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- A New Future of Work: The Race to Deploy AI and Raise Skills in Europe and Beyond | McKinsey Global Institute (2024)
A New Future of Work: The Race to Deploy AI and Raise Skills in Europe and Beyond | McKinsey Global Institute (2024)
This report explores how AI, automation, and other trends will reshape labour markets in Europe and the US by 2030, driving the need for new skills and occupational transitions.
Tanguy Dulac
December 14, 2024
EMPLOYABILITY & LEARNING CULTURE
A New Future of Work: The Race to Deploy AI and Raise Skills in Europe and Beyond | McKinsey Global Institute (2024) | This report explores how AI, automation, and other trends will reshape labour markets in Europe and the US by 2030, driving the need for new skills and occupational transitions.
đź“Š DID YOU KNOW?
Did you know that, with generative AI integration, the automation of work hours for STEM professionals in Europe could increase from 13% to 27% by 2030?
đź‘€ DID YOU SEE?
Figure: Reskilling for 2030: How Companies Plan to Address the Skills Mismatch
✨ OVERVIEW
This report examines the future of work in Europe and the United States through 2030, focusing on the impact of AI, automation, and other key trends. It projects that up to 12 million occupational transitions may be needed in both regions by 2030, driven primarily by technological advancements. The analysis suggests that demand for STEM and healthcare professionals could grow significantly while office support, customer service, and production work roles may decline. The report emphasises the need for a significant skills upgrade, with increased demand for technological, social, and emotional skills. It also highlights the potential for accelerated productivity growth if countries embrace technology adoption and proactive worker redeployment.
🧩 CONTEXT
Europe and the United States face tightening labour markets and a slowdown in productivity growth. This challenging backdrop sets the stage for significant shifts in labour demand spurred by AI and automation. The advent of generative AI is expected to mark a paradigm shift, accelerating the automation potential of complex cognitive tasks. Factors such as the push for net-zero emissions, ageing demographics, and the rise of e-commerce are poised to reshape employment landscapes. These trends present opportunities for productivity growth and challenges in workforce adaptation, necessitating strategic responses from businesses and policymakers.
🔍 WHY IT MATTERS
↳ Productivity growth potential—Embracing accelerated technology adoption with proactive worker redeployment could help Europe achieve an annual productivity growth rate of up to 3% through 2030, compared to just 0.3% with slow adoption and redeployment.
↳ Massive scale of workforce transitions—By 2030, Europe could require up to 12 million occupational transitions, double the pre-pandemic pace. In the United States, required transitions could reach almost 12 million, which aligns with historical norms.
↳ Shift in skills demand—Demand for technological skills could increase by 25% in Europe and 29% in the United States by 2030, while demand for social and emotional skills could rise by 11% and 14%, respectively.
↳ Risk of labour market polarisation—Without effective redeployment and reskilling, there's a more polarised labour market, with more higher-wage jobs than workers and too many workers for existing lower-wage jobs.
↳ Net-zero transition impact—The net-zero transition could result in 3.0 million gross job displacements in Europe by 2030, offset by potential gross gains of 4.5 million to 5.0 million jobs, primarily in renewable power, construction, and electric vehicles.
đź’ˇ KEY INSIGHTS
↳ Automation potential varies across occupations—With generative AI integration, automation of work hours for STEM professionals in Europe could more than double from 13% to 27%. At the same time, for education and workforce training roles, it could triple from 6% to 21%.
↳ Geographic variations in impact—While the scale of occupational transitions is broadly similar across countries (ranging from 6.0% to 7.4% of employment), there are notable differences in the mix of occupations affected, reflecting each country's economic structure and wage levels.
↳ Healthcare demand surge—Ageing populations and increased healthcare spending are expected to significantly boost demand for healthcare-related services, with the elderly population in Europe projected to reach 94 million (18% of the overall population) by 2030.
↳ E-commerce reshaping retail employment—The continued growth of e-commerce will likely increase demand for logistics and warehousing workers while decreasing demand for in-store occupations.
↳ Skills shift—Demand for technological skills could see substantial growth in Europe and the United States (increases of 25% and 29% in hours worked by 2030 compared to 2022) under the faster midpoint scenario of automation adoption.
🚀 ACTIONS FOR LEADERS
↳ Invest in workforce reskilling—Develop comprehensive learning programmes that include formal training, on-the-job learning, and self-directed study opportunities. Ensure these programmes are accessible to all employees and align with individual career goals and organisational objectives.
↳ Embrace AI and automation strategically—Identify areas where AI and automation can enhance productivity and create new opportunities. Develop a clear strategy for technology adoption that considers both the potential benefits and the impact on the workforce.
↳ Foster adaptability and resilience—Create a culture that embraces continuous learning and adaptability. Encourage employees to develop a growth mindset, provide opportunities to acquire new skills, and take on new challenges.
↳ Prioritise social and emotional skills—Recognise the growing importance of social and emotional skills in the workplace. Invest in developing these skills among employees, particularly in roles that require high levels of empathy, leadership, and interpersonal interaction.
↳ Plan for occupational transitions—Develop strategies to support workers transitioning between occupations. This may include retraining programmes, career counselling, and partnerships with educational institutions to create pathways for workers to move into growing fields.
đź”— CONCLUSION
The future of work in Europe and the United States is poised for significant transformation, driven by technological advancements, demographic shifts, and environmental imperatives. While the scale of required occupational transitions may seem daunting, both regions have demonstrated their ability to navigate even higher labour market shifts during the COVID-19 pandemic. The key to success is embracing technological change while proactively investing in workforce development. By doing so, countries can unlock substantial productivity gains and create better societal outcomes. However, failure to act decisively could result in slower productivity growth and a more polarised labour market. As we stand at this critical juncture, the choices made today will shape the economic landscape and determine the quality of work life for millions in the years to come.
🎯 KEY TAKEAWAY
Embracing technological change and investing in workforce skills are not just options but imperatives for unlocking productivity growth and ensuring inclusive economic progress in Europe and the United States.