A future that works: automation, employment, and productivity

Advances in robotics, artificial intelligence, and machine learning are ushering in a new age of automation, as machines match or outperform human performance in a range of work activities, including ones requiring cognitive capabilities. In this report, part of the McKinsey Global Institute's ongoing research into the future of work, the authors analyze the automation potential of the global economy, the factors that will determine the pace and extent of workplace adoption, and the economic impact associated with its potential. The five factors affecting pace and extent of adoption are technical feasibility, cost of developing and deploying solutions, labour market dynamics, economic benefits, and regulatory and social acceptance.

Other key points are that: (1) automation of activities can enable businesses to improve performance by reducing errors and improving quality and speed, and in some cases, achieving outcomes that go beyond human capabilities; (2) while less than five per cent of all occupations can be automated entirely using demonstrated technologies, about 60 per cent of all occupations have at least 30 per cent of constituent activities that could be automated - more occupations will change than will be 'automated away'; (3) activities most susceptible to automation involve physical activities in highly structured and predictable environments, as well as the collection and processing of data; (4) people will need to continue working alongside machines to produce the growth in per capita [gross domestic product] GDP to which countries around the world aspire; and (5) for business, the performance benefits of automation are relatively clear, but the issues are more complicated for policy makers - encouraging investment and innovation whilst helping workers and institutions adapt to the impact on employment.

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