The Digitalization Of The Auto Industry

Source: Harvard Business Review

Source: Harvard Business Review

General Motors recently announced that it would cut over 14,000 jobs in Canada and the United States. While the layoffs are reportedly due to business-cycle adjustments and possibly slowing demand in key markets, the layoffs are definitely a sign of the incoming disruption that the company's current transition from analog to digital will bring. The digitalization of the auto industry, which is also occurring in nearly every other industry, has resulted in a massive reorientation of the workforce needs of companies like GM. The layoffs and eventual future hirings are likely evidence of the acceleration of GM's response to the diffusion of technology driven changes in their industry and the need to adjust its labor force to it. 

Over the last 15 years, the digital content of work in the auto industry has soared as consumer electronics, battery and electric powered drivetrains, IT, and autonomy place new demands on auto companies and their workers. In fact, the fastest growing occupations in the auto sector as of 2016 have been software developers and computer network support specialists. The occupations which have seen the fastest decrease as of 2016 have been sheet metal workers and drilling and boring machine operators. Evidence of this can be seen in one of GM's statements last week which noted that their transformation "includes adding technology and engineering jobs to support the future of mobility, such as new jobs in electrification and autonomous vehicles." This shift in the layoff decisions and hiring needs of the auto industry is only likely to continue in the future as many jobs in auto-sector jobs are highly susceptible to automation over the next 10 to 15 years.

It is vital that companies, industries and nations respond to the diffusion of digitalization by embracing the changes technology brings and increasing their investments in digitally focused training (re-training) and education in order to empower workers to be a part of the change. 


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