THIS ECONOMY IS almost exactly the one we were promised. Decades
ago, when we imagined the future, the world looked like the one depicted
in “The Jetsons,” where people commuted to work in flying cars
and managed robots from their desks by hitting an array of multi-hued
buttons. Admittedly, we don’t yet have flying cars (though we may soon
have autonomous ones). But the Jetsons-esque world we dreamt of is
finally being realized.
So why are we unprepared? As director of Purdue University’s
business information and analytics center, I spend much of my time
ruminating on technology’s effect on the future of business and the
workforce. I believe that companies’ desire for cost-cutting, combined
with advances in artificial intelligence (AI) and machine learning, will dramatically increase automation, leading
to a sharp decline in jobs. In fact, in
its 2018 “The Future of Jobs” report, the
World Economic Forum predicts that
by 2022, 75 million jobs will be lost as a
consequence of automation.
Most of these lost jobs will belong
to blue-collar workers in the manufacturing
sector. But, as autonomous cars
become more commonplace and AI
grows more sophisticated, even truck
drivers and financial advisors could end
up almost extinct.
It’s encouraging to learn that the
World Economic Forum also expects
that 133 million new jobs eventually
will be created by automation. But
where will these job opportunities be?
The answer will depend on the level of
job. Blue-collar jobs will be replaced by
“new-collar” jobs, a term made popular
by IBM CEO Ginni Rometty to describe
positions that don’t require a four-year
degree but take a certain amount of
technical or vocational training. At the
same time, white-collar workers will be
pressed to learn to use technology to create
value for their organizations.
But even if many of tomorrow’s
workers won’t need four-year degrees,
our universities won’t suddenly become
obsolete. Future workers will simply
need different skills than today’s college
courses emphasize—and that means that
we need to change the skills we teach.
THE BLUE-TO-NEW SKILLS GAP
In August, CNBC reported that there are
approximately 6.56 million unemployed
workers, while there also are approximately
6.6 million unfilled jobs. The
problem is that the workers available
don’t have the technological skills the
unfilled jobs require. More than 50
percent of Business Roundtable’s members
report that talent gaps are already
“problematic or very problematic” for
their companies. IBM alone needs to fill
25,000 positions in the next four years.
But here’s the good news: Companies
have been partnering with educational institutions to launch abbreviated training
programs to create a steady pipeline
of talent. For example, Microsoft has
given US$25 million to fund Skillful, a
program that fosters skills-based hiring,
training, and education. And Rometty
led IBM to invest $1 billion in initiatives
such as Pathways in Technology Early
College High School (P-TECH), a sixyear
public high school that first opened
in Brooklyn, New York, in 2011. Through
the P-TECH model, students receive
four years of high school education plus
two years of college courses that prepare
them for new-collar careers. Currently,
110 P-TECH schools are open in the U.S.
The creation of new-collar jobs will
offset job losses caused by automation,
but workers must be trained to fill those
positions. Companies and academic
institutions must promote awareness
of short-duration programs and remove
any stigma around vocational training.
THE WHITE-COLLAR SHIFT
For white-collar workers, the future
economy will value four higher-level
skills: coding, analytics, design, and
interpersonal. Workers with coding and
analytics skills will interact more with
machines and systems than with people,
as they create digital products and experiences.
Workers with design and interpersonal
skills will help companies understand
these products and experiences in
the context of people’s daily lives.
And new kinds of jobs are continually
being created, such as “foresight engineers”
who anticipate people’s future
needs and design entirely new ways for
them to do business with each other and
with machines. Technological expertise
will be in demand even in previously
non-tech jobs, like caregiving.
Over the next few years, we’ll continue
to see an increased demand for
workers with backgrounds in coding
and analytics. But four to five years from
now, I predict that people with design
and interpersonal skills will be more
sought-after in the job market.
WHAT’S A B-SCHOOL TO DO?
Without a doubt, higher education must
adapt to these changing trends. We must
realize that the future of innovation
is not only in problem solving; it’s also
in problem finding. Workers who can
identify opportunities for new products,
better processes, and faster services will
keep the economy moving.
Unfortunately, in education, we place
extensive emphasis on problem solving.
When we ask students to address a deep
business or organizational problem, they
almost always begin the conversation
with solutions: “We can do this, and this,
and this.” They don’t first consider why
the problem even manifests.
To be fair, we must develop students’
problem-solving skills in the early
stages of education. But as students
mature, they must understand that
every business solution ultimately
benefits humans. Only when students
are mindful of human instincts and their
consequences will they become adept at
detecting problems that organizations
might not yet know exist.
At Purdue, I teach a course called Design
for Instincts: Social Networks and
Engagements, in which students learn a
concept I call “instinctual appeal.” This
refers to the act of understanding human
instincts and biases in order to spot
potential problems more easily. With this
understanding, students learn how to
nudge human behavior and design better
products, processes, and policies.
In every class meeting, students
complete a game, exercise, or fieldwork
in which they evaluate alternatives and
design solutions with instinctual appeal
in mind. In one assignment, for example,
students interview shoppers in a mall,
before designing a clothing retail business
to appeal to today’s customers.
Another exercise is inspired by the
Red Balloon Challenge, conducted in
2009 by the U.S. Defense Advanced
Research Projects Agency (DARPA).
For the challenge, DARPA distributed
ten balloons across the United States.
The agency then invited teams to locate
all ten balloons as quickly as possible
by using the geographically distributed
knowledge of their online social networks.
A team from the Massachusetts
Institute of Technology took only nine
hours to locate all ten balloons, winning
the $40,000 grand prize. In my version, I
hide pieces of information—in this case,
ten pictures of a duck—across campus.
Students ask people in their social
networks across the Purdue community
to help them find the pictures. The team
that finds all ten pictures first wins a
more modest prize of $100. The exercise
is a way for students to learn to tap, as
DARPA describes it, “timely communication,
wide-area team-building, and
urgent mobilization … to solve broadscope,
Our students will need far more
experiential learning opportunities like
this if they are to succeed in a new-collar
economy. So far, my students have applied
what they’ve learned in many ways
after graduation. One has redesigned the
way badminton championship games
are scored in India; others have designed
new customer engagement systems for
Fortune 500 companies.
If we adapt our educational models,
we’ll give students a path to success and
financial stability, we’ll give businesses
a deep pool of talent, and we’ll position
our institutions to thrive in a global
landscape. We’ll help industries boom
and evolve rather than stutter or die.
Then, all we’ll need to complete the
picture are the flying cars.
Karthik Kannan is the Thomas Howatt
Chaired Professor in Management at
Purdue’s Krannert School of Management
in West Lafayette, Indiana. He is
the director for the Business Information
and Analytics Center and
previously was academic
co-director for the MS
in business analytics
This article originally appeared in BizEd's January/February 2019 issue. Please send questions, comments, or letters to the editor to [email protected].