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FWD50 2018 - Digital disruption and the future of work in Canada

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Alexandra Cutean (Information & Communications Technology Council (ICTC))

The presentation will cover topics including emerging technologies, the sharing economy, and the changing nature of work. It will investigate the sharing economy and the increased presence of “gig” or fractional workers, on the Canadian and global economy.

Looking at the increase in non-traditional work (freelance, fractional, part-time and contract) in Canada and around the world, along with the rise of sharing platforms including Uber and Airbnb, the talk will highlight the impact of this changing nature of work on the Canadian economy, on the labour force, and on industry needs.

At the same time, the talk will also investigate these trends from the perspective of inclusivity and diversity; including investigating whether these platforms offer opportunities for underrepresented groups to engage in the economy, how these services can or should be regulated, and if so, who should regulate.

Lastly, it will examine how transitional technologies like AI and blockchain may act to further impact all sectors of the economy, and generate employment opportunities for all Canadians.

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FWD50 2018 - Digital disruption and the future of work in Canada

  1. 1. THE FUTURE OF WORK: THE RISE OF THE SHARING ECONOMY, TRANSFORMATIVE TECHNOLOGIES, AND SHIFTING LABOUR AND SKILL NEEDS IN CANADA PRESENTED BY: ALEXANDRA CUTEAN (DIRECTOR, RESEARCH & POLICY) AT THE INFORMATION & COMMUNCIATIONS TECHNOLOGY COUNCIL (ICTC) DATE: THURSDAY, NOVEMBER 8TH, 2018
  2. 2. ABOUT ICTC š ICTC is a national centre of expertise for the digital economy, with over 25 years of experience providing evidence-based research, practical policy solutions, and innovative talent programs. š ICTC seeks to understand economic trends, employment and skill needs, the impact of emerging technologies, and other key drivers of digital transformation. š Rooted in research findings, ICTC creates talent programs that address industry needs and propel economic growth. 2
  3. 3. SHARING ECONOMY OR GIG ECONOMY – WHAT’S THE DIFFERENCE? 3 There are key distinctions between the sharing and the gig economy. The sharing economy relates to the “sharing or underutilized assets” whereas the gig economy refers to “workplace participation via ‘gigs’”.
  4. 4. SHARING ECONOMY OR GIG ECONOMY – WHAT’S THE DIFFERENCE? 4 šBoth the sharing and gig economy are backed by the online trade of goods and services - and both are at the forefront of transforming businesses. šThere was an estimated 56 million users of sharing economy apps in in the United States during 2017 alone – a figure that is estimated to grow to 86 million by 2021.
  5. 5. SHARING ECONOMY OR GIG ECONOMY – WHAT’S THE DIFFERENCE? 5 44.8 56.5 66.3 73.7 81.2 86.5 2016 2017 2018 2019 2020 2021 USERS(MILLIONS) SHARING ECONOMY USERS (USA) Source: Statistica 2018
  6. 6. WHAT ARE THE BENEFITS OF THE SHARING AND GIG ECONOMY? 6 šPlatforms like Uber and Airbnb help correct market inefficiencies and spur competition among services and goods that are in-demand. šThe sharing economy also has the potential to for economic participation for many who may have been excluded under traditional work structures.
  7. 7. WHAT ARE THE BENEFITS OF THE SHARING AND GIG ECONOMY? 7 Grounded in online platforms, sharing and gig economies also implement “rules of the game” (such as Uber’s and Airbnb’s rating systems) which are easily tracked, recorded and stored via data analytics.
  8. 8. WHAT ARE THE DRAWBACKS OF THE SHARING AND GIG ECONOMY? 8 šThe sharing and gig economy also have some potential drawbacks, revolving around aspects like regulation, workplace conditions, wages and others. šBy its nature, the sharing economy has the potential to exclude, as much as it has the potential to include. That is, those participating as “sellers” or “service-providers” already possess assets like vehicles or properties, to share.
  9. 9. WHAT ARE THE DRAWBACKS OF THE SHARING AND GIG ECONOMY? 9 Drawbacks of the gig economy include the growing “on-demand” nature of work, something that can commoditize skills and eventually diminish the monetary value of certain jobs.
  10. 10. WHAT ARE THE DRAWBACKS OF THE SHARING AND GIG ECONOMY? 10 The gig economy can also open the door to increased outsourcing of jobs that can be completed remotely. By outsourcing these tasks to lower-cost jurisdictions, this can work to decrease local employment prospects, employment and security and drive down wages – contributing to the rise of the “new precariat”.
  11. 11. WHAT DO THESE ECONOMIC CHANGES LOOK LIKE IN NUMBERS? A GLOBAL LENS 11 Globally, the strength of the gig economy has grown substantially over the years. From 2005 to 2015, the presence of on-call, contract, or freelance workers has grown from 10% to more than 15%.
  12. 12. WHAT DO THESE ECONOMIC CHANGES LOOK LIKE IN NUMBERS? A GLOBAL LENS 12Source: JP Morgan Chase, 2016 10.1% 15.8% ALTERNATE WORK ARRANGEMENTS PRESENCE OF ALTERNATE WORK ARRANGEMENTS (GLOBAL) 2010 2015
  13. 13. WHAT DO THESE ECONOMIC CHANGES LOOK LIKE IN NUMBERS? A GLOBAL LENS 13 At the same time, the number of employees staying at one job for more than two years is seeing significant decline, particularly among millennials. 43% of millennials expect to leave their current job in two years.
  14. 14. WHAT DO THESE ECONOMIC CHANGES LOOK LIKE IN NUMBERS? A GLOBAL LENS 14 43% 28% LEAVE WITHIN 2 YEARS STAY BEYOND 5 YEARS MILLENNIAL RETENTION RATES (GLOBAL) Source: 2018 Deloitte Millennial Survey
  15. 15. WHAT DO THESE ECONOMIC CHANGES LOOK LIKE IN NUMBERS? UNITED STATES 15 The presence of freelance workers has risen dramatically in North America in recent years. In 2017, 34% of the workforce was fond to be working as “freelancers”.
  16. 16. WHAT DO THESE ECONOMIC CHANGES LOOK LIKE IN NUMBERS? UNITED STATES 16 40% 27% 18% 10% 5% TYPE OF FREELANCE WORKERS (USA) Independent contractors Moonlighters Diversified workers Temporary workers Freelance business owners Source: Freelancing in America, 2017.
  17. 17. WHAT DO THESE ECONOMIC CHANGES LOOK LIKE IN NUMBERS? CANADA 17 In Canada, the results are very similar. According to the OECD, part time, self-employment and temporary work totaled more than 40% in 2017.
  18. 18. WHAT DO THESE ECONOMIC CHANGES LOOK LIKE IN NUMBERS? CANADA 18 19.1% 8.3% 13.7% FRACTIONAL WORKER BREAKDOWN: CANADA Employed part-time Self-employed Employed on a temporary (contract) basis Source: OECD, 2017
  19. 19. WHAT DO THESE ECONOMIC CHANGES LOOK LIKE IN NUMBERS? CANADA 19 In the European Union, the presence of these workers totaled more than 45% in 2017.
  20. 20. WHAT DO THESE ECONOMIC CHANGES LOOK LIKE IN NUMBERS? CANADA 20 16.9% 15.5% 14.3% FRACTIONAL WORKER BREAKDOWN: EUROPEAN UNION Employed part-time Self-employed Employed on a temporary (contract) basis Source: OECD, 2017
  21. 21. SHARING AND GIG ECONOMY APPLICATIONS & EMPLOYMENT: A GLOBAL PERSPECTIVE 21 The viability of online platforms as a means of employment is clear. While a small figure, in 2016, 1% of the US workforce reported being employed via digital platforms like Task Rabbit, Uber, or Handy. This is 10x the figure of those employed by these platforms in 2012.
  22. 22. SHARING AND GIG ECONOMY APPLICATIONS & EMPLOYMENT: A GLOBAL PERSPECTIVE 22 0.1% 1% EMPLOYMENT BY ONLINE PLATFORMS EMPLOYMENT VIA ONLINE GIG/SHARING PLATFORMS 2012 2016 Source: JP Morgan Chase, 2017
  23. 23. SHARING AND GIG ECONOMY APPLICATIONS & EMPLOYMENT: A GLOBAL PERSPECTIVE 23 Sharing and gig platforms may also be a pathway for underrepresented groups like women to gain alternative methods of employment. Uber reported that of its 12,000 employees globally, more than 35% are women.
  24. 24. SHARING AND GIG ECONOMY APPLICATIONS & EMPLOYMENT: A GLOBAL PERSPECTIVE 24 64% 34% UBER EMPLOYEE GENDER BREAKDOWN Male Female Source: Uber, 2018
  25. 25. TRANSFORMATIVE TECHNOLOGIES DRIVING THE CANADIAN ECONOMY 25 5G: Capable of download speeds up to 20Gbps and a sub-1 millisecond latency, 5G is necessary to drive smart cities, autonomous vehicles, advanced manufacturing, intelligent retail, and connected healthcare among other advances.
  26. 26. TRANSFORMATIVE TECHNOLOGIES DRIVING THE CANADIAN ECONOMY 26 Artificial Intelligence: With widespread application, AI has the vast potential to generate groundbreaking innovations that provide solutions to a variety of current-day challenges ranging from environmental concerns to space travel.
  27. 27. TRANSFORMATIVE TECHNOLOGIES DRIVING THE CANADIAN ECONOMY 27 Blockchain: At the heart of this technology is a distributed virtual ledger coupled with a trusted global consensus mechanism. This speeds up transactions, reduces costs, eliminates the need for intermediaries, and opens new avenues to scale businesses.
  28. 28. TRANSFORMATIVE TECHNOLOGIES DRIVING THE CANADIAN ECONOMY 28 Augmented & Virtual Reality: AR/VR integrates various innovative elements including, design, artificial intelligence and robotics. It can be facilitated for diagnostic testing of new vehicles, planes or other transportation mechanisms, as well as advanced in the healthcare sector, like “super-ambulances” and remote surgeries.
  29. 29. TRANSFORMATIVE TECHNOLOGIES DRIVING THE CANADIAN ECONOMY 29 Advanced Manufacturing: Technological developments in manufacturing like 3D printing is reshaping mass manufacturing, making it easier, more cost-effective and safer to produce materials and products in large volumes.
  30. 30. CHANGING LABOUR AND SKILL NEEDS ACROSS THE ECONOMY 30 With transformative technologies leading much of our economic growth prospects, digital skills are becoming increasingly in-demand. Key occupations include software developers, data analysts, cybersecurity specialists and AI/machine learning engineers, but increasingly all workers will require a blend of digital skills.
  31. 31. CHANGING LABOUR AND SKILL NEEDS ACROSS THE ECONOMY 31 Currently, the OECD estimates that in Canada, 55% of workers aged 16-65 have insufficient basic digital skills to fulfill simple tasks.
  32. 32. CHANGING LABOUR AND SKILL NEEDS ACROSS THE ECONOMY 32 55% 58% 46% 49% 48% 56% 56% 64% 57% 0% 10% 20% 30% 40% 50% 60% 70% Canada USA Australia UK Japan Singapore Germany Korea Israel POPULATION WITH INSUFFICIENT DIGITAL SKILLS FOR BASIC TASKS Source: OECD, 2018
  33. 33. CHANGING LABOUR AND SKILL NEEDS ACROSS THE ECONOMY 33 The demand for digital skills continues to grow in both the traditional economy and gig economy. In 2016, half of Canada’s highest-paying most in- demand jobs were ICT centric.
  34. 34. CHANGING LABOUR AND SKILL NEEDS ACROSS THE ECONOMY 34 šIn Q1 of 2018, UpWork found that 15 of its top 20 fastest growing skills for freelancers were digital, with the demand for blockchain and tensorflow developers growing the fastest. šThe following digital skills grew by more than 400% in demand from Q1 of 2017: blockchain development, TensorFlow development, Amazon DynamicsDB, Computer vision engineering, Microsoft PowerBI, Augmented Reality skills. Source: UpWork, 2018
  35. 35. CHANGING LABOUR AND SKILL NEEDS ACROSS THE ECONOMY 35 Top 20 skills growing more than 130% year over year 1. Blockchain Development 2. TensorFlow Development 3. Amazon Dynamo DB 4. Voice over 5. Subtitling 6. Art direction 7. Content strategy 8. Computer vision engineering 9. Microsoft Power BI 10. Augmented Reality 11. Chatbot development 12. React native 13. Media buying 14. Go development 15. Information Security 16. Scala development 17. Instagram API 18. Adobe Premiere 19. Machine learning 20. AngularJS Development Source: UpWork, 2018
  36. 36. CHANGING SKILL NEEDS IN KEY SECTORS: MANUFACTURING 36 Representing 9% of total employment and over 60% of total exports in Canada, manufacturing is a central sector of the Canadian economy. 3D printing is a technology that will increasingly play a disruptive role in this critical sector.
  37. 37. CHANGING SKILL NEEDS IN KEY SECTORS: MANUFACTURING 37 A recent survey of Canadian manufacturing businesses found that the advanced technologies most frequently used were: CAD, data information integration, and computerized processing and assembly.
  38. 38. CHANGING SKILL NEEDS IN KEY SECTORS: MANUFACTURING 38 46% 34% 27% 16% 12% 10% CAD/CAM INFORMATION INTEGRATION AND CONTROL TECHNOLOGIES COMPUTERIZED PROCESSING AND ASSEMBLY AUTOMATED MATERIAL HANDLING RAPID PROTOTYPING/3D PRINTING ADVANCED ROBOTICS TECHNOLOGIES MOST FREQUENTLY USED BY CANADIAN MANUFACTURING COMPANIES Source: CMA, 2018
  39. 39. CHANGING SKILL NEEDS IN KEY SECTORS: HEALTHCARE 39 In 2017, healthcare expenditure totaled more than 11% of Canadian GDP. Digital technology offers an avenue in this sector for reduced spending through the introduction of interventions to help patients better manage their own progress and/or track their conditions.
  40. 40. CHANGING SKILL NEEDS IN KEY SECTORS: HEALTHCARE 40 šMachine learning may soon replace much of the analysis now done by medical experts. šHealthcare professionals, including nurses and physicians, will increasingly be required to possess digital skills like data analysis, computer literacy, understanding of mobile applications and cloud processing systems.
  41. 41. CHANGING SKILL NEEDS IN KEY SECTORS: HEALTHCARE 41 A recent study by BIOTECH Canada found that access to top talent was one of the most pressing concerns of biotech companies.
  42. 42. CHANGING SKILL NEEDS IN KEY SECTORS: HEALTHCARE 42 57% 32% 31% 23% 16% 11% 0% 10% 20% 30% 40% 50% 60% Access to capital Access to top talent Regulatory challenges Ability to scale-up Access to new markets Canadian tax competitiveness MOST IMPACTFUL ISSUES FACING CANADIAN BIOTECH COMPANIES Source: BIOTECH Canada, 2018
  43. 43. CHANGING SKILL NEEDS IN KEY SECTORS: FINANCE 43 Blockchain may drastically reshape our financial sectors, and with this, create new talent needs and changes. Digital talent working within the finance sector will need to possess not only coding skills, but to also an understand trading technology, analytics, cryptography, database management.
  44. 44. CHANGING SKILL NEEDS IN KEY SECTORS: FINANCE 44 EY’s Fintech adoption index places Canada at 18% adoption in 2017, that figure grew by 10% since 2015 alone.
  45. 45. CHANGING SKILL NEEDS IN KEY SECTORS: FINANCE 45 16% 8% 51% 33% 18% 78% AVERAGE FINTECH ADOPTION - GLOBAL AVERAGE FINTECH ADOPTION - CANADA CANADIAN CUSTOMERS AWARE OF FINTECH FINTECH ADOPTION INDEX: ADOPTION & AWARENESS 2015 2017 Source: EY Fintech Adoption Index, 2017
  46. 46. CHANGING SKILL NEEDS IN KEY SECTORS: RETAIL 46 šWith the rise of online platforms like Amazon, eBay and Shopify, offering customers convenience, speed and variety in their shopping experience, the very nature of retail itself is changing. šThe retail sector will increasingly require the availability of digitally-skilled talent. This includes talent with: content writing and marketing skills, data analytics skills, testing and data collection skills, and search engine optimization.
  47. 47. CHANGING SKILL NEEDS IN KEY SECTORS: RETAIL 47 Ecommerce is expected to continue to grow in Canada, while brick and mortar sales will stagnate. From 2015- 2016 alone, ecommerce sales grew by 15% in Canada, compared to 2% sales growth seen in traditional retail.
  48. 48. CHANGING SKILL NEEDS IN KEY SECTORS: RETAIL 48 $29.6 $34 $38.7 $43.9 2015 2016 2017 2018 SALES(BILLIONS) ECOMMERCE SALES 2015-2018 +14% +13.5% Source: Canada Post, 2018 +15%
  49. 49. CHANGING SKILL NEEDS IN KEY SECTORS: TRANSPORTATION 49 šWith the advent of emerging technologies like autonomous vehicles and societal changes like smart cities, our transportation sector will undergo an overhaul. šThe blend of technologies behind autonomous vehicles will change not only how we think of driving and how we get around, but also the transportation system itself, and the ways in which they function within our cities.
  50. 50. CHANGING SKILL NEEDS IN KEY SECTORS: TRANSPORTATION 50 šThe need for skilled digital talent will be accelerated. A software engineer working on autonomous vehicles would need experience with artificial intelligence, cloud computing services like AWS, and languages like SQL. šICTC forecasts the growth of nearly 35,000 connected and autonomous vehicle jobs in Canada alone by 2021.
  51. 51. CHANGING SKILL NEEDS IN KEY SECTORS: TRANSPORTATION 51 213,300 220,600 222,300 230,000 237,400 248,000 190,000 200,000 210,000 220,000 230,000 240,000 250,000 260,000 2016 2017 2018 2019 2020 2021 WORKERS GROWTH OF AUTONOMOUS & CONNECTED VEHICLE TALENT IN CANADA Source: ICTC, 2018 + 35,000 jobs
  52. 52. PREPARING CANADIANS FOR THE FUTURE OF WORK 52 šAs our industries continue to grow, and become increasingly intertwined in the digital landscape of tomorrow, leveraging and strengthening the supply of digitally-skilled talent to fill in- demand jobs is key. šPost-secondary graduates continue to be a key component of the supply stream of in-demand workers. The enrollment of students in ICT programs has increased by nearly 25% since 2010. However, tomorrow’s graduates need to be equipped with relevant skills and adaptability needed to flourish in the growing digital economy.
  53. 53. PREPARING CANADIANS FOR THE FUTURE OF WORK 53 šThere is substantial value in work-integrated learning experiences. Students who have gained practical experience during their studies are better equipped to provide employers with the pragmatic skills required for the job. šAdditionally, which quickly changing skill needs, short duration training programs are increasingly popular for supply streams from students, to transitioning workers. Leveraging these programs will be useful to stay abreast with emerging skill needs that comes with our changing economy, and opportunities of the sharing economy.
  54. 54. CONCLUSION šNon-traditional work is on the rise. In 2017, more than 40% of the Canadian labour force was employed outside the FT 9-5 structure. šThe sharing and gig economy are growing, with more and more people being employed by apps like Upwork, TaskRabbit, Uber. šThe sharing and gig economy opens up opportunities for economic participation, but also comes with challenges related to regulation, compensation, work conditions, and others. 54
  55. 55. CONCLUSION š5 key transformative technologies are driving employment needs in the Canadian and global technology. šWith these technologies comes the emphasis on digital skills accelerates, but globally and in Canada, a vast number of workers are regarded as having insufficient digital skills for basic tasks. 55
  56. 56. CONCLUSION šDigital skills will increasingly be needed across sectors, with top sectors being Finance, Healthcare, Manufacturing, Transportation and Retail. šPreparing Canadians for the future of work means equipping talent with upskilling opportunities today. Thank you! For questions, please contact Alexandra Cutean at: a.cutean@ictc-ctic.ca 56

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