IDE research on Machines and Work wins best paper award
While most of us realize that the rapid rise of technology is having a profound impact on traditional work, new IDE research measures the actual scope and specific type of change taking place in the U.S. economy—and offers strategic guidance for employees and employers.
According to Racing With and Against the Machine: Changes in Occupational Skill Composition in an Era of Rapid Technological Advance, “many middle- and low-skill jobs have disappeared, contributing to increasing inequality, falling labor-force participation and stagnating median incomes.” The report—honored as the Best Conference Paper at the 2014 International Conference on Information Systems-- suggests ways to understand current trends and prepare the imminent disruption.
In December, MIT Sloan IDE researchers George Westerman (pictured, left) and Frank MacCrory (right), accepted the award for themselves and on behalf of fellow co-authors, IDE co-director, Erik Brynjolffson and Yousef Alhammadi from the Masdar Institute in Abu Dhabi. The ICIS conference, held in Auckland, New Zealand, December 14-17, was hosted by The University of Auckland Business School.
Many economic factors are contributing to upheavals in the workforce, yet “technology -- particularly information technology that substitutes for routine work -- is an important driver” cited in the research. Based on comprehensive data in 674 occupations, the study examines how job skills and requirements have changed as a result of automation from 2006 to 2014. For instance:
“Recently, technology has moved beyond automation to cognition, with the ability to replace or augment human skills of different types. The differential improvements in technology’s capabilities have changed the types of jobs that are threatened by automation. Formerly, laborers and factory workers were threatened, but now lawyers and journalists are. While much of the prior research on skill-biased technical change has focused on a single dimension of more- or less-skilled work, the actual effects of technology are much more varied, affecting at least five distinct dimensions of skills. Moreover, the effects vary over time, which can explain the notable changes we document between 2006 and 2014.”
For today’s employees and employers gearing up for this looming transformation means retraining and re-tooling to meet the new needs. Overall, there will be “a significant reduction in skills that compete with machines, an increase in skills that complement machines, and an increase in skills where machines (thus far) have not made great in-roads.” For example, fewer supervisors may be needed in an automated world, while deductive reasoning, problem solving, initiative and interpersonal skills are becoming more vital.
The report aims to create opportunities rather than pose threats for the future. “Researchers, managers and policymakers need to understand these changes if they are to diagnose them correctly and ultimately prescribe effective solutions,” the report concludes.
5 Key Takeaways
- The importance of “manual” skills within jobs has decreased over time.
- The importance of “perception” skills within jobs has decreased over time.
- The importance of “interpersonal” skills within jobs has increased over time.
- The importance of workers’ facility with technology has increased over time.
- Technological progress will affect the apparent complementarities among skills. That is, the pattern of correlations among the skills that are important within jobs will change over time. Flexibility is critical.