Skills in the Era of AI and Aging

Last week, I wrote about the skills opportunity uncovered by ADP research.  However, within that opportunity there lies a paradox.  In today’s workplace, skills are being created and retired simultaneously, at rapid rates. How can skills evolution be jumping forward and falling behind at the same time?  The answer lies in two megatrends which will reshape the workforce of the future: aging demographics and rapid-fire innovation. 

Skill acquisition (expertise)

One way to peak into the future of work, it to track the evolution of skill acquisition, known as expertise, in the workplace.  Expertise is the worker’s capability to deliver a good or service that is demanded by customers.  Be it a carpenter’s handiwork in designing custom cabinets, or accountant’s facility in tax preparation human expertise is embedded in the product or service delivered.

The Paradox

Expertise, and the skills that compose it, are constantly evolving as technology advances. Meanwhile, skill acquisition takes time and is often hard to acquire.  For some workers it means advanced degrees, on the job training, experience or most often, all of the above. 

The effort needed to gain skills is why they are valuable in the first.  One promise of advanced technology is that it makes new skills easier to acquire. As the economy becomes more digital, new skills can be accessed through a computer or a smartphone.

At the same time skills that are derived from experience and tenure are quickly being depleted. With 10,0000 workers in the US hitting 65, retirement age daily, experienced expertise is leaving the workforce at an unprecedented rate.  

My Take

When we think of the labor market, we primarily use job creation as the barometer of a healthy economy.  However, purely judging the labor market by the number of jobs it creates isn’t a great way to understand the future because it fails to capture the megatrends that are reshaping the nature of work.

For example, a teacher may still teach students, but now does so with the aid of a computer instead of a notebook, a promethean board (instead of a chalkboard) and both in-person and virtual classrooms.  The task of teaching, like many other professions, has been transformed by technology that has led to new skills sets.

At the same time, the workforce is aging rapidly into its retirement years.  As workers leave the workforce, they often take their expertise, experience, know-how and skills with them.  Hence the paradox, in the age of AI and aging, skills in the workplace have never been easier to acquire or have been so hard to retain. 

The week Ahead

Monday: This holiday shortened week is highlighted by the US Presidential inauguration in the US.  Meanwhile the World Economic Forum also convenes global leaders to Davos, Switzerland for the week. Data releases are light this week.

Friday: Four years ago, the 30 year mortgage rate reached a  record low of 2.7 percent, Since then, homebuyers are now adjusting to rates more than double that level.  The December report on existing home sales, will give a preview of the 2025 housing market .