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What McKinsey & Co, Bill Clinton adviser and top business are saying about automation

Automation promises significant sustainability upside in waste reduction and efficiencies. McKinsey & Company says the rewards are also strongly financial. But if we’re complacent, argued John Podesta, former Chief of Staff to US President Bill Clinton John Podesta at an event at UTS on Monday night, some people will get left behind.

According to former Chief of Staff to US President Bill Clinton John Podesta there’s no room for complacency with the rise of artificial intelligence, robotics and other automation technologies. These are trends that could leave some people behind if the transition isn’t managed carefully, he said.

Podesta was part of a panel of experts at a University of Technology Sydney event on Monday night, based around a McKinsey & Company report, Australia’s Automation Opportunity. 

The report says the nation stands to reap an additional $170-$600 billion in annual GPD if it experiences “midpoint to rapid” automation adoption. 

That’s a 50-150 per cent increase in average annual productivity growth compared to the baseline, and $4000-$15,000 additional annual income per person by 2030.

The report offers two overarching suggestions for policy makers, employers and educators: to accelerate automation because Australia is falling behind other nations; and support workers through job and skill transitions.

Mr Podesta, who is also the former special advisor to President Barack Obama, chair of President Obama’s transition team and chair of Hilary Clinton’s 2016 presidential campaign, said that although there are benefits to automation it could also be “extremely disruptive.”

“One of the findings in the report was that social inequality will grow in Australia, and this is true in the US too, if we don’t create the right policy environment to succeed,” Mr Podesta said.

“Unless you are thinking overall how to build a sustainable and just economy, then I think these technologies have the capacity to overwhelm the social conversation because those who made $100 million wants to keep making $100 million.” 

The regions could be hard hit

The automation report found that the disruption impacts of automation will also hit some areas worse than others, with regional areas seeing a higher proportion of jobs experiencing disruption in sectors such as mining and agriculture.

“We think there is a role of government to think about how we make this transition in regions,” McKinsey & Company senior partner Charlie Taylor said.

For instance, the retraining and reskilling could be more targeted to each situation, he said.

Universities also have a key role to play in managing the transition. Attila Brungs, vice-chancellor and president of the University of Technology Sydney, said that most universities (including UTS) are already making the transition to a life-long learning model “so that people get the education when they need it.”

Representing the business world on the panel was Diane Smith-Gander, non executive director at AGL Energy, Wesfarmers, Committee for the Economic Development, Keystart Loans and Norton Rose Fulbright, and chair of Safe Work Australia. 

She acknowledged that business has never fared well in this conversation as the assumption is that businesses are generally willing to get rid of people.

But she says that corporations actually have the most to benefit from reskilling and retraining workers.

Ms Smith-Gander said that although support from government is necessary, corporations are best placed to retain staff because they know them best.

Amazon, for example, has offered to cover 95 per cent of the cost of vocational training courses to help its warehouse staff pursue jobs in other careers.

From a sustainability perspective, automation is expected to increase efficiency among other benefits such as making work safer and freeing up opportunities for people with disabilities.

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One Response to “What McKinsey & Co, Bill Clinton adviser and top business are saying about automation”

  • Al says:

    Absolutely bizarre that anyone would think John Podesta would know anything about this stuff, let alone invite him to speak on it with authority. He famously handed the 2016 election to Trump by misreading data on the electorate and misallocating resources.

    You could honestly say he is famous for misunderstanding technology and its place in the modern world.

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