Future of Work: The AI revolution and the human response

25/07/2024

By Peter Workman

Singapore’s government has introduced a policy offering financial support for citizens (particularly the over 40s) who are pursuing courses aimed at retraining, or “upskilling” – that is, developing new or enhanced skills relating to their current role. The effectiveness of the new program remains to be seen, but it is a new and high profile example of a proactive government response to the challenges posed by automation and AI. It represents a strong state-led initiative to protect individuals in jobs which are made vulnerable by advances in technology.

These challenges are far from unique to Singapore, being common to all developed economies worldwide. Many industries are undergoing transformation through such factors. Moreover, the threat posed by technology does not merely involve particular skills or roles becoming obsolete through industry-specific innovations (which has occurred throughout history: who now requires the services of a parchmenter?). Rather, technology has reached the point of posing challenges that are fundamental and structural. Long before the arrival of AI, competition within many industries had already been supercharged and globalised by improved travel and the internet. AI is simply the newest element in the ongoing technological revolution that is transforming not just the nature of business but also the nature of work, and indeed of our entire culture.

One goal, many paths

Governments are seeking to keep up with the pace of change and to ensure that their economy and population remain competitive.

Is Singapore’s response a blueprint suitable for all developed nations? Probably not. Governments will need to tailor such initiatives to reflect the economic profile of their country (while keeping in mind that competition is now fully global in many industries). The US and UK, for instance, have larger knowledge-based sectors and a wider range of job roles than Singapore. For such economies, a more comprehensive approach may be needed. The skills required to remain competitive locally and globally will include AI literacy, digital literacy and data analysis, as well as strong communication and interpersonal skills. These are transferable skills which are future-proof (for now) and applicable across many domains. They involve attributes of critical thinking and problem-solving, combined with the uniquely human ability to rely on personal experience and instincts.

Similarly, there will be variation at the level of method and implementation. Mega-economies like the US could consider a skills voucher program such as that adopted in France, allowing individuals to choose from a broad range of approved upskilling programs. This has benefits for a country with a highly diverse workforce and a high degree of local (state-by-state) variation in industry profile and therefore demand. By contrast the UK, where there is less dramatic variation, might benefit from a more focused and directive system such as Germany’s. Germany’s “dual vocational training” channels young people into roles requiring technical expertise and practical skills through a blend of classroom learning and apprenticeships.

Funding models can vary too. Singapore’s model is to subsidise specific courses – a relatively narrow approach which is far from the only available option. An alternative mechanism, which the US and UK could consider, is the “portable skills fund”. The purpose of such a fund is to empower individuals to take responsibility for their own development, by granting them a sum which they can apply towards any approved program. The intention is to enable the realisation of individual career goals and foster a more engaged workforce.

Inaction versus action

It is likely that more countries will undertake upskilling initiatives comparable to Singapore’s. The pace of change generated by technology requires an ever nimbler and more adaptable workforce. Governments will feel mounting pressure to equip their citizens with the skills to compete in a globalised, tech-driven economy.

There are severe risks for nations that ignore this challenge:

  • Widening income inequality. Workers with in-demand skills will command higher salaries, further widening the gap between the highly skilled and the less skilled.
  • Decline in national competitiveness. Nations with a stagnant workforce will struggle to compete in the global marketplace, hindering economic growth and innovation.
  • Social unrest and political instability. Where a significant part of the population is unemployed or underemployed, the result is often social unrest and political instability.

By contrast, well-designed upskilling programs offer numerous benefits:

  • Increased worker productivity and innovation. A skilled workforce can use technology to its full potential, leading to increased productivity and innovation.
  • Enhanced job security. Workers with transferable skills are more adaptable to change and less susceptible to job displacement due to automation and AI.
  • Improved social mobility. Upskilling programs can provide opportunities for individuals to progress in their careers and achieve better standards of living.

Conclusion

Singapore’s upskilling policy is a compelling example of a proactive government response to the challenges posed by technology. It shows just one possible model for addressing the situation, which has no doubt been designed having regard to Singapore’s particular economic and industry profile and the needs of its population. The adoption of a deliberate strategy is something that all developed countries will do well to emulate, although the particulars of the strategy may vary significantly between nations. By prioritising the development of transferable, hard-to-replace human skills, governments can create future-proof workforces that can thrive in the face of continuous technological disruption. The alternative – failing to plan or to invest in upskilling – could have negative social and economic consequences for entire populations. Upskilling is one way for governments to increase the prospect of a prosperous and equitable future, in which humans and technology work side-by-side to the people’s benefit.

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