PwC: Digital era shaping jobs and UK labour market

24 March 2015 Consultancy.uk

The greatest increase in new UK occupation titles between 1990 and 2010 were in digital occupations, according to PwC, with the proportion of the workforce employed in occupations whose title came into existence after 1990 growing to 6% across the UK. Although digitalisation has created numerous jobs in the past 10 years, the report also highlights that in terms of the future, long term employment growth is set to decrease between 2014 and 2024 compared to the period from 2004.

Digital technology is transforming many aspects of human society, from mobile connectivity on the go to the way we shop. In a recent report from PwC, the positive changes to employment from the changes are considered.  The research was completed in association with Carl Benedikt Frey of the Oxford Martin School at Oxford University, and is titled ‘New job creation in the UK: which regions will benefit most from the digital revolution?’. The study looks at the new job titles that have come into being in the last decades, with most related to digitalisation, as well as look at the proportion of UK workers now employed in position opened up by digital technology. 

Top 10 new occupations

New occupations
Of the new occupational categories added since the computer revolution starting in the 80s, 8 out of 10 saw the strongest increase in new job titles related to digitalisation. Of new job titles coming into existence in an occupational category between 1990 and 2010, Computer Software Engineers saw an 80% increase, Database Administrators a 78.6% increase, Network and Computer Systems Administrators 78.1%, while Computer Hardware Engineers saw a 50% increase in new job titles since 1994. In terms of where the new positions have been created, primarily professional and associate professions positions are seeing the increase of a digital workforce, making high-skills key to success in this transformation.

While a whole host of new occupations have sprung into existence, PwC notes that technology is not only creating new – often high skilled – employment but is also making occupations redundant in the process. This observation is shared by Deloitte, which recently reported that automation could see a third of UK employees lose their job. With at issue that many of the new tech start-ups have created relatively few new jobs, compared to the giants of the early computer revolution. For instance, Facebook for its huge disruptive force only has around 9,199 employees after 11 years of existence.

Employment in new types of jobs

Employment growth
In terms of the positive effect on employment generated from the revolution, in 2004 5.5% of the UK workforce was employed in job titles that did not exist in 1990, which by 2014 had grown to 6%. While the UK-wide picture has 6% of the population in a tech job, there are significant regional differences. Particularly Central London has a considerable number of people employed in tech, with the Northern Region the fewest. In 2004, the number in the Central London area was 8.2% of workers, with the lowest proportion, at 4.1% in Rest of Northern Region. By 2014, Central London stood at 9.8% of all employment while Rest of Northern Region was up above 5%. The only area to see a decrease was the Rest of Yorkshire & Humberside, which witnessed a small decline from 4.8% to 4.6%.

Proportion of workers in new types of jobs


The digital future
PwC explores the trend from 2004 in employment growth and the share of new types of employment, using a simple ordinary least squares (OLS) regression. The firm examines the statistical relationship between new work creation and employment growth, to project a possible future for the UK employment market. The main finding, according to the report, is that the share of new types of jobs in 2004 is a statistically significant predictor of subsequent total employment growth in a region. The researchers further find that the share of new types of jobs can explain about 50% of the variation in employment growth across UK regions over the last decade.

According to the projection, employment levels in Central London that have grown 35% between 2004 and 2014 will grow a further 25% in the coming decade. Inner London (excluding the Centre) has grown 20% since 2004 and will grow 12.5% in the coming decade. Northern Ireland too has seen significant gains in recent years, with an around 14% gain since 2004 and expected growth of around 5% in the coming decade. Over every region, growth of between 5-10% is projected, with Rest of Yorks & Humberside showing the least movement at around 2.5%.

Projected employment growth UK regions 2014-2024

Commenting on the results, John Hawksworth, Chief Economist at PwC and co-author of the research, says: “Employment is projected to grow more slowly than in London in other regions, but some show notable accelerations in projected growth over the next decade as compared to the past decade, including Greater Manchester, West Yorkshire, Merseyside and the West Midlands.” Frey expresses his concern that infrastructure bottlenecks in the London region might influence the capital’s ability to foster further growth. To solve this, “increased investment in transport infrastructure is needed to facilitate continued diffusion of new jobs across regions, while also making sure that the growth of London is not constrained by the supply of housing.”

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Four ways digitalisation is transforming car brands and dealers

16 April 2019 Consultancy.uk

From changing expectations from the customer to new stakeholders entering the industry, the digital transformation of global automotive industry means it is facing the wholesale transformation of its business model. In a new white paper, global consulting partnership Cordence Worldwide has highlighted four major digital trends that are transforming the relationships between car brands and dealers with consumers.

With digital transformation drives booming across the industrial spectrum, automotive groups are no different in having commenced large digital transformation programmes to improve productivity, efficiency, and ultimately profitability. Falling sales figures mean the automotive sector is facing an increasingly difficult road ahead, something which means companies in the market are even more hard pressed to find new ways to improve their bottom lines.

While it offers major opportunities, the industry’s move to digitalise is not without complications. It has triggered a series of major internal changes, which have presented automotive entities with the challenge of becoming a “customer-oriented” industry. A new report from Cordence Worldwide – a global management consulting partnership present in more than 20 countries – has explored how automotive companies are navigating the rapidly changing nature of digital business.

New business models

The level of change likely to be wrought on the automotive industry by digitalisation is hard to overstate. Automation could well lead to significant reductions in the number of accidents, higher vehicle utilisation and lower pollution levels, while leading to a $2.1 trillion change in traditional revenues, with up to $4.3 trillion in new revenue openings arising by 2030.

As a result of this colossal opportunity, it is easy to see why almost all automotive groups now have digital departments, with generally strong communication within the digital transformation and the customer approach. The changes to society which this may have are potentially distracting automotive firms from the change it is leading to in its own companies though, according to Cordence’s paper.

The automotive market is dead, long live the mobility market

Because of this, the sector’s business model is set to transform over the coming decades. With digitalisation speeding up the appearance of concepts such as car-sharing, a subscription package model will likely become more palatable. At the same time, car and ride-sharing models will cater to the sustainability criteria of millennials, who will rapidly become one of the automotive market’s leading consumer demographics in the coming years.

Antoine Glutron – a Managing Consultant with Cordence member Oresys, and the report’s author – said of the situation, “These ‘old school industries’ are now working on creating new opportunities, but in so-doing are facing challenges and threats: new jobs, new technologies, new ecosystem of partners, necessary reorganisation, different relationship with customers, and even new businesses. The customer approach topic is in fact a real challenge for car companies as it implies changing their business model and adjusting their mind-set to address the customer 4.0: from product-centric to customer-centric, from car manufacturer to service provider.”

Digital customer experience

In the hyper-competitive age of the internet, even top companies face an uphill challenge when it comes to holding onto customers through brand loyalty. Digital disruption has resulted in changes to consumer behaviour, which is forcing a range of marketing strategists to reconsider their old, possibly out-dated strategies. As modern customers wield an increasingly impressive array of digital tools and online databases, they and are now able to quickly and conveniently compare prices, check availability and read product reviews.

The automotive sector is no exception to this trend, according to the study. In order to adapt to the needs of the so-called ‘customer 4.0’, car companies will increasingly need to change their business model and move away from product-centric companies to customer-centric ones, from car manufacturers to service providers.

Glutron explained, “As an automotive company, you can no longer expect customer loyalty simply with good products; you must conquer and re-conquer a customer that “consumes” your service. The offer now has to be global, digital and personalised. Your offer has to be adapted to this customer’s needs at any given moment. A key issue related to data control is to build customer loyalty by creating a customer experience 'tailored' throughout the cycle of use of the 'car product': purchase, driving, maintenance and trade-in of the vehicle.”

One way in which the sector may be able to benefit from this desire for a tailored experience is via connectivity. Consumers are generally positive about new connective features for automobiles, and many are even willing to pay upfront for infotainment, emergency and maintenance services. Chinese consumers, where the connected car market is set to hit $216 billion, are already particularly interested in paying a little more for navigation and diagnostic features in their future new car. This can also enable automotive companies to exploit a rich vein of customer data, enabling them to rapidly tailor their offerings to consumer behaviour.

New automotive segments

Digital transformation has also brought with it the rise of completely new application areas. As mentioned earlier, the most well-known example is the autonomous or self-driving car, where the last steps forward were not taken by major automotive groups but by technology companies such as Tesla. While this may have given such firms the edge in the market briefly, a number of keystone automotive names will soon be set to take the plunge into the market themselves, leveraging their car manufacturing prowess and huge production capacities to their advantage.

Before companies rush to invest in this market, however, it is worth their while to remember that the readiness and uptake for such vehicles differs greatly geographically. For example, following a study published in 2018, 92% of Chinese would be ready to buy an autonomous car, compared with only around 35% of drivers in France, Germany and US. Meanwhile, the infrastructure of different nations will also be significantly less accommodating of the new technology.

Use digital for steering thr activity

Elsewhere, Cordence’s analysis has suggested that hooking the cars of tomorrow into the Internet of Things is also likely to see a rapid change in the business model for car maintenance, providing real-time diagnostics for problems. This presents chances for partnerships to improve the connectivity of cars, especially with tech companies; for example, PSA partnered with IBM for a global agreement on services in their vehicle. Meanwhile, data could also be sold to other parties with an interest in this data, such as the government, which could use it to manage traffic levels, or ensure that only adequately maintained vehicles take to the road.

Glutron added, “With the increase in the amount of client data and connected opportunities, the recommendation is to set up data-centric approaches. The value is now in the customer data. The general prerequisites are to rework the data model and the Enterprise Architecture and generally build up a data lake including data from all sources (internal and external, structured and unstructured).”

From automotive to mobility

Relating further to the idea of connectivity, the report claimed that automotive firms must now adjust their models in line with the provision of end-to-end mobility, rather than treating the sale of a car as an end point in their relationship with the customer. In order to realise this transformation, transformations are likely to become more and more important.

A network of partner companies means automotive firms can provide a global mobility experience. As the vehicle is increasingly connected to its environment, new partners can also be cities, governments, and other service providers within the global mobility services industry in which the car brands want to take part.

According to the study, the target is clear. Companies must look to a holistic transport service, offering to move customers from A to B in a unique and pleasant way – otherwise they might as well take public transport. At the same time, they should extend the services reachable “on-board” (especially the enhancement of the connectivity between the car and smartphones or other connected devices), and reach high standards in terms of user experience (online sales, online payment, customised experience during and after the use of the car).

Concluding the report, Glutron stated, “These mobility market transformations could be considered a threat for the car manufacturers. Quite the opposite: if they take up the challenge and review their business model so that they become the service provider – communicating no longer to a driver but to a ‘mobility customer’ – they can then take advantage of their expertise and their position as a historical player. The most convenient means of transport are cars, and building a car is highly-skilled work.”