Upskilling and Reskilling Workforces Key to AI-Powered Future

In 2016, World Economic Forum Founder and Executive Chairman Klaus Schwab declared the arrival of what he called the “fourth industrial revolution.”

“We are at the beginning of a revolution that is fundamentally changing the way we live, work and relate to one another,” Schwab said in his book, The Fourth Industrial Revolution.

According to Schwab, what defines the fourth industrial revolution is the convergence of emerging technologies like artificial intelligence (AI), robotics, autonomous vehicles and the Internet of Things (IoT).

“Many of these innovations are in their infancy, but they are already reaching an inflection point in their development,” continued Schwab, who said the fourth industrial revolution – often called Industry 4.0 – will be especially consequential in the worlds of manufacturing and logistics.

“By enabling ‘smart factories,’ the fourth industrial revolution creates a world in which virtual and physical systems of manufacturing globally cooperate with each other in a flexible way. This enables the absolute customization of products and the creation of new operating models.”

Exactly how the fourth industrial revolution will unfold is anyone’s guess. For workers, however, Industry 4.0 promises to be particularly impactful.

For some workers, there will be challenges: By 2030, as many as 800 million people globally could be displaced by automation, McKinsey & Co. predicts. For others, there will be opportunities: By 2025, automation will create at least 12 million more jobs than it eliminates, the World Economic Forum forecasts.

To turn the potential downside of Industry 4.0 into a powerful upside for the global economy, manufacturers and logistics companies must focus as much on building human skills as they do on acquiring technological capabilities.

New Mindset on Talent

While automation in logistics industry operations and automation in manufacturing industry operations are expected to displace tens of millions of workers from manual labor, they could create even more job opportunities for those with in-demand skills.

Consider the rise of just one Industry 4.0 technology: AI. The global market for AI in manufacturing industry applications is expected to reach $115 billion by 2025, with a 3.5% compound annual growth rate. The rate of growth is expected to increase rapidly as companies embrace automation to improve efficiency, reduce costs and become more competitive in the global marketplace.

While AI could take years or even decades to reach its full potential, companies in the manufacturing supply chain must take steps today to prepare for tomorrow—starting with workforce planning.

“Less than 50% of chief human resources officers are at least reasonably confident in their organization’s workforce strategy to prepare for these shifts,” Schwab reported in his book.

“As a consequence, there is a mismatch between the magnitude of the upcoming changes and the relatively marginal actions being taken by companies to address these challenges. Organizations require a new mindset to meet their own talent needs and to mitigate undesirable societal outcomes.”

McKinsey & Co. agrees and advocates for a “future-of-work transformation” within manufacturing and logistics. “Building digital capabilities is a no-regret move for automation users,” it said in its 2023 report Is Industrial Automation Headed for a Tipping Point?.

“A future-of-work diagnostic and transformation would allow manufacturers to build a detailed view of the most critical skills of the future and identify the gaps they must fill to get there. Hiring, upskilling and reskilling would all be part of the equation.”

While anxiety about automation is real – research has found that workers who are exposed to new logistics automation technology, including robots, suffer from increased job insecurity, along with burnout and poor workplace attitudes—so is the potential for workforce development.

Take Google’s self-driving taxi start-up, Waymo, which says its service eliminates the job of driver but creates several new job roles in its place, like fleet technicians and rider support agents. 

“We launched our early rider program in Phoenix in April 2017, and today, hundreds of riders are using our fully self-driving vehicles to get around every day,” Waymo shared in a 2018 article on Medium. 

“To run this self-driving service, we rely on our local operations teams to maintain our vehicles, manage fleet logistics, and provide around-the-clock support to our riders.”

Embracing Upskilling

Clearly, automation and AI in logistics and manufacturing can create new jobs. What’s needed now are programs that prepare workers actually to fill them.

“Traditional definitions of skilled labor rely on the presence of advanced or specialized education and a set of defined capabilities within a profession or domain of expertise,” Schwab explained in The Fourth Industrial Revolution. 

“Given the increasing rate of change of technologies, the fourth industrial revolution will demand and place more emphasis on the ability of workers to adapt continuously and learn new skills and approaches within a variety of contexts.”

This is especially evident when it comes to in-demand domains like data science, AI, and digital transformation. Because there often are more openings in these areas than candidates, many companies are hiring and training front-line workers to fill the gap, according to Amber Clayton, senior director of Knowledge Center Operations at the Society for Human Resource Management (SHRM).

“[Employers] are upskilling and reskilling employees to enhance their current skills and to learn new tasks to take on new roles, especially where automation may be taking over the tasks of their existing positions,” Clayton told The Forecast.

Worker upskilling in the face of automation is part of a larger trend that started during the pandemic, Clayton said. Because they’re struggling to attract qualified talent in the face of widespread labor shortages, employers are making internal upskilling a key pillar of their talent acquisition strategies “through methods such as in-house or on-the-job training, training through a third party, apprenticeships and mentorships.”

As founder and CEO of Fixency, a data science consulting firm that helps organizations embrace digital transformation and automation, Jame Demmin-De Lise has observed this trend firsthand. 

“In recent years, we’ve assisted a variety of organizations in embracing automation, not just as a job-replacement tool, but as a catalyst for transforming and re-energizing their workforce,” he told The Forecast.

While many companies view automation as purely a cost-saving approach, Demmin-De Lise said the most successful organizations view automation as a force multiplier, capable of boosting production and helping businesses scale without additional cost. 

Ford: Assembling the Future

Among those that have embraced upskilling as a pillar of their talent acquisition strategy is Ford Motor Company, which is tapping its existing workforce to fuel future growth. The automotive manufacturer boasts a successful track record of re-training employees for new roles through its apprenticeship program, which helps line workers develop specialized skills for logistics automation roles.

Ford’s commitment to workforce development is apparent in its BlueOval City project, currently under construction in West Tennessee. The 6-square-mile campus, scheduled to open in 2025, will include facilities to manufacture batteries, assemble cars and recycle spent materials.

Ford is hiring and training 6,000 workers for the new plant by creating a training program to bring residents up to speed. It will support worker training by helping local schools expand STEM curricula, by offering high school students certifications and by building the BlueOval City TCAT, a state-of-the-art training center for warehouse automation workers.

“I’m a West Tennessee native and I immediately recognized the huge impact that this would have,” Jeff Sisk, executive director of the Tennessee Board of Regents’ Center for Workforce Development, told WorkingNation in a 2023 interview. 

“Thousands of high-wage, high-skill jobs will be coming to our area and opportunities for economic success for a group of residents who haven’t had an opportunity like this, ever.”

Ford isn’t alone. Multinational companies like Amazon, Heineken and Honeywell have all made news recently for their internal training programs, with many small and medium-sized businesses following their lead.

When upskilling is done well, the benefits are as powerful for workers as they are for employers, according to Demmin-De Lise, who described how one of his clients—a logistics and warehouse business—made the decision to embrace upskilling as a cornerstone of its automation plans.

“They initially faced displacement of a significant part of their workforce due to the incorporation of automation. We helped them re-envision this disruption not as a setback, but as an opportunity for growth,” he said. “This company now has an ongoing training program in place that repurposes the skills of their manual laborers, turning them into qualified overseers of their newly implemented automation systems.”

Marcus Taylor has worked as an executive and thought leadership writer for the information technology industry since 2016, specializing in SaaS, healthcare IT,  cybersecurity and quantum computing. He is reachable through his website, mtwriting.com.

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