Adam McCullough: I'm Adam McCullough, passive manager research analyst with Morningstar. We're here at the 2017 Morningstar ETF conference. Alongside me is Joe Davis, from Vanguard. Joe is Vanguard's global chief economist and head of the Investment Strategy Group.
Joe, thanks for being here today.
Joe Davis: Oh thanks. Thanks, Adam, thanks for having me.
McCullough: Absolutely. So the first question is, yesterday in your keynote presentation, you mentioned that jobs don't get automated, tasks do. Can you kind of expand on what you mean by that, and what the world looks like, going forward with the future of automation and technological disruption?
Davis: One of the reasons why we focused on, we certainly wanted to take a step back and say, "What is going to be the defining trend that will impact the global economy?" Not just the United States, but the global economy, for the next decade. There's a lot of topics that come up--globalization, demographics, but we really have zeroed in on technology, and we view it as a period of disruption, not one of stagnation. But we think that there's going to be a growing sense of automation anxiety going forward, and so we wanted to kind of take a step back and really look into what's going on in the labor market. That's where our research really shows that one has to focus on tasks as opposed to jobs.
I think that automation is misunderstood, so three things come to mind. One is that, you know, jobs don't get automated the way tasks do, which means that technology will unlikely automate away the vast majority of jobs. Some occupations will continue to come under pressure the next decade. That's actually a necessary condition for us to see an improvement in living standards and productivity--which the past five years we really haven't had in the measured statistics. Then secondly, occupations have always evolved over time and so thinking around tasks in our own daily lives--just think of (our) job 10 years ago and how the tasks we do to do our jobs has changed. And so we zeroed in on that in terms of the presentation.
McCullough: That was helpful. I mean, you kind of laid out where we have less of the maybe the routine, or the basic tasks that we do, that are being sent to the robots, if you will. And then we could focus more on the higher level parts of the job, which is, I think, better for everyone going forward.
In the presentation, also you mentioned that you have some skills that you want your children to learn to be productive going forward in the workplace. I think we all could also want to know what those skills are, so we can be productive in our careers going forward. Do you mind touching on what those skills are and why you think they're the most useful going forward in the workplace?
Davis: I would say there's, although we identified, of the 40 or so broad set of tasks that can characterize any occupation, three in my mind, I would say, are the most robust, and will be in the most demand over the next 10 years, regardless of where one sits in the world.
One would be around creativity, so creative intelligence. It's actually the number-one requirement for over 700 occupations in the United States, so it's broad-based. It's not just artists and engineers, although it's important for that. So it would be creative intelligence would be one.
Secondly would be, what I would call technology acumen, so the familiarity, the ability to embrace technology rather than avoid it. And that would be for a host of occupations. And I think that ties into my message around lifelong learning. That education going forward will increasingly be outside the classroom, not just inside the classroom.
And finally would be what I call emotional intelligence. IQ is always very important, but increasingly EQ is as important in an economy where a lot of the sort of repetitive, sort of processing and accessing information will increasingly be automated. So emotional intelligence, such as managing others, relating to others, things that are actually very important in fields of management and other fields of the economy.
So those are three areas that when I think of my children, again as a parent, are just as important as perhaps what major they may study in school someday. It's thinking about those skills and how they may apply them in the workplace, regardless of their field of study.
McCullough: Right. So they're very transferrable to any occupation, going forward.
Davis: Yes, yes.
McCullough: It's hard to automate emotion.
Davis: Yes, it is!
McCullough: It's tough. Well it's a brave new world. We appreciate your time and comments today, and thanks for being here.
Davis: Oh thank you, Adam, thanks for having me.
McCullough: Absolutely. For Morningstar, Adam McCullough.