How to Survive the Fourth Industrial Revolution
The digital revolution threatens to destroy more jobs than it creates. University Technical Colleges should be at the heart of the government’s response
I have believed up to now that technical revolutions create more jobs than they destroy. The power of steam in the Industrial Revolution created more jobs than were lost by hand workers; the car revolution of the 1890s created more jobs than were lost by the horse and carriage economy; and the Silicon Revolution of the 1960s and 1970s created more jobs in simple, clerical administrative work. When I was the Minister for Information Technology in the early Thatcher years I made several speeches along these lines. However, I think the Digital Revolution will not follow this pattern.
Why? First, the pace of technological change is faster than ever. It took ten years for Thomas Newcomen to improve his engine before he showed it to the world in 1712 and its impact on the hand industries was not felt for another 60 years. Today change can come in ten months, ten weeks and even ten days.
Second, the agents of the digital revolution are proliferating. The list is long and already includes artificial intelligence; big data; the mobile internet, cloud technology, robots in industry and the home; the internet of things; driverless cars, lorries and taxis; drones; 3D printers; nano technology; virtual reality; software-based digital therapies and machine learning.
Third, millions of people across the world have access to databases and so experimentation and innovation are not only made in research centres. Significant changes can be made by talented individuals in their homes, garages, offices and factories. It was a comparatively unknown company in Israel which cracked the security code of a terrorist’s iPhone when the FBI had failed to do so.
Fourth, very large investments amounting to billions of dollars are being made by companies in Europe, Asia and America to develop and implement these changes.
The Driverless Economy
Google’s driverless cars have captured the public’s imagination but the true revolution starts with Mercedes’ driverless lorry. There are over 3 million truck drivers in the US and 20,000 vacancies a year, but the introduction of driverless trucks and satellite controlled trains will change all that. Furthermore 8.7 million people are employed in servicing trucking, in roadside snack bars, hotels and service stations. The head of Ford has said that driving with a steering wheel is “as antiquated as wanting to ride a horse”.
The Robotic Economy
A 3D printer in the Netherlands is building a footbridge over a canal by using long robotic arms and lasers to melt the metal powder. No human hands, girders, or metal or concrete foundations are needed. The warehousing of worldwide companies like Amazon and Avon are now largely robotic controlled and the only time that a human hand may be involved in an order is when someone knocks on your door.
How will this affect employment?
Many jobs will be threatened and disappear, but new jobs, particularly highly skilled ones, will be created. There have been several recent studies, including two by McKinsey on “The Disruptive Technologies” which found ‘the nature of work will change and millions of people will require new skills’.
A report for the World Economic Forum at Davos reviewed the challenges facing 15 leading economies and estimated that between 2015 and 2020, disruptive labour market changes would result in the loss of 7.1 million jobs – two-thirds of them in the administrative and office job family – and a total gain of just 2 million jobs spread across several smaller job families.
Andrew J Haldane, Chief Economist of The Bank of England, in a speech in November 2015 estimated that up to 15 million jobs are at risk of automation here in the UK. In the last three months several large and medium sized companies have announced job losses amounting to nearly 200,000. The British Retail Consortium has forecast there could be as many as 900,000 jobs lost in retail alone by 2025. The respected Wood Review of the Petroleum industry has forecast 45,000 more job losses in the North Sea. Since 2010 public sector employment in the UK has fallen by a million posts and a further decline is expected.
All these reports talk about the hollowing out of the middle management. In this scenario highly qualified jobs are numerous and well paid. Low skill and low wage jobs, for example in social care, are similarly numerous but there will be a gap in the middle where skilled jobs used to be, particularly in manufacturing and general administration. Many of these middle income, middle range jobs were filled by graduates who had taken humanities subjects at university.
In Britain today we are experiencing a high level of graduate underemployment. Students studying non-technical subjects struggle to find a graduate-level job. The structure of employment is changing rapidly. As machines take over more and more routine work, paid work at any level will increasingly depend upon non routine tasks. Part-time working is increasingly common, and according to a Bank of England analysis around 4.5 million people – 15 per cent of the UK workforce – are now self-employed. Growth in the rate of self-employment accounted for a third of the increase in total employment in 2010-15. This trend will only continue. The other trend now common and expanding is part-time working.
The working lives of self-employed and part-time workers will result from a set of skills, experience and expert knowledge traded day-by-day and week-by-week working on contracts as short as an hour and in shifting teams. Your office will be wherever your laptop happens to be. You will experience a succession of brief encounters with clients, suppliers, temporary colleagues and collaborators. They are likely to be your income stream. The Baker Dearing Educational Trust, like many charities, has adopted this pattern already. We employ 23 people but only 4 are full time employees, the others are former head teachers, former inspectors, and business people with a training background.
Some call this portfolio working, others the “gig economy” which is now well established in Britain. The Bank of England’s Andrew Haldane paints a vision of hundreds of thousands of micro businesses offering individually tailored services and products personalised to the needs of customers from health and social care, to leisure services and luxury products, all run by what he calls “a new artisan class” of self-employed people.
This ought to have a profound effect upon the nature of education in our country. The American philosopher, author and motorbike mechanic, Matthew Crawford, delivered the Edge Annual Lecture in 2014 and said, ‘If young people are making a tube framed chassis for a racing car, suddenly trigonometry becomes very interesting, they see the point of all the measurements and calculations’.
In other words, knowledge is as necessary as ever but it is not enough. Abstract knowledge and reasoning need to be connected to the real world through practical applications. A play assumes a certain meaning when read silently; more when it is read aloud; and more again when it is performed. The same is true of maths, physics, art and design technology – all come alive when used in a meaningful way.
This is the philosophy behind University Technical Colleges, which I have been promoting for the last seven years. Employers, universities and teachers collaborate to design real world projects undertaken by groups of students over a period of weeks. Each project has a real connection with the world of work and leads to a tangible outcome such as a design, product or presentation and often all three. There are now 38 UTCs open and another 20 preparing to open.
The object of most secondary schools is simply three A-Levels and university. It is believed that a knowledge based curriculum keeps options open while a technical curriculum narrows it. This is simply not true. There is a bias against practical and technical subjects below the age of 16 in our schools. Design and technology is being squeezed out of schools at GCSE and A-Level with entries falling by 20 and 30 per cent respectively.
The Government’s White Paper has reaffirmed their commitment for students to focus on seven academic subjects at GCSE – English language, English literature, maths, two sciences, a modern or ancient language, geography or history, plus possibly a third science. This is word-for-word the curriculum laid down by the Education Act of 1904, though it added three subjects – drawing, cooking for girls, and metalwork or carpentry for boys.
We should not go back to a 19th century diet of academic subjects for all. All young people should make and do things as part of a broad and balanced curriculum.
University Technical Colleges came into being because employers said conventional schools and colleges were failing to equip young people with the breadth of skills, knowledge and personal attributes they look for in new recruits. Ron Dearing and I were convinced that the solution lay in a new curriculum blending traditional academic subjects with technical specialisms and project-based learning. UTC students leave with qualifications and many go on to apprenticeships, and some to degree apprenticeships. Our ambition is that no UTC student will join the ranks of the unemployed when they leave. Our target is 100 per cent. In July 2015 we had 2,000 leavers at 16: 99.5 stayed in education, started an apprenticeship or got a job. At 18, 97 per cent went into further education or work.
Success means more than a set of exams in a league table. Work ready students at UTCs will also have:
- Reasoning skills
- The ability to examine and solve problems
- Experience of working in teams
- An ability to make data-based decisions – they are “data savvy”
- Social skills – particularly the confidence to talk to and work with adults from outside school
- The skills of critical thinking, active listening, presentation and persuasion
- Practical skills: the ability to make and do things for real
- Basic business knowledge
What we have delivered with UTCs should be made available throughout the whole education system with a programme along these lines:
1. Primary schools should teach coding, but many of their teachers have no experience of this: they should be encouraged to bring in outside experts.
2. Primary schools should also have 3D printers and the design software that drives them – pupils will take to them very quickly. The 1981 programme to get one computer into every school, launched by Margaret Thatcher personally, offered a discount of 50 per cent on just one computer. A similar scheme could be launched for 3D printers.
3. Secondary schools should provide the computer science GCSE for at least half of all 16 year olds. Students would then be capable of following an advanced apprenticeship at 16, whereas students who have just taken academic subjects at 16 would find it difficult to locate a company to employ them.
4. Secondary schools should be able to substitute for the foreign language GCSE at 16 a GCSE in computer science, design and technology, or another practical subject. To master a computer language will be more useful in the workplace than a smattering of a foreign language. English is the language for the new technology age.
5. We should reintroduce young apprenticeships at 14 enabling young people to start an apprenticeship alongside the core curriculum. Many of the great inventors of the Industrial Revolution including James Watt, Josiah Wedgewood and Michael Faraday started their apprenticeships at 14.
6. All students should learn how businesses work – marketing, sales, design, customer services, budgetary control, cash flow, profit and loss, partnerships and companies. This will allow students, if they wish, to convert their expertise, knowledge and skills and ideas into an income stream from an early age.
7. Schools should be encouraged to develop a 14-18 technical stream for some of their students covering enterprise, health, design, and hands on skills for example robotics, electronics, graphic design, and material engineering. This would develop into a pathway of success different from the normal route of three A-Levels and university.
8. Universities should provide part-time courses for apprentices to achieve Foundation and Honour degrees – a degree apprentice would have no student debt.