Automation often catches the blame for loss of jobs and unemployment. In reality, demographics could play a much larger role in contributing to unemployment and automation may actually help us solve some large, worldwide problems.
Global GDP growth over the past 50 years has been fast and lively. The GDP growth has been driven equally by employment growth and rising productivity. In present times, we are facing declining birthrates and aging populations in many advanced and emerging economies. Ultimately, this means that peak employment will occur in most countries within a 50-year window.
The expected decline in the working population will result in an economic growth gap. In other words, roughly half of the sources of economic growth from the last 50 years (employment growth) will evaporate as populations age. Even with historical rates of productivity growth, economic growth could be nearly halved.
Due to the declining working population, it will be necessary to make up a significant amount of productivity if the countries of the world are to meet their per capita GDP aspirations. Obviously, this will not be possible through employment growth.
It would seem that next wave of automation has arrived just in time. Automation represents an important opportunity to bolster global economic growth and help sustain global economic prosperity. McKinsey and Company estimate that automation has the potential to contribute meaningfully to the productivity growth necessary to meet the per capita GDP aspirations of every country.
To achieve this prosperous future, it will be necessary for everyone to keep working. The main difference will be that people and businesses will need to collaborate with robots at an unprecedented level.
