The Future of Skills

Predicting the future of employment has itself been a booming growth sector in recent years, with analyses often designed to guide public sector and business investment and training policies. But we believe ours is the most comprehensive and methodologically ambitious to date.

We have developed a novel methodology for predicting the demand for work and skills in the US and UK economies in 2030, one that combines the expertise of humans with the power of machine learning. This enables us to forecast quantifiable directional predictions for occupation growth. In addition, we have identified the skills, knowledge types, and abilities that will be most likely experience growth and decline. Importantly we have grounded the analysis in structural change likely to affect US and UK labor markets in the coming years.

One of the exciting things about this research is that it allows us to think about the occupations which may emerge in the future in response to the drivers of labor market change considered in the research. The model allows us to identify hypothetical occupations that are 'almost certain' to experience an increase in workforce share and the combination of skills that are most associated with it.

The following example workers demonstrate these hypothetical occupations identified from the model - four for the US and two for the UK. In the full report, we look at the occupations existing today that are 'closest' to these hypothetical occupations in order to understand more about them.

Our future workers help to show how the future of work could bring new opportunities and create new challenges. Each worker's profile shows their hypothetical occupation, that has been identified by our model, and the skills, knowledge and abilities features that are associated with their job.

After finishing school Faisal had to support his elderly parents, navigating care offers and supporting them emotionally. Through a government supported vocational course in health and social care he built on this experience to become a certified personal care assistant. While key skills requirements have not changed much over the past 15 years, the tools and scope of the job have . He is not just a care assistant: he is a cook, a dog walker, a cleaner, a companion, a health and wellbeing monitoring assistant and sometimes the first responder in case of emergencies.

The care profession has continued to boom, in part because robots do not possess the traits which make humans good carers such as compassion, humour, patience and flexibility; however, pay, working conditions and the status of the profession have not necessarily kept pace. To differentiate his services, Faisal performs a number of technical tasks. A preference for ageing at home means that one of his first roles is helping clients to physically adapt their homes, decide on what kinds of home assistive technology systems they will need and how that data will be used.

This includes giving advice on wearable technology to measure blood pressure, blood-glucose and sleep patterns for which Faisal has taken advantage of free training in biology. This information is available to him 24/7, helping catch potential issues before they lead to a hospital trip but equally, if not more importantly, it frees him to spend more time as a companion during home visits.

Faisal is also increasingly finding supplemental work outside of elderly care. A wider industry has risen up demanding many of the same skills to support working families manage their homes and lives. He does this on a freelance basis for the more well off families of the older clients he has come to know but is also exploring other opportunities.

Lisa has worked in the construction industry for almost 20 years now. Entering the workforce during the Great Recession of 2007-09, she saw that green construction was one of the few segments which proved resilient to the slump in the construction market. After completing an apprenticeship program, demand for her services grew -initially in the commercial space but subsequently in the residential and industrial markets. The promise of lower costs, coupled with the ambition of some states for new homes to be net zero energy was an important catalyst for this growth as was the growing association of green homes with healthier living by consumers. While federal environmental regulation has made planning difficult at times, third-party standards such as the Leadership in Energy and Environmental Design (LEED) have helped spread awareness and trust in the marketplace.

A substantial part of Lisa's work has involved remodelling and refurbishment projects -from fitting water-efficient appliances, such as dual-flush toilets, or systems which reuse grey water to installing roofs with solar photovoltaic panels and even vegetation. Gig work, already prevalent in the construction industry, has become even more important, putting a high premium on strong administration and management. These skills have enabled Lisa to deliver a closer integration of subcontractors and the supply chain, resulting in reduced waste and performance improvements. Other nontechnical skills such as customer and personal service have been helpful in supporting and often pushing clients to take a long-term view of their 'green' investment.

Due to robust demand for green construction, labour shortages have emerged. The industry has not been able to shake off the reputation as physically dangerous, cyclical and low on job security. To encourage entry into the field, Lisa, who now runs a small company, has expanded the number of apprenticeships on offer, supported by government grants. She also serves as a local construction ambassador, visiting schools and attending careers fairs to give young people a real life perspective of what it is like to work in the industry.

Julia has always had an interest in science thanks to plenty of hands-on experiences in and outside school, though she really credits her secondary school chemistry teacher for giving her the confidence to pursue a career in the sciences. She chose to study Materials Science Engineering at University and had the opportunity to do work experience in two newer sectors where companies are keen to attract talent; bio-engineering and small-scale, custom manufacturing.

Julia's main interest, however, lies in aerospace. Additive manufacturing has had a considerable impact on the sector, reducing the cost and weight of aircraft structures. It calls for a better understanding of how bulk properties are created and affected by these new production techniques since materials are synthesised at the same time as aircraft parts. There is plenty of space for exploration for material engineers, especially as additive manufacturing opens the door to new forms of biomimicry, the borrowing of ideas from nature -everything from the sweeping curved shape of a bird's skeleton to the riblets on a shark's skin- to inform technological development,

This, however, is not the only reason Julia is attracted to the job. Arguably the biggest impact of new materials and manufacturing processes has been to bring design and manufacturing closer together. As there is a much wider design space to roam, designers, material engineers, system modellers and production workers benefit much more from iterating and exchanging skills, practices and knowledge. Julia's company recently announced that it would be reshoring some production capabilities and investing in the surrounding industrial ecosystem to exploit these synergies further.

Julia thrives in such an environment, communicating ideas and working across diverse teams. She particularly likes the idea that while she remains first and foremost a materials engineer, she is also actively helping shape the design of aircraft which she'll one day get to see in the sky.

After losing his job as a newspaper journalist, Amit switched careers and retrained as a community college teacher. His background in communications stood him in good stead when teaching increasingly important skills such as collaborative problem-solving and interpersonal skills. He was struck by the growing number of mature students who wanted and needed to re-skill in response to transitions in their lives. In particular, these changes were causing some students anxiety as they perceived education as a young person's game. He found that skills he had honed over the years as a journalist and then teacher such as social perceptiveness and the ability to convey complex ideas in an understandable way were very useful in advising mature students.

Amit recognised that this was only the tip of the iceberg: longer healthier lives and changes to pension age and the notion of retirement were disrupting the classic three stage view of life; education, work and then retirement. In its place is a set of unsettled questions: How can individuals develop productive assets when most education occurs in their 20s? How can they protect the value of these assets over the next 60 years against a backdrop of profound structural change? How can they balance the financial need for an extended working life against other important goals, such as family, health and friendships?

Some individuals have seized the opportunities presented by these questions to explore who they are and how they want to lead their lives; however, others have found them overwhelming, anxious they might make the wrong choices or break social taboos. Amit began to work with these individuals - helping them to imagine possible future selves and think through their implications for sequencing a multi-staged life. Sanjay has taken self-directed training courses in applied philosophy and ethics as well as reflective practices to enrich the advice that he is able to give to clients.

This support has extended to end of life issues which remain among the most traumatic events that individuals and loved ones face. The old adage that there are no atheists in foxholes may be an exaggeration but Amit has discovered that the search for meaning or purpose or value, remains central to many individuals. This is especially true as the increasingly complex and technical aspects of healthcare have narrowed what services are available. Amit is proud that his work has gone some way to filling this gap.

Wilson studied fine arts mixed media at university. This provided an environment in which Wilson developed an awareness of the diversity of media and media practices. By the end of his studies, Wilson was convinced that some of the most exciting developments in culture lay in digital technology. He enrolled on a 12-week course at a bootcamp where he deepened his knowledge of 3D design software for modelling, animation and rendering. Wilson chose this training pathway over postgraduate work as it focussed on the specific tools that he would be using in industry and exposed him to how projects worked in practice.

The games industry was an early adopter of virtual reality (VR) and Wilson quickly found a job with a small developer creating alien landscapes. As with any new technology there were growing pains. The holy grail of VR gaming, at that time, was designing an authentic first-person shooter (FPS) which permitted aiming and freedom of movement without causing motion sickness. A solution eluded Wilson's design team, though it provided him with a stream of challenges on which to cut his teeth and learn by doing at a time when industry knowledge was too fragmentary and constantly changing to be standardised.

As virtual, augmented and mixed reality technologies entered the mainstream, so industries such as healthcare, tourism and sports to education and manufacturing began to seek workers with Wilson's skills. Wilson was approached by a number of recruiters, though an old friend from art school convinced him to join his e-commerce start-up which was using new technologies to enhance shopping experiences and reduce the guesswork that accompanied buying new products. To this end, Wilson took a series of accredited online courses in sales and marketing which gave him an insight into how consumers make decisions and how to manage that journey from a behavioral and creative perspective.

After several years Wilson joined an education company which he believed was a natural home for his skills. Immersive experience technologies provided a way to teach complex concepts visually and motivate users who otherwise struggled with traditional learning methods. Wilson is very excited about the future -not only about the possibilities for these tools in STEM subjects where learners can interact with computer-generated objects but also in fields such as literature, history and economics. For example, a soon-to-be-launched product transports students to the mills of nineteenth-century Manchester as they read about the demand for social reform, an experience which Wilson hopes will give them a deeper connection and understanding of the beliefs, goals and values of their ancestors and other historical actors.

Mel has owned her own restaurant for many years and worked in the catering industry for even longer. The convergence of new technology and changing demographics, however, has dramatically shifted when, why and how people go out to eat as well as their relationship with food. More and more people, especially the elderly live alone and are opting to eat takeaways at home rather than go out. And many of them are not content with a greasy pizza in a crumpled box but expect greater variety and quality.

Mel felt that this delivery model had commercial promise in the higher end of the market. To make food exclusively for delivery, however, required an overhaul of the restaurant's service and operations. Mel brought considerable judgement and decision-making skills to bear on this task. She implemented a real-time dispatch algorithm to track riders and orders and identify which rider was best placed to fulfill the order. This slashed the restaurant's delivery times and allowed it to serve customers that other competitors could not reach without compromising food quality. In turn, this data was used to analyze customer preferences to keep menus fresh and profitable.

This asset-light business model allowed Mel to trial new recipes without severe or lasting penalties. Ideas could be terminated and Mel could move on without sinking substantial resources. Despite the appetite for food delivery, Mel came to the conclusion that the restaurant was still a viable proposition; it just had to be reimagined to appeal to a growing number of consumers who were turning their backs on big ticket items and seeking out experiences that could create a longer lasting sense of fulfillment.

Mel reached out to a number of contacts she knew from her earlier catering career for inspiration. As with other forms of creative endeavour, this involved people from different disciplines -everyone from designers and anthropologists to performance artists and experimental chefs. In Mel's view, having smart people was as, if not more, important than having good ideas. Her role was to listen and try to understand the thinking behind each suggestion and turn them into a coherent vision and clear instructions that her staff could implement.

Thanks to this collaboration, Mel has created a very successful series of experiential dining events. She has done away with the traditional separation between dining room and kitchen. Upon entering the restaurant, guests instantly smell what's cooking for that evening's dinner. They are also invited into the kitchen among the pots and pans where the chefs share stories and give bespoke cooking tips. Guests are occasionally asked before hand to reveal something personal that evokes a culinary memory. This is then incorporated into each guest's meal. Mel hopes to branch out into food tourism which she believes is the next step for those who want to understand the producer-to-plate story while aligning themselves with values, such as sustainability and local production.

With peer-to-peer platforms, activities are amenable to decentralized production, unlocking previously unused or underused assets - in the process muddying traditional definitions of ownership and employment. Additive manufacturing and 3D printing could alter the economics of many industries, cutting the costs of on-demand production.

Material and life sciences have seen major breakthroughs in areas such as graphene and gene-editing with potentially radical applications, though many must contend with a long road to commercialization and significant barriers to adoption, especially ethical and safety concerns.

There remains an unresolved tension between the seeming ubiquity of digital technology and a downshift in measured productivity growth. Evidence from a wide range of industries, products and firms also suggests that research effort is rising steeply while research productivity is falling sharply - that is, more and more resources are being allocated to R&D in order to maintain constant growth.

History shows that technology optimism can slide into determinism, though there is a mirror image of this logic: people tend to underestimate the huge effects of technology over the long-term. The general pattern of technological progress has been one of multiple lulls, followed by subsequent surges of creativity. For instance, new materials and processes, leveraging digital tools that allow improved real-time measurement, experimentation and replication, are inherently complementary such that advances in one domain may feed back into new technologies in a virtuous cycle.

Over the past three decades, labor markets around the world have become increasingly integrated. The emergence of countries like China and India, for centuries economic laggards, has delivered an immense supply shock to traditional patterns of trade.

Globalization has not only had benefits but also costs. Employment and wages have typically fallen in industries more exposed to import competition, exacerbated by labor market frictions and social and financial commitments such as home ownership, which limit workers' ability to relocate and take advantage of employment opportunities. US and UK exports to other countries have not grown as much as imports, though large trade deficits have not reduced jobs so much as redistributed them towards nontradables, particularly construction.

The manufacturing sector has been a lightning rod for these changes, though the experience has not been uniform, containing pockets of activity that have thrived - whether because the gains from keeping production at home remain critical or head-to-head competition with emerging economies is limited. Combined with eroding cost advantages among competitors and new technologies, including breakthroughs in shale oil extraction, these conditions could support modest forms of reshoring.

As the economic centre of gravity shifts towards the emerging world, supported by a burgeoning middle class, so opportunities may open up in areas such as knowledge-intensive services and advanced manufacturing where UK and US exporters enjoy a comparative advantage.

However, a number of developments may frustrate this trend. Services are still substantially less likely to be traded than manufactured products due to the prevalence of non-tariff barriers. Emerging markets face various obstacles in sustaining their historic growth rates, ranging from the prospect of premature deindustrialization to the task of building high-quality institutions. Sluggish world trade growth since the financial crisis and stiffening protectionist sentiment have challenged the decades-old rule of thumb that trade grows faster than GDP, raising concerns that globalization has structurally 'peaked'.

There is an obvious appeal to basing predictions on population growth and changes to the composition of the population: given long-run historical trends, it is possible to make grounded assessments about where they are likely to go, and at what speed.

The global economy has passed an important demographic threshold: dependency ratios - the ratio of non-working age population to working age population - have begun to rise after nearly half a century of declines. With labor inputs slowing in advanced economies, the importance of productivity in driving overall growth and policy in boosting labour force participation has increased. This is especially true in the US where prime-aged women and particularly men have been withdrawing from the labor market over a long period.

Countries are coming under fiscal pressure to control age-related entitlements which could draw resources away from education, R&D and infrastructure, especially as older households vote more actively than younger cohorts.

How an aging population chooses to put its purchasing power to work will have a significant impact on the fortunes of different industries and occupations. This is likely to benefit not only healthcare, finance and housing but also recreation and education which have traditionally catered to the young.

Millennials - the cohort born between 1980 and 2000 - are poised to grow in influence as they inherit the assets of their parents. They are the first group to come of age after the arrival of digital technology, bringing with them heightened expectations of immediacy, participation and transparency. At the same time many became economically active in the shadow of the Great Recession which may have tempered attitudes to risk and confidence in major institutions. As a result, this group exhibits quite different consumption and work behaviours compared with previous generations.

A striking development over the past decade has been the growing consensus around manmade global warming. The scale of the challenge is enormous: to keep the rise in average global temperatures to below 2*C - the de facto target for global policy - cumulative CO2 emissions need to be capped at one trillion metric tons above the levels of the late 1800s. The global economy has already produced half of that amount.

Climate change has wide-ranging consequences for many industries. Agriculture, tourism, insurance, forestry, water, infrastructure and energy will all be directly affected, though linkages with socio-economic and technological systems mean that risks can accumulate, propagate and culminate in even larger impacts. For example, climate change could threaten food and resource security in parts of the world which may in turn make poverty and conflict more likely.

Meeting emissions reduction targets requires investment in green technologies, including LED lighting, electric vehicles, solar photovoltaic systems and onshore wind and more sophisticated forms of energy efficiency - which will also create opportunities for green finance. Despite plummeting costs for 'clean' solutions, there are a number of reasons why 'dirty' technologies are likely to hold sway, including political lock-in and high switching costs. Views differ as to the optimal dynamic strategy to be followed in such a scenario.

Evidence for the broader jobs potential of the green economy is also ambiguous. Structural changes associated with the green economy are fundamentally dependent on government policy. The number of supportive regulations has grown across the world, though initiatives are likely to be set nationally rather than multilaterally, remain tied to specific sectors and technologies and be vulnerable to political reversals.

Today, over half of the world's population lives in cities, a number that is expected to grow to 70% by 2050. This concentration of humanity illustrates the basic unevenness of economic development - the tendency for places close to large markets to grow more rapidly than places more distant.

Cities are magnets for high-value, knowledge-intensive industries, where physical proximity enables collaboration and firms and workers benefit from enhanced labor pooling and matching. Urban planners increasingly build these features into the fabric of cities through the establishment of innovation districts that integrate work, housing and recreation.

Cities also offer more varied consumption and employment opportunities, though medical conditions such as obesity, diabetes and depression have been linked to aspects of the urban environment. Pressures on affordable housing may lock some households out of these opportunities, forcing them to live in older suburbs or low-income areas tethered to declining industries.

There has been an increasing push for authorities to make cities 'smarter' - leveraging the information generated by infrastructure to optimize performance. This agenda has also come to focus on sustainability, resilience and making cities more age-friendly. However, in many advanced economies infrastructure investment as a proportion of total government expenditure has been trending downwards for decades, with serious questions around the quality of existing infrastructure. A major uncertainty is how debates about the role of fiscal policy and government activism will resolve themselves against a backdrop of high public debt ratios.

The sharp rise in income and wealth inequality has been described as the "defining challenge of our times". This has been accompanied by a squeeze on the middle class, as the distribution of income has shifted towards the higher and lower ends of the distribution. Countries with higher levels of income inequality tend to have lower levels of mobility between generations.

Economic distress and the erosion in opportunities for people with low education have, in turn, created a web of social issues, including rising mortality and morbidity among segments of the U.S. population. They have also fuelled resentment of elites and the appeal of populist ideas.

The macroeconomic relationship between inequality and growth remains contested - though recent studies have tended to highlight the costs of rising inequality, particularly over longer time horizons. Income inequality and associated phenomena also have sectoral consequences. They contribute to greater health and social problems, raising the demand for healthcare and social services. Employment in occupations dedicated to protecting property rights and managing conflict is typically larger in countries with unequal distributions of income. Finally they translate into disparities in consumption, particularly of non-durables and services such as education.

A number of factors have driven higher inequality, including the impact of technology and globalization, failings of the educational system, anticompetitive practices, weaknesses in corporate governance, the decline in union membership and the progressivity of the tax system. Some of these trends may potentially reverse in the future - for instance as aging reduces labor supply, pushing up wages or calls for redistribution grow louder, though they are most likely to operate at the margins. Past experience suggests that current levels of inequality are likely to persist in the medium-term, absent an extreme shock of some kind.

The geopolitical landscape is characterized by a greater distribution of power that has challenged the capacity of the international system to respond effectively to a host of regional and global challenges - from the spread of nuclear weapons, authoritarianism and terrorism, through historical rivalries in the Middle East and Asia-Pacific to a growing rejection of free trade and immigration. Indices of geopolitical uncertainty have persisted at higher levels after they spiked on 9/11. This has been mirrored by elevated policy uncertainty - a weakening of the institutional structures which enable policymakers to act credibly and consistently.

Increases in uncertainty are found to have significant negative impacts on economic activity, raising the user cost of capital, increasing the option value of deferring investments where there are sunk costs and hindering the efficient reallocation of resources from low to high productivity firms. The impacts are felt most strongly in sectors like defense, finance, construction, engineering and healthcare which require extensive investment commitments and/or are exposed to uncertain government programs.

The trend towards policy uncertainty is a function of structural changes in political systems - above all, the rise in partisanship which has impeded compromise and effective negotiation, reinforced by the growth in the scale and complexity of government regulation. Even in systems designed to produce moderation, institutions may have had the effect of marginalizing important conflicts over policy rather than resolving them, increasing public apathy and dissatisfaction.