Older workers in China and other Asian nations are most vulnerable to displacement from increasing adoption of workplace automation, according to “The Twin Threats of Aging and Automation,” a new report released by Marsh & McLennan Companies’ (NYSE: MMC) Global Risk Center. The convergence of an aging global population with workplace automation is expected to have significant economic and societal consequences, particularly in major Asian countries, where low-skilled workers between the ages of 50 and 64 are becoming an increasingly greater proportion of the active workforce (see “About the Report”).
To garner insight on the related risks of societal aging and workplace automation, the Global Risk Center brought together experts from two of Marsh & McLennan Companies’ leading professional services firms, Mercer and Oliver Wyman, to aggregate and analyse market-specific economic data to quantify the risk posed by automation to older workers in 15 countries across Asia, Europe and the Americas (see “Figure 1”). The study found that five out of the top six countries – China, Vietnam, Thailand, South Korea and Japan – were located in the Asian Pacific.
“While businesses today are racing to adopt intelligent technologies, the fallout of this shift could disproportionately impact older workers, leading to unemployment, widening inequality and greater strain on safety nets,” said Axel Miller, Oliver Wyman partner and co-author of the report. “Even as older workers in aging nations are willing and able to engage in meaningful work, those skilled in the ‘yesterday’ work environment might be at risk of being excluded from the economy of tomorrow.”
Key Findings of the Report Include:
“Automation enables unprecedented levels of productivity and gives firms the ability to invest in new revenue streams and younger workers,” said Patty Sung, a principal with Mercer and co-author of the report. “However, investing in younger workers will become challenging as the younger population shrinks. Governments and companies should not – and cannot – ignore older workers, and need plans that address older workers in addition to their larger digital strategies.”
Figure 1: Weighted average risk of automation to older workers (50-64)
About the Report:
Using data from the United Nations (UN), the authors calculated the number of older workers employed in each of the UN’s nine categories of employment. For most countries, older workers are defined as those still active in the workforce between the ages of 50 and 64 – with the exception of Canada (45-64) and the United States (55-64). By mapping these nine categories to “risk of automation” values from University of Oxford researchers Martin Frey & Carl Osbourne, the authors then generated weighted-average scores for the automation risk to older workers for each nation, computing the Average Risk of Automation to Older Workers score.
About Mercer, Oliver Wyman and Marsh & McLennan Companies’ Global Risk Center
Marsh & McLennan Companies (NYSE: MMC), is the world’s leading global professional services firm in risk, strategy and people. Marsh & McLennan Companies’ Global Risk Center Center addresses the most critical challenges facing enterprise and societies around the world by bringing together leaders from industry, government, non-governmental organizations, and the academic sphere to explore new approaches to problems that require shared solutions across businesses and borders.Mercer delivers advice and technology-driven solutions that help organizations meet the health, wealth and career needs of a changing workforce. Mercer’s more than 23,000 employees are based in 44 countries and the firm operates in over 130 countries. Oliver Wyman is a global leader in management consulting. With offices in 50+ cities across nearly 30 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, and organization transformation. The firm has more than 4,700 professionals around the world who help clients optimize their business, improve their operations and risk profile, and accelerate their organizational performance to seize the most attractive opportunities. For more information, visit www.mercer.com and www.oliverwyman.com. Follow Mercer on Twitter @Mercer and Oliver Wyman @OliverWyman.
With nearly 65,000 colleagues and annual revenue of over $14 billion, Marsh & McLennan helps clients navigate an increasingly dynamic and complex environment through its market-leading companies including Marsh, Guy Carpenter, Mercer and Oliver Wyman. For more information, visit mmc.com, follow us on LinkedIn and Twitter @mmc_global or subscribe to BRINK.