Automation has sent the country's workers down separate paths, according to a new report from McKinsey Global Institute.
Twenty-five "megacities and high-growth hubs" accounted for more than two-thirds of job growth in the past 10 years, and that trend is expected to continue. Meanwhile, employment gains have been flat in low-growth cities, and rural counties mostly have fewer jobs than they did before the Great Recession.
Those divisions are poised to grow. Over the next decade, automation is more likely to displace workers in rural areas than those in urban areas with more diverse economies, such as Washington, D.C., and San Francisco.
Automation will hurt certain demographic groups more than others, McKinsey researchers predict. Nearly 26% of Hispanic and 23% of African American workers will be displaced, compared to 22% of white and Asian American workers. Workers under age 34 and over age 50 also face high displacement rates.
Although such findings are bleak, the report offers a few bright spots.
The higher education sector can help mitigate some of the worst effects of automation for workers, the authors write. Adding new pathways from high school to the workforce, making the credential marketplace more transparent and giving students opportunities to return to school throughout their lives can all help.
"It's a wakeup call for the need to be more agile in our thinking and our approach to lifelong learning," said Kemi Jona, associate dean for digital innovation and enterprise learning at Northeastern University. "If higher education continues to think the traditional one-size-fits-all approach is going to work, we're going to miss the boat."
Making room for lifelong learning
The concept of lifelong learning is not new. The skills needed to thrive in today's tech-based economy are continually shifting, requiring many workers to pursue additional education. Indeed, 11.5 million workers over age 50 are at risk of losing their jobs to automation, according to the McKinsey report.
Even those who aren't at risk will need new skills. McKinsey researchers estimate current technologies could take over about 30% of activities in 60% of jobs.
Colleges, however, have been slow to catch up. Only 22% of Americans surveyed in a recent Gallup poll say the nation's colleges adequately prepare students for jobs involving technology.
"Most surprising to me is how limited efforts have been by universities to see a relationship between themselves and the students as extending over multiple decades," said André Dua, a senior partner at McKinsey and co-author of the report.
"It's a wakeup call for the need to be more agile in our thinking and our approach to lifelong learning."
Kemi Jona
Associate dean for digital innovation and enterprise learning, Northeastern University
Employers may be a natural fit to provide workers with this type of retraining, the researchers note. The Gallup poll backs that up: Americans ranked on-the-job training as their preferred mode of education to keep up with changes brought by artificial intelligence, second to campus-based programs at universities.
Some colleges have seen that as an opportunity to home in on workforce education. Arizona State University, for instance, launched a for-profit company earlier this year to forge partnerships between employers and colleges.
The university was already known for its partnerships with employers, such as Uber and Starbucks, to provide their employees with a tuition-free education. Other major employers have similar offerings; Walmart provides its workers access to online degree programs from six university partners for $1 a day.
Yet employer-based education falls short of meeting the needs of workers who want to change careers or companies, the report notes. More colleges are adapting to an influx of adult students looking to learn new skills to fuel bigger changes, but their slow pace has left room for alternative education providers to step in.
Ryan Craig, co-founder and managing director of higher ed investment firm University Ventures, contends that a 60- or 120-credit degree program won't help adult workers looking to quickly reskill. "We need thousands of more faster and cheaper pathways to good jobs," he said.
Scaling apprenticeship programs
Nearly 15 million workers between the ages of 18 and 34 are at risk of losing their jobs to automation, according to the report. That's partly because they account for a large share of jobs in food service and retail, two sectors where a high degree of automation is expected.
Half of these young workers are in roles with high turnover, so employers may not be willing to invest in their retraining, the report notes. Alternative forms of postsecondary education, such as apprenticeships, could be a solution.
Momentum has been growing behind expanding apprenticeships in the U.S., in part because the Trump administration has made them a priority. In June, 23 colleges received a total of $183 million from the U.S. Department of Labor to train more than 85,000 apprentices in health care, advanced manufacturing and information technology.
"An apprenticeship requires a willing employer. A big reason we have 7 million jobs unfilled and why 43% of new college grads are underemployed in their first jobs is that hiring friction is worse than ever."
Ryan Craig
Co-founder and managing director, University Ventures
Yet the U.S. lags some countries, Craig said. Those include Germany, where a steady flow of apprentices has helped prop up the nation's strong manufacturing industry.
One of the biggest issues standing in the way of growing America's apprenticeships is employers' wariness of bringing someone on without relevant work experience because a bad hire can be costly.
"An apprenticeship requires a willing employer," Craig said. "A big reason we have 7 million jobs unfilled and why 43% of new college grads are underemployed in their first jobs is that hiring friction is worse than ever."
He sees one solution in firms that hire entry-level workers on a trial basis. Talent Path, for example, hires graduates pursuing technology jobs to work as consultants for companies, which can hire them after two years. (Craig led an investment in Talent Path's parent company, Genuent.)
Bringing clarity to the credential marketplace
As the need for skilled workers grows, so too does the marketplace for alternative credentials. Those options can give workers a way to reskill quickly, the report notes, but there is a lack of standardized information about them.
That can make it hard for workers to understand which credentials have value. In response, several efforts are underway to bring clarity to the marketplace.
For one, Credential Engine, which maintains a digital database of credentials, is working with several credential providers to help colleges and other education providers use a common language to talk about their programs. A similar effort led by the U.S. Chamber of Commerce Foundation, called the T3 Innovation Network, is attempting to make it easier for employers to signal to colleges the skills they need.
Other groups are spearheading credentials specific to a region's needs. The Capital CoLAB — which brings together colleges and employers in the Washington, D.C., metro area — recently launched a shared tech credential offered by several institutions in the region, including Georgetown, Johns Hopkins and Howard universities. Students who earn the credential get priority in job interviews with participating companies.
Martin Kurzweil, director of the Educational Transformation Program at Ithaka S+R, sees the effort as a promising model. "Labor markets and economies are still very regional in nature," he said. "Credentialing that is aligned to the particular circumstances of a region is what's going to provide the most value."
Other companies are developing their own curricula, and in some cases are partnering with colleges to do so. Amazon has teamed up with several colleges to offer cloud computing curriculum. And Northeastern allows students to roll over credentials earned from IBM into certain master's degrees.
Such partnerships can be a boon for colleges, Northeastern's Jona said. "Universities and colleges have to get past the idea that working closely with the private sector is a bad thing or that it somehow tarnishes their brands."
Correction: In a previous version of this article, Kemi Jona was misidentified. He is the associate dean for digital innovation and enterprise learning at Northeastern University. This article has also been updated to clarify that the T3 Innovation Network is led by the U.S. Chamber of Commerce Foundation.
