender.

Age also plays a factor in what respondents would do. Centennials (57 percent) and millennials (nearly 42 percent) would opt to find a new job within their current field – with the former being more likely to hit the books and seek additional education (19 percent). Over 30 percent of baby boomers would consider hanging up the “employed” status for good, choosing to retire instead of looking for another job.

Ahead of the Tech Curve

Artificial intelligence, digitization and automation have already created a disruption in long-standing industries and societies and will continue to do so. The first and second industrial revolutions were periods of vast societal upheaval due to the way that they transformed the nature of labor. Disruptive innovation in this Third Industrial Revolution – with the new ability of computers to reduce communication time, complete tasks and transform an ever evolving number of data input into systems of pure information that can then be reorganized into vast interactive networks that function akin to complex ecosystems – will be equally historic and important.

What the future holds for the professionals who work in various fields – is still uncertain and those informed about it will be at an advantage in how to respond to new tech developments. For those who understand disruptive innovation, almost half are concerned about downsizing and layoffs. However even those that aren’t going to be be replaced in the immediate future will be impacted by others’ jobs being automated. More unemployed people often translates to a depressionary effect on the wages of those employed. To address this and other effect The Wall Street Journal has endorsed a guaranteed minimum income in the United States while countries like Switzerland and Finland are considering similar measures.

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Methodology

Members of creative and research teams coordinated in the construction and distribution of a survey that had over two thousand people respond regarding their knowledge of creative disruption and how it would affect them.

Sources

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Michael ShearerAre You Scared of Disruption?