Automation Will Claim 1M South Florida Jobs, Experts Say
Job displacements will not happen through robotic rapture. Instead, shrinkage will occur through attrition and reduced hiring. Either a job will simply become obsolete or end up being performed by a software program.
BY ROB WILE, MIAMI HERAD / JULY 16, 2019
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(TNS) — Whether by bot or by byte, nearly 1 million South Florida jobs are at risk of being automated, according to a new report from consulting giant McKinsey.
But even as some jobs disappear, others will be created. And the survivors could be left better off.
McKinsey estimates that the Miami metropolitan statistical area (MSA), which includes Miami-Dade, Broward, and Palm Beach counties, will likely see about 23 percent of its total workforce displaced by automation by 2030 — or 761,000 South Florida jobs.
That matches the national rate of anticipated displacement.
Job displacements will not happen through robotic rapture. Instead, McKinsey says, shrinkage will occur through attrition and reduced hiring. Either a job will simply become obsolete or, more likely, end up being performed by a software program.
Most at risk are the area’s army of low-skilled, low-wage workers. McKinsey estimates that the occupational categories likely to see the highest quantity of job displacement in South Florida are office support (168,000), food service (106,000), and customer service and sales (100,000) jobs.
Office jobs, in particular, stand to be hardest hit, McKinsey says, based on historical trends.
“Offices once populated by armies of administrative assistants, research librarians, and payroll and data clerks now run with leaner support teams and more digital tools. Administrative assistants, bill collectors, and bookkeepers lost a combined 226,000 jobs from 2012 to 2017,” the report states.
Locally, law and finance could be most affected, according to Alfred Sanchez, president and CEO of the Greater Miami Chamber of Commerce. He says he’s been meeting with law firms who say large banks like Chase are introducing software that can read contracts— a task younger lawyers often do, he said.
“They’re saying we could have 320,000 billable hours evaporate from us tomorrow,” he said.
Younger and older workers — of which South Florida has plenty — are likely to be especially affected, McKinsey says. Among the former group, traditional entry-level positions are being eliminated, forcing younger workers to spend more time in school — or, in other cases, placing them permanently along the workforce’s margins.
Meanwhile, older job holders forced out of the workforce will have a more difficult time “re-skilling” into new, available positions.
Still, South Florida may be better positioned than other major metro areas to roll with the coming workforce revolution. McKinsey projects net job growth of 11 percent for the area — ahead of New York (10%), Los Angeles (7%) and Chicago (6%), though still behind Austin (30%), Orlando (24%), and Dallas (22%).
Nationally, McKinsey’s projections are rosiest for growth jobs it defines in the following ways: personal services for affluent individuals, healthcare for aging populations and jobs involving creativity and empathy.
Among these jobs, South Florida outperforms: McKinsey projects growth among health professionals — meaning medical professions requiring an advanced degree — climbing 51 percent. That is followed by science, engineering, and technology professionals, a category expected to grow 37 percent in the region.
Among South Florida’s three counties, this will translate to net job growth of 15.4% for Palm Beach, 10.4% for Broward, and 9.7% for Miami-Dade. And as is the case nationally, the jobs will tend to break down into either higher- or lower-paying categories — though this means a further hollowing out of the middle class.
In an interview, Ignacio Felix, a McKinsey partner, said Palm Beach is already benefiting from wealthy professionals leaving the Northeast.
“We are seeing an influx of private equity into Palm Beach, which is likely to trigger significant growth there,” he said.
Still, as a mature “megacity,” McKinsey says South Florida should not expect the same job growth being forecast for “high-growth hubs” like Austin, Dallas and Orlando.
“Any places experiencing some turnaround — there tends to be an integrated response from government, business and education leaders,” said McKinsey partner and report co-author Andre Dua. “There’s not one single playbook. Instead, it’s a question of key stakeholders coming together and committing to putting the economy on a different trajectory.”
Sanchez says that while the Greater Miami Chamber has begun to put together a response to the coming challenge, it is one with profound implications.
“It’s truly revolutionary,” he said. “In the past, technology made everything else — made jobs or labor — easier to do, so employees could be more productive. But [these technologies] are replacing the employee.”
©2019 Miami Herald. Distributed by Tribune Content Agency, LLC.
In Florida, we're looking to 3/4 of a million, to a straight up million jobs being removed. Mostly unskilled labor. Take that as you will.
Now, for a question, who is driving all this automation?
This Report Makes It Perfectly Clear Who Automation Is Working For
7/10/19 6:02pmFiled to: AUTOMATON
Illustration for article titled This Report Makes It Perfectly Clear Who Automation Is Working For
Photo: David Ramos (Getty)
If you want to get a sense of who, exactly, automation is working for right now, well, there’s a study for that. Spoiler—it’s the c-suite executives doing the automating.
A report published by the Economist Intelligence Unit (EIU)—part of the Economist Group, which separately publishes the Economist magazine—and sponsored by UIPath, “the world’s leading Robotics Process Automation” (RPA) company, asked over 500 senior executives about their impressions and attitudes about automation. The executives hailed from eight different countries and all worked at major companies, each with at least $250 million in revenue and half with over $1 billion. And guess what? The execs love automation. Just cannot sing its praises highly enough.
As UIPath notes in the headline of its release, “Automation is a C-Level priority and kickstarting businesses’ digital transformations.”
It has been widely known for quite some time that automation is a priority of the executive class—Kevin Roose’s dispatch from Davos earlier this year was a concise showcase of how the leaders of the world’s biggest firms are relentlessly pursuing automation—and now there’s some data behind the trend.
According to the study, “Eighty three percent of respondents report that the C-Suite is driving automation initiatives for their business, with automation responsibility rolling up to the CEO (22 percent), CTO (28 percent) and CIO (17 percent). Seventy percent of CEOs report that RPA and AI are a very high priority to meet their strategic objectives, mainly because it will make them more competitive.” (Emphasis mine.)
In other words, automation is very much a top-down phenomenon. I’ve reported on instances of automation unfolding more organically in the middle echelons of the companies, and of lower-level workers taking the initiative to automate parts or all of their own or their colleagues’ jobs. But the vast majority of the time, automation is plainly an executive cost-cutting and efficiency-improving strategy. And these CEOs and CTOs that are saying they need to automate to “become more competitive” are largely saying they need it to reduce payroll—perhaps because everyone else is doing it too. Even if it’s unclear in many cases that automation is actually yielding any gains for the company.
But that’s how you get findings like this: “Automation is at the center of 93 percent of businesses’ digital transformation initiatives,” the report reads. In other words, almost all the executives surveyed are choosing to prioritize automation moving forward. And here’s how these hundreds of executives of $250 million+ revenue companies chart the impact of their own automation efforts. According to them, automation yields:
-An increase in customer satisfaction (92 percent)
-Focused employee attention on less repetitive, mundane tasks (91 percent)
-Increased capacity to handle volume (91 percent)
-Efficient product and service marketing (90 percent)
-An increase in customer engagement (88 percent)
-New revenue sourcing (85 percent)
Wow—nine in 10 corporate executives say automation is absolutely fabulous! (It’s also a little odd to me that the Economist “Intelligence Unit” is publishing a study funded by the world’s self-proclaimed top purveyor of process automation wherein the conclusion is that everyone loves process automation and needs it to stay competitive, but I digress.)
Some of these may indeed be true—although I do doubt, for instance, an executives’ ability to forthrightly relay customer service satisfaction levels when independent surveys show pretty clearly that users currently hate encountering automated customer service systems. (In the report, 71 percent of the executives said that “increased automation of customer service processes will be extremely important to their firm’s competitiveness.”)
And I don’t doubt that good automation has sped up many processes and reduced drudgery in certain cases. But just compare the above findings to the general public’s feelings about automation, from this December 2018 study from Pew Research: “Around half of U.S. adults (48%) say job automation through new technology in the workplace has mostly hurt American workers, while just 22% say it has generally helped.”
Now this is not exactly apples-to-apples, but it does give us a sense of the disparity between executive optimism over automation and the more widespread worker pessimism. And it’s quite a disparity. In the Pew Research surveys, a majority of the respondents—thousands of people selected largely at random—relay fears that automation will exacerbate inequality and eliminate jobs. (“Around three-quarters of Americans (76%) say inequality between the rich and the poor would increase if robots and computers perform most of the jobs currently being done by humans by 2050.”) In the EIU/UIPath survey, the executive respondents did not “have grave fears of worker displacement by AI, although many respondents remain unsure.”
It seems the fear of losing your job to automation is more acute if you are a potential victim of automation, not its executor. Imagine that.
All told, the survey lends even more weight to the notion that I’ve been banging on about for the last couple months—that ‘robots’ don’t kill jobs, management does. It should make very clear that executives are choosing to prioritize and implement automation, even if it’s at a time that the public is overwhelmingly wary of its impact.
And for good reason! Those “digital transformation initiatives” that automation is almost always at the center of? Another recent survey of executives found that half of all respondents admitted to launching them without a clear strategy. A while back, I chatted with the CEO of Celonis, the company behind that study, and which helps companies analyze their business processes, and that was his clear diagnosis: too many companies are automating for automation’s sake.
Automation is a buzzword, a corporate imperative, an opportunity to cut labor costs—even when the technology isn’t there to fill the gaps yet—and it is being consciously, approvingly, and eagerly adopted by our corporate overlords. Those who fear that automation is fueling inequality and delivering gains to those at the top are 100 percent right—but don’t take it from me, listen to the folks at the top.
Clarification: The Economist Intelligence Unit is a business separate from the Economist magazine. Both are owned by the Economist Group. We’ve updated the copy above to clarify the distinction.
So, yeah. Executives love automation, and are looking into it, because it's pretty much net gains for them. I bet you were shocked by that one, weren't you?