HP Innovation Journal Issue 12: Summer 2019 | Page 68

BRIDGING THE LABOR GAP JONATHAN BRILL Global Futurist, HP MAGGIE ANCONA Head of Enterprise Digital Strategy & Transformation, HP As we accelerate into the future, the next wave of automation will look different from today’s version. Instead of solely focusing on cost reduction, the goal will be to improve speed and agility. This next wave comes at a time when companies are needing to radically increase the performance of their most expensive workers. By 2030, there will be a 16% global shortage of workers with four-year degrees. This shortage will drive up the cost of labor around the world. In Singapore, this is projected to increase average wages from $44,000 to over $70,000 USD per head. Meanwhile, the U.S. is projected to see $8,300 of wage inflation for skilled workers. 1 India is the only major economy with an excess capacity of high-skill labor. Its 1.1 million excess workers will have an insignificant impact on this crisis. 2 They will have just enough to backfill the high-skill labor shortage in California.³ The economic impacts of labor shortages are being com- pounded by accelerating innovation. To give a sense of scale, 30% of IT sector employees will require more than three months of retraining between 2018 and 2022, accord- ing to a recent study by the World Economic Forum.⁴ Companies will have to think very differently about labor and automation than they did when skilled labor was growing and skills lasted longer. Wage inflation will crush the margins of those who don’t. There are three approaches to driving productivity: F MORE PEOPLE F FASTER TOOLS F BETTER PROCESSES 66 HP Innovation Journal Issue 12