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/ / The Impact of Automation on the Job Market and Economy

The Impact of Automation on the Job Market and Economy

Good news/bad news when it comes to automation and the job market.

The bad news is that, yes, some jobs will go the way of the dinosaur. The good news is that even more new jobs will be created. The somewhere-in-between news is that many workers will need to reskill and reeducate themselves to thrive in a new work economy. Learning new things isn’t bad, but it can be challenging. Luckily, we’ll be facing this challenge together. We’ll figure out how to navigate the new status quo of automation, but there will be some major shifts at first.

Here’s what we can expect from automation.

The Benefits of Automation

Automation will do a lot of good for a lot of sectors. 

By using automation to handle repetitive or menial tasks, production, and productivity will be at an all-time high. Skilled workers can focus on more important tasks, like management and innovation, that add greater value to the company. As it’s used today, automation is already improving productivity for nearly 70% of workers that use it.

Automation can also support greater and more consistent product quality. Creating repeatable processes eliminates errors and inconsistencies. With better products, producers enjoy a better reputation among customers.

Safety has always been a top concern. In industries with higher injury risk, like manufacturing, mining, and agriculture, automation improves safety by handling more dangerous tasks. One 2022 study found that increased robot exposure in a labor market reduced work-related injuries by 1.2 cases per 100 workers.

Two big benefits businesses will love: saving time and money. McKinsey estimates the world can save a whopping 749 billion working hours by automating just 64% of manufacturing tasks. Imagine the compounding effect of automation across all industries. By lowering labor costs (and labor injury costs) and making tasks more efficient, automation is a huge time- and money-saver. You’ll improve your bottom line without hiring anyone to do it — can’t beat it.

The Drawbacks of Automation

Nothing is perfect, automation included. We need to prepare to take the bad with the good. With automation, the bad is mostly worker displacement, the need for re-skilling, and reduced human interaction in a world that’s more isolated yet more digitally connected than ever.

The biggest concern on everyone’s mind is job loss. Will robots take our jobs? Not exactly, but they’ll displace some workers while creating other new job opportunities. Computers can complete tasks faster and more accurately than humans, so certain jobs might not be necessary anymore. But that’s how it’s always been. Video killed the radio star. New technology makes old jobs irrelevant. Some people will be out of work, but new roles will pop up and need people to fill them.

With new types of work available, we’ll need to re-skill the current labor force to work with automation. This is a cost that employers will face, but the cost to re-skill (about $10k) is still drastically lower than the cost of employee turnover and hiring someone new (33% of the departing employee’s salary).

Re-skilled employees worldwide working hand-in-hand with new technology will be highly valuable, and many of these jobs can be done at home or remotely. The drawback to that is, of course, social isolation. The pandemic reduced human interaction in big ways. A lot of it still lingers. Decreased social interaction can harm happiness and health, so we’re challenged to ensure a healthy level of interaction despite the vast opportunity to work independently that automation allows.

Another consideration? The continued need for human intervention. Automation tools can’t function entirely alone — a human must be involved to operate the tool and make decisions. Some might call this a downside, others a benefit. More on that later.

Industries Most Affected by Automation

Some industries and jobs are ripe for automation to make vast improvements. Think repetition. Think safety hazards. Think lower-level, routine, physical tasks. That leaves manufacturing, transportation, and retail especially vulnerable to evolution via automation.


Manufacturing is by nature repetitive. Processes must be repeatable to produce a consistently high-quality product. It’s no surprise that more than half of the 749 billion working hours spent on manufacturing activities are automatable with the technology we already have.

Manufacturing has already used automation for a while because efficiency and accuracy are top priorities. As automation tools become more affordable and accessible, automation will take over more manufacturing working hours. Production jobs are especially susceptible to displacement, more than any manufacturing occupation.

But the future isn’t grim. Instead of using entirely robotic workforces, manufacturers will blend automation technologies like robots and autonomous vehicles with human work to get the most return while maintaining quality standards. The desired skill set for manufacturing workers will likely change, but it’s nothing a little re-skilling can’t fix.


Automation could completely transform transportation. The logistics and commercial transportation industries will lean on autonomous fleets to drive supply chains and bring deliveries directly to consumers’ doorsteps. Industry leaders Walmart, Kroger, and Alibaba are already testing autonomous or unmanned delivery vehicles. They’re enjoying the benefit of cutting their logistics-related costs by as much as 30%.

Personal transport services will also look wildly different. Fewer people will own cars because on-demand car services will take center stage, cutting costs and optimizing local vehicle use. Transportation-as-a-service models and more optimized ride-sharing options will start popping up. They’ll be popular. Why pay for a car all the time when you could pay for it only when you need it?

What’s next? Self-organizing fleets, smart shipping containers, driverless taxis, completely autonomous vehicles, and a goldmine of logistics data we can use to improve things like traffic and delivery efficiency.

Truck drivers, taxi drivers, and transportation industry workers may start to see automation take over their roles. Still, new roles will be needed to design and program automated vehicles, partially offsetting some of this job loss. This switch toward higher-skilled technical positions will likely result in higher net employment, but displaced workers with minimal skill sets may struggle to find their new place.


The retail industry is already drastically different than it used to be, whether we realize it or not. Behind the scenes, warehouses and distribution centers are using robots to boost efficiency, keep employees safe, and improve accuracy. Then you have ecommerce, which has disrupted the traditional brick-and-mortar retail industry. 

As retail evolves, so does automation. From self-checkout to Amazon’s automated cashier-less checkout, retail’s already made great strides. Unfortunately, this shift will likely displace hourly retail workers, many of who live below the poverty line. Women, who make up 73% of retail cashiers, will be hurt the most.

New jobs will arise, just like in other industries where automation is already revolutionizing things. Tech and engineering jobs to create and manage retail automation tools will be in high demand, but these likely aren’t jobs displaced hourly retail workers can easily transition into.

The Future of Work and the Skills Needed to Succeed

Automation will shift the job market drastically, but not in the ways you might think. Yes, some jobs will no longer exist, but new jobs will pop up. Job loss numbers are often shared on their own to instill fear, ignoring job creation figures. But you can’t understand one without the other.

The World Economic Forum estimates that technology will create at least 12 million more jobs than it destroys by 2025. That’s a net positive change we can look forward to.

Many jobs that automation will impact won’t be entirely divested of human intervention; employees will find their workload greatly improved by adding automation, or they’ll be needed in a different capacity to work with the new tech.

One of automation’s strongest selling points is that it’s perfect for handling dirty, dangerous, and menial jobs, empowering companies to offer current or aspiring employees more attractive positions. But automation won’t be able to handle everything.

Automation won’t have as strong of an impact on jobs that require:

  • People management
  • Expertise application
  • Social interaction
  • Unpredictable environments

These jobs will still need humans to fill them. Certain skills that robots and computers can’t replicate will be in high demand. According to McKinsey and the Department of Labor, these include:

  • Social and emotional skills
  • Customer service
  • Higher cognitive skills
  • Healthcare provider skills
  • Advanced IT skills
  • Sales skills
  • Engineering skills
  • Communication and negotiation skills
  • Creativity
  • Active learning
  • Critical thinking
  • Adaptability
  • Specific technical skills

Automation can’t be entirely independent, and even automated jobs will still require some human interaction. Some companies may see this as a drawback as there will still be labor costs. Others see it as a positive – humans need jobs, even if those jobs are new ones that support an automated infrastructure. The reality is that it’s a bit of both. We’ll never be a fully automated society, but that’s a good thing. The essential balance between human and automated intervention will preserve efficiency, quality, and a personal touch.

Ensuring the workforce has the new skills needed to support this shift starts with education. STEM will be in extremely high demand, so including a rigorous STEM program will help prepare students for the job market. As for current workers, reskilling employees in automation technology and using training programs to bring new hires up to speed will help close the skill gap.

Navigating the Automated Workforce

The future of work is a bright one if we know to maneuver it. Staying up to date on changes in the job market and new in-demand skills will put you in a good spot to adapt as they come. Check out more insights on my site to learn about the future of work and the skills you’ll need to succeed. 

On the cusp of something big in automation? I want to know about your startup.

As always, enjoy the ride.