Where will the jobs of the future come from?
The consensus is that technological advances are hollowing out large chunks of the workforce, automating many positions at the low and middle-end of the skills spectrum. It happened to the bank teller. It’s happening to the check-out operator. And it could soon be happening to everyone from taxi drivers to accountants to health professionals. A new report from Citi and Oxford University reiterates an earlier prediction that 35 per cent of jobs in the UK are highly susceptible to automation.
A perverse result is that capital is becoming more important as a source of income relative to labour. In the golden post-war period, advances in technology led to rises in productivity, which in turn led to wage increases. Think of the typewriters and later the computers that allowed clerks to do their jobs faster, or the new medical equipment that has enabled doctors and nurses to offer better care. Yet today’s technological improvements are displacing labour rather than supplementing it. Productivity rises ever higher, but no longer pulls up wages along the way.
This has led many to report that ‘those who own the machines, own the future’. We should add to this anyone who owns shares, stocks, housing and other forms of assets that come under the banner of ‘capital’. People sitting on assets will be fine, but those who aren’t will either have to upskill for the remaining high quality jobs, and/or will need to begin serving people who do own the capital.
The word ‘serve’ is critical here. At some point along the consumption spectrum, buying more ‘stuff’ will cease to make the wealthy any happier. Believe it or not, the utility of housing extensions, fancy cars and designer clothing is limited. So the next frontier of the economy will be the provision of experiences rather than things. As the business strategist Nicholas Lovell argues, many businesses no longer compete on availability, price or quality. Instead they battle over whether they can make customers ‘feel something’, especially the more affluent.
The economist Tyler Cowen agrees:
‘It sounds silly, but making high earners feel better in just about every part of their lives will be a major source of job growth in the future. At some point it is hard to sell more physical stuff to high earners, yet there is usually a bit more room to make them feel better. Better about the world. Better about themselves. Better about what they have achieved.’
He goes on to unpack what this trend could mean for jobs:
‘More individuals will be employed as personal trainers, valets, private tutors, drivers, babysitters, interior designers, carpenters, and other forms of direct personal services. These are all areas where a patron – often a family or individual – expects a commission or request to be followed. “Pick up my kid from school”. “Fix the electrical wiring”. “Show up for my lesson at six o’clock”.
I agree with all this, and think that providing experiences and services to the wealthy will be an increasingly important facet of our future economy. Indeed, if you look at the fastest growing industries in the UK, high up on the list are sectors like education, ‘human health activities’, personal services, and sports activities and recreation.
But if we want to more specific, my hunch is that much of our time will be spent making older rich people feel ‘better about themselves’, to use Cowen’s phrase. Why? Because the over 40s own more than 85 per cent of financial wealth, despite making up only half of the population. Moreover, generational wealth inequality is only set to worsen – in part because of a house price boom that favours the large number of older home owners, and in part because of a political class that is too afraid to do anything other than kowtow to older voters. Witness the introduction of the incredibly regressive 65+ guaranteed growth bonds.
What all this means for the future of jobs is as yet unclear. I’m tempted to dig out the clichés and say it could mean a higher demand for cruise ship attendants, gardeners and saga holiday reps. But, if you believe the RSA's work, it could even mean a clamour for more skydiving instructors and tattooists.
Whatever happens, more of us will hankering after the silver pound.