Johanna Chua

Ebrahim Rahbari

Graeme McDonald

Carl Benedikt Frey

Michael Osborne

Robert Garlick

Peter Chalif

Elizabeth Curmi

Craig Holmes

Martin Wilkie

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Executive Summary

When Citi and the Oxford Martin School co-wrote the first Technology at Work Citi GPS report in 2015 it highlighted how technology, including automation, robotics, digitization and AI, was sweeping through many industries, but with it came a growing risk to jobs — Carl Benedikt Frey and Michael Osborne’s analysis at the Oxford Martin School highlighted that 47% of U.S. employment was susceptible to automation and has been called one of the most influential studies of our time. By the time Technology at Work 2 had been written in 2016, we (together with the World Bank) identified employment risks averaged 57% in the OECD, including India at 69% and China at 77%. Many articles and books since than have warned about this growing threat and it’s easy to see automation impacting jobs all around us, yet a decade on from the Great Financial Crisis we have record high employment levels across many OECD countries. So is the fear over-hyped? As the next generation prepares to enter the world of work, are there also big employment opportunities to offset the risks? As Carl explains in the first chapter of this report, while history has shown progress creates as well as destroys jobs, the process can be very difficult for large parts of society for a very long time. Carl tackles this with great insight in his new book The Technology Trap: Capital, Labor, and Power in the Age of Automation. An additional problem during technological revolutions is it can be easier to see risks to current jobs than to predict jobs yet to be invented. This report is designed to help provide a clearer vision of what could be an uncertain employment future. On a sector and economy basis, Citi experts, whose job it is to help investors predict and influence the future, provide their thoughts on the job and skill trends ahead and on changes, risks, and opportunities. Chapter 3 provides a unique collection of advice. We borrow from Isaac Newton “If I have seen further than others, it is by standing upon the shoulders of giants.” What better way to be informed about what the future will look like than hear from some of the leaders who are inventing it. This includes: 12 CEOs from around the world; several experts on innovation; the U.K. MP for Skills and Apprenticeships; one of the leading educators in China; the former Minister for Universities and Science in the U.K.; the former Treasury Secretary of the U.S. and other leading economists; leaders of foundations; experts in diversity and inclusion; and several authors of related books on this topic. We are extremely grateful to this extraordinary group of experts who have provided their wisdom because they care about helping the next generation and finding solutions. The other good news is that plenty of solutions do exist, unlike the first industrial revolution, most people now have the ability to vote for the society they want to live in. Since the industrial revolution, GDP has risen over 100 fold and innovation has brought huge progress in health, prosperity, and betterment of life. In a 2016 survey, we found 76% of investors surveyed described themselves at techno-optimists, but many were also understandably techno-anxious in this era of disruptive innovation. The report is designed to either dig into or dip into, with a simple aim to help to take ‘change by the hand’ and find tailwinds to make your journey easier in the future of work.

When Citi and the Oxford Martin School co-wrote the first Technology at Work Citi GPS report in 2015 it highlighted how technology, including automation, robotics, digitization and AI, was sweeping through many industries, but with it came a growing risk to jobs &mdash; Carl Benedikt Frey and Michael Osborne&rsquo;s analysis at the Oxford Martin School highlighted that 47% of U.S. employment was susceptible to automation and has been called one of the most influential studies of our time. By the time Technology at Work 2 had been written in 2016, we (together with the World Bank) identified employment risks averaged 57% in the OECD, including India at 69% and China at 77%. Many articles and books since than have warned about this growing threat and it&rsquo;s easy to see automation impacting jobs all around us, yet a decade on from the Great Financial Crisis we have record high employment levels across many OECD countries. So is the fear over-hyped? As the next generation prepares to enter the world of work, are there also big employment opportunities to offset the risks?
As Carl explains in the first chapter of this report, while history has shown progress creates as well as destroys jobs, the process can be very difficult for large parts of society for a very long time. Carl tackles this with great insight in his new book The Technology Trap: Capital, Labor, and Power in the Age of Automation. An additional problem during technological revolutions is it can be easier to see risks to current jobs than to predict jobs yet to be invented. This report is designed to help provide a clearer vision of what could be an uncertain employment future. On a sector and economy basis, Citi experts, whose job it is to help investors predict and influence the future, provide their thoughts on the job and skill trends ahead and on changes, risks, and opportunities.
Chapter 3 provides a unique collection of advice. We borrow from Isaac Newton &ldquo;If I have seen further than others, it is by standing upon the shoulders of giants.&rdquo; What better way to be informed about what the future will look like than hear from some of the leaders who are inventing it. This includes: 12 CEOs from around the world; several experts on innovation; the U.K. MP for Skills and Apprenticeships; one of the leading educators in China; the former Minister for Universities and Science in the U.K.; the former Treasury Secretary of the U.S. and other leading economists; leaders of foundations; experts in diversity and inclusion; and several authors of related books on this topic. We are extremely grateful to this extraordinary group of experts who have provided their wisdom because they care about helping the next generation and finding solutions. The other good news is that plenty of solutions do exist, unlike the first industrial revolution, most people now have the ability to vote for the society they want to live in.
Since the industrial revolution, GDP has risen over 100 fold and innovation has brought huge progress in health, prosperity, and betterment of life. In a 2016 survey, we found 76% of investors surveyed described themselves at techno-optimists, but many were also understandably techno-anxious in this era of disruptive innovation. The report is designed to either dig into or dip into, with a simple aim to help to take &lsquo;change by the hand&rsquo; and find tailwinds to make your journey easier in the future of work.

Navigating the Future of Work

Change is necessary for progress, but with it comes risk. Winston Churchill once commented “if you don’t take change by the hand, it will take you by the throat.” The opportunities and risks multiply in our era of rapid change, driven by a hyper connected and digitizing world that is too fast for many.

Technology at Work v4.0

Robert Buckland

Joe Seydl

Natalia Mamaeva

"These are the players with or without a scorecard - in one corner a machine, and in the other one Wallace V. Whipple, man. And the game, it happens to be the historical battle between flesh and steel, between the brain of man and the product of man's brain. We all may book on this one and predict no winner, but we can tell you for this particular contest, there is standing room only, in the twilight zone." — Rod Serling

In the world of manufacturing, the majority of automation to date has been viewed as something that helped get the job done more efficiently. The Industrial Revolution created vast employment for low-skilled workers with the adoption of the assembly line and workers adapted by making their skills complementary to the arrival of new technologies. Despite an increasing amount of automation being added to the factory floor over the past two decades, humans are still required to work with the robots and in most cases still do the final assembly. But this time is different. Recent technological developments have been helpful to workers and consumers, but the economic benefits of these developments haven&rsquo;t been widely shared. Productivity has increased globally but real median wages have stagnated in many OECD countries leading to significant declines in labor's share of GDP. Inequality has widened, with the top 1% income share more than doubling in the past three decades amid a decline in employment in traditional middle-income jobs accompanied by a structural shift in the labor market. Workers have reallocated to low-income jobs hitherto less susceptible to automation, further worsening income inequality. The upcoming digital age may cause more upheaval than previous technological revolutions as it is happening faster than before and is fundamentally changing the way we live and work. Technology in the 21st century is enabling the automation of tasks once thought quintessentially human: cognitive tasks involving subtle and non-routine judgment. Through big data, the digitization of industries, the Internet of Things and industrial and autonomous robots, the world around us is changing rapidly as is the nature of work across occupations, industries and countries. Although we can&rsquo;t predict exactly which jobs will be affected, we do have a reasonably good idea about the type of tasks computers will be able to perform in the near future. Based on this, Carl Benedikt Frey and Michael Osborne predict that 47% of the U.S. workforce is at high risk of automation as a result of these trends and low-income and low-skill jobs are now, for the first time, most likely to be automated. In order to avoid disruption and upheaval from the digital age, countries need to understand the direction and pace of technological change and plan for the long term. To make growth inclusive again a shift in mindsets about labor market policy, tax reform, public investment and education is essential. Authors: Carl Benedikt Frey,Michael Osborne,Robert Buckland,Graeme McDonald,Joe Seydl,Natalia Mamaeva,Ebrahim Rahbari,Robert Garlick,

"These are the players with or without a scorecard - in one corner a machine, and in the other one Wallace V. Whipple, man. And the game, it happens to be the historical battle between flesh and steel, between the brain of man and the product of man's brain. We all may book on this one and predict no winner, but we can tell you for this particular contest, there is standing room only, in the twilight zone." — Rod Serling In the world of manufacturing, the majority of automation to date has been viewed as something that helped get the job done more efficiently. The Industrial Revolution created vast employment for low-skilled workers with the adoption of the assembly line and workers adapted by making their skills complementary to the arrival of new technologies. Despite an increasing amount of automation being added to the factory floor over the past two decades, humans are still required to work with the robots and in most cases still do the final assembly. But this time is different. Recent technological developments have been helpful to workers and consumers, but the economic benefits of these developments haven&rsquo;t been widely shared. Productivity has increased globally but real median wages have stagnated in many OECD countries leading to significant declines in labor's share of GDP. Inequality has widened, with the top 1% income share more than doubling in the past three decades amid a decline in employment in traditional middle-income jobs accompanied by a structural shift in the labor market. Workers have reallocated to low-income jobs hitherto less susceptible to automation, further worsening income inequality. The upcoming digital age may cause more upheaval than previous technological revolutions as it is happening faster than before and is fundamentally changing the way we live and work. Technology in the 21st century is enabling the automation of tasks once thought quintessentially human: cognitive tasks involving subtle and non-routine judgment. Through big data, the digitization of industries, the Internet of Things and industrial and autonomous robots, the world around us is changing rapidly as is the nature of work across occupations, industries and countries. Although we can&rsquo;t predict exactly which jobs will be affected, we do have a reasonably good idea about the type of tasks computers will be able to perform in the near future. Based on this, Carl Benedikt Frey and Michael Osborne predict that 47% of the U.S. workforce is at high risk of automation as a result of these trends and low-income and low-skill jobs are now, for the first time, most likely to be automated. In order to avoid disruption and upheaval from the digital age, countries need to understand the direction and pace of technological change and plan for the long term. To make growth inclusive again a shift in mindsets about labor market policy, tax reform, public investment and education is essential. Authors: Carl Benedikt Frey,Michael Osborne,Robert Buckland,Graeme McDonald,Joe Seydl,Natalia Mamaeva,Ebrahim Rahbari,Robert Garlick,

The Future of Innovation and Employment

When I entered the grown-up workforce back in 1991, the trading floor ran on the power of telephones, photocopiers, faxes and the green glow of Quotron machines. This was pre-Internet and pre-email – we received annual reports from corporates through the mail, stored them in file cabinets and compiled information for research reports through hours of phone calls and trips to the corporate library. The introduction of the World Wide Web was like hiring an extra assistant to help get the job done — information was just a click away on a search engine, eliminating the need for the daily search through the reference book stacks.

Technology at Work

Mark May

Dan F Homan

Chinchih Chen

Ji Cheong

Nick Coulter

Paola Mello

Masashi Miki

Anthony Moulder

Gareth M Phillips

Alicia Yap

This report, the third in the Technology at Work series, focuses on the automation driven by e-Commerce for physical goods. We look at the technology needed to automate order fulfillment, inventory management, and delivery when consumers shop online and examine the implications in a wide range of areas for industry, retailers, supply chains, real-estate, and transportation, looking too at the impact on labor and employment. Growth in e-Commerce is the main driver of warehouse automation, a driver which itself will increase with broadband and mobile device penetration. In Japan, 32% of all goods bought on the Internet were bought on smartphones in 2016, up from 27% a year earlier. Millennials, those most likely to shop online, will soon enter their peak spending years. Global e-Commerce sales have grown at a compound annual growth rate of 20% over the last decade, and online retail sales have gone from ~2% of total to ~8%%. While technology is not yet either capable or cost effective in all cases, this is likely to change. Our estimates show that that 80% of jobs in transportation, warehousing, and logistics are susceptible to automation as a consequence of the trends we observe in technology. Retail is one industry in which employment is likely to vanish, but unlike manufacturing jobs which are highly concentrated, the downfall of retail employment will affect every city and region. U.S. companies employ 2 million people just to do stock and order fulfillment work and over 90% of warehouse picking is currently done by hand. Migrating to automated picking gives productivity gains of 2x–3x that as compared to pick-to-conveyor operations and 5x–6x as compared to manual pick-to-pallet fulfillment centers. The adoption of technology is by no means uniform. While one-hour delivery is available when buying online in some parts of the U.S. and Europe, the average promised delivery time in Brazil is nine days. While e-Commerce penetration is 87% in the U.K., it is only 18% in Romania. By end industry, penetration is highest in clothing and sporting goods. The virtual world is also subject to physical constraints. Warehouse availability is now at an all-time low in the U.S. and land availability for warehouses is already a problem in London, where 60%–70% of industrial sites sold are “lost” to residential development. Online business models need 300% more warehousing space compared to store-based fulfillment. Based on forecasts from Euromonitor for global e-Commerce growth, over 2.3 billion square feet of new warehousing space will be required by 2035. Road traffic is a challenge too — kilometers traveled by light goods vehicles in the U.K. were 47% higher in 2015 compared to 2000, while kilometers traveled by passenger cars were only 5% higher. Authors: Martin Wilkie,Carl Benedikt Frey,Chinchih Chen,Ji Cheong,Nick Coulter,Dan F Homan,Mark May,Graeme McDonald,Paola Mello,Masashi Miki, CFA,Anthony Moulder,Gareth M Phillips,Alicia Yap, CFA,

This report, the third in the Technology at Work series, focuses on the automation driven by e-Commerce for physical goods. We look at the technology needed to automate order fulfillment, inventory management, and delivery when consumers shop online and examine the implications in a wide range of areas for industry, retailers, supply chains, real-estate, and transportation, looking too at the impact on labor and employment. Growth in e-Commerce is the main driver of warehouse automation, a driver which itself will increase with broadband and mobile device penetration. In Japan, 32% of all goods bought on the Internet were bought on smartphones in 2016, up from 27% a year earlier. Millennials, those most likely to shop online, will soon enter their peak spending years. Global e-Commerce sales have grown at a compound annual growth rate of 20% over the last decade, and online retail sales have gone from ~2% of total to ~8%%. While technology is not yet either capable or cost effective in all cases, this is likely to change. Our estimates show that that 80% of jobs in transportation, warehousing, and logistics are susceptible to automation as a consequence of the trends we observe in technology. Retail is one industry in which employment is likely to vanish, but unlike manufacturing jobs which are highly concentrated, the downfall of retail employment will affect every city and region. U.S. companies employ 2 million people just to do stock and order fulfillment work and over 90% of warehouse picking is currently done by hand. Migrating to automated picking gives productivity gains of 2x&ndash;3x that as compared to pick-to-conveyor operations and 5x&ndash;6x as compared to manual pick-to-pallet fulfillment centers. The adoption of technology is by no means uniform. While one-hour delivery is available when buying online in some parts of the U.S. and Europe, the average promised delivery time in Brazil is nine days. While e-Commerce penetration is 87% in the U.K., it is only 18% in Romania. By end industry, penetration is highest in clothing and sporting goods. The virtual world is also subject to physical constraints. Warehouse availability is now at an all-time low in the U.S. and land availability for warehouses is already a problem in London, where 60%&ndash;70% of industrial sites sold are &ldquo;lost&rdquo; to residential development. Online business models need 300% more warehousing space compared to store-based fulfillment. Based on forecasts from Euromonitor for global e-Commerce growth, over 2.3 billion square feet of new warehousing space will be required by 2035. Road traffic is a challenge too &mdash; kilometers traveled by light goods vehicles in the U.K. were 47% higher in 2015 compared to 2000, while kilometers traveled by passenger cars were only 5% higher. Authors: Martin Wilkie,Carl Benedikt Frey,Chinchih Chen,Ji Cheong,Nick Coulter,Dan F Homan,Mark May,Graeme McDonald,Paola Mello,Masashi Miki, CFA,Anthony Moulder,Gareth M Phillips,Alicia Yap, CFA,

Automating e-Commerce From Click to Pick to Door

Our Technology at Work series serves to highlight the implications of the disruption brought by the digital revolution. As we have shown in previous reports, 47% of jobs in the United States are at risk of automation over the forthcoming decades and similar shares have been estimated for other countries. This means the effects of the digital revolution are yet to be seen. In a recent interview in April 2017, Jack Ma, founder and Chairman of Alibaba, expects “decades of pain” as the Internet disrupts traditional businesses leading to “all sorts of industries and walks of life.”

Technology at Work v3.0

In this new report, Oxford Martin School academics; Dr. Carl Benedikt Frey, Associate Professor Michael Osborne and Dr. Craig Holmes expand their theories on the changing nature of innovation and work and the associated implications for the future of employment and society more widely. Based on their methodology that predicted 47 percent of U.S. jobs were at risk from automation, the authors now look at the probabilities of jobs at risk across the world as well as the disparities of job risk between cities. To protect against jobs being eliminated due to automation, it is important to recognize which characteristics are most likely to be associated with a given job being automated — perception and manipulation, creative intelligence, and social intelligence are the three bottlenecks to automation. Cities and regions that have invested in skilled industries remain relatively safe from automation and technological dynamism will remain the best way to maximize employment and to benefit positively from new technologies. Education is also a very important tool that policymakers will need to leverage in preparation for the effects of accelerated technological change. Throughout this report, Citi Research analysts drill deeper into specific industries to highlight a number of sectors already feeling the effects of automation as well as areas where technology is helping to create new jobs. The Citi Research Economics team investigates whether traditional measurement tools are failing to capture the productivity and GDP improvements as well as the subsequent inflation effects that come from accelerated technological change. Finally, we look to identify adequate policy responses for the issues highlighted in this report. We hope that you enjoy this Citi GPS report. We look forward to sharing the results of the exciting collaboration between Citi and the Oxford Martin School in future reports. Andrew Pitt Global Head of Research Citi Ian Goldin Director of the Oxford Martin School Professor of Globalisation & DevelopmentUniversity of Oxford Authors: Carl Benedikt Frey,Michael Osborne,Craig Holmes,Ebrahim Rahbari,Robert Garlick,Graeme McDonald,Elizabeth Curmi,Johanna Chua,Peter Chalif,Martin Wilkie,Authors: Carl Benedikt Frey,Michael Osborne,Craig Holmes,Ebrahim Rahbari,Robert Garlick,Graeme McDonald,Elizabeth Curmi, PhD.,Johanna Chua,Peter Chalif,Martin Wilkie,Authors: Carl Benedikt Frey,Michael Osborne,Craig Holmes,Ebrahim Rahbari,Robert Garlick,Graeme McDonald,Elizabeth Curmi, PhD.,Johanna Chua,Peter Chalif,Martin Wilkie,

In this new report, Oxford Martin School academics; Dr. Carl Benedikt Frey, Associate Professor Michael Osborne and Dr. Craig Holmes expand their theories on the changing nature of innovation and work and the associated implications for the future of employment and society more widely. Based on their methodology that predicted 47 percent of U.S. jobs were at risk from automation, the authors now look at the probabilities of jobs at risk across the world as well as the disparities of job risk between cities. To protect against jobs being eliminated due to automation, it is important to recognize which characteristics are most likely to be associated with a given job being automated &mdash; perception and manipulation, creative intelligence, and social intelligence are the three bottlenecks to automation. Cities and regions that have invested in skilled industries remain relatively safe from automation and technological dynamism will remain the best way to maximize employment and to benefit positively from new technologies. Education is also a very important tool that policymakers will need to leverage in preparation for the effects of accelerated technological change. Throughout this report, Citi Research analysts drill deeper into specific industries to highlight a number of sectors already feeling the effects of automation as well as areas where technology is helping to create new jobs. The Citi Research Economics team investigates whether traditional measurement tools are failing to capture the productivity and GDP improvements as well as the subsequent inflation effects that come from accelerated technological change. Finally, we look to identify adequate policy responses for the issues highlighted in this report. We hope that you enjoy this Citi GPS report. We look forward to sharing the results of the exciting collaboration between Citi and the Oxford Martin School in future reports. Andrew Pitt Global Head of Research Citi Ian Goldin Director of the Oxford Martin School Professor of Globalisation &amp; DevelopmentUniversity of Oxford Authors: Carl Benedikt Frey,Michael Osborne,Craig Holmes,Ebrahim Rahbari,Robert Garlick,Graeme McDonald,Elizabeth Curmi,Johanna Chua,Peter Chalif,Martin Wilkie,Authors: Carl Benedikt Frey,Michael Osborne,Craig Holmes,Ebrahim Rahbari,Robert Garlick,Graeme McDonald,Elizabeth Curmi, PhD.,Johanna Chua,Peter Chalif,Martin Wilkie,Authors: Carl Benedikt Frey,Michael Osborne,Craig Holmes,Ebrahim Rahbari,Robert Garlick,Graeme McDonald,Elizabeth Curmi, PhD.,Johanna Chua,Peter Chalif,Martin Wilkie,

The Future Is Not What It Used to Be

It is a pleasure to introduce Technology at Work v2.0: The Future Is Not What It Used To Be. This report is the third in a long-term series of Citi GPS reports co-produced by Citi and the Oxford Martin School at the University of Oxford in order to explore some of the most pressing global challenges of the 21st century. The report further explores the concepts introduced in our February 2015 report, Technology at Work: The Future of Innovation and Employment, which marked the introduction of the Oxford Martin Programme on Technology and Employment, a long-term program of research at the University of Oxford supported by Citi that will focus on the implications of a rapidly changing technological landscape for economies and societies.

Technology at Work v2.0

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In this new GPS report, Technology at Work v6.0, the team looks at how digital acceleration during the pandemic could drive a shift in the economy from post-industrial to post-production due to increased automation and offshoring risk for the services sector, similar to what’s already happened in the manufacturing sector. We argue that governments and policymakers need to boost innovation and new job creation to offset production tasks that are offshored and automated away. The focus should be on skills that foster innovation and exploration to drive employment in areas focusing on the early stages of the technology lifecycle.

Technology at Work v6.0

The digital age is set to cause more upheaval than previous technological revolutions because change is happening faster than ever before and is fundamentally altering the way we live and work. This series studies the changing nature of innovation and work, and the associated implications for the future of employment and society more widely. We assess the extent of automation and its effect on the labor market across industries and countries and propose pathways and strategies that can help governments and societies adapt successfully.

Technology at Work v2.0

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