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Black and Gray, Not Green: The Future of Jobs

Feb 22, 2011
This article is part of a series called News & Trends.

We need jobs, and lots of them: unemployment is dropping but it’s a long road back to the days of 5% unemployment, and we’re not going to get there for a very long time. So where will the jobs come from? The old standbys of healthcare, IT, and education, will continue to add jobs, but there are more interesting and less obvious areas that will spur job creation.

Perhaps the most interesting are in energy, manufacturing, and robotics.

Energy

Let’s start with energy. Most of the jobs growth will be related to coal (yes, coal … that dirty, black stuff): getting it, burning it, and capturing the carbon emissions. It’s easier to get to than oil; it’s more abundant; and we need it. The two leading economies of the world — the U.S. and China — are heavily dependent on coal as a source of energy. The direct costs of coal are far lower than those of the alternatives in most circumstances. Coal provides 46% of the energy consumed in the United States today, and while oil is a major source, much of it comes from places that cause the price to fluctuate too much, creating uncertainty for business. By contrast, the U.S. is a net exporter of coal. Energy companies and others are making vast investments in technology to get more energy out of coal, clean the emissions from power plants, and even convert it to a liquid fuel.

Nuclear plants and the jobs associated with them — construction, operators, engineers, technicians, etc. – are another area related to energy that will generate jobs. Some 60 reactors are under construction worldwide, with that number expected to double in the next decade, including about 20 that are planned for the U.S. American companies are the dominant suppliers of components and expertise for building and operating these.

Now to alternative energy: wind, solar, etc. Well, don’t hold your breath for a lot of green jobs. There are virtually no commercially viable green technologies in existence. Three recent examples can illustrate why green energy is a pie in the sky for now. Range Fuels, which failed despite $400 million in funding, half of which came from the government; Evergreen Solar, which recently closed its doors after $685 million in losses and $60 million in taxpayer support; and finally the failure of T. Boone Pickens’ wind power venture ($2 billion). The simple fact is that green technologies are still in their infancy and incapable of producing jobs in any meaningful quantity (except for liquidators) without being subsidized by the government. All those Chevy Volts and Nissan Leafs are going to have to be charged by energy from plants burning coal.

Robotics

Robots are going to be getting popular a whole lot sooner than we may expect. The big reason is caring for an aging population in developed economies. There will not be enough healthcare workers to help all those who need care and for increasingly longer periods, as life-spans keep increasing. Increasing immigration is an option, but unlikely, so that leaves robots to fill in. This is not science fiction: it’s already close to reality in Japan.
Within the next few years, Japanese companies will start marketing robotic home healthcare aides that can lift a person in and out of bed and perform tasks around the house. A Japanese company has produced a robotic nurse with realistic features and skin that mimics human behavior. Initially it will observe patients, collect data, and gauge patients’ reactions. It’s inevitable that we will see these here. That will spawn a huge new industry and by some estimates several hundred thousand new jobs in production, sales, maintenance, and support. And if you’re thinking of more recreational uses for robots then there are already production models of those.

Manufacturing

It may seem counterintuitive or absurd to suggest that manufacturing will be a source of job growth, but in the longer term we can expect that to occur. As developing economies — mainly India, China, and Brazil — continue to develop, they will have less of a cost advantage.
We’re already seeing the cost advantage being eroded as salaries continue to rise by 8%-10% annually in these countries. Products that could be produced in China move to Vietnam, and call centers in India move to the Philippines in the short term, but these countries do not have the capacity to take on even a fraction of the volume needed.
The second reason is that India and China will increasingly be forced to turn inward to serving their own internal markets rather than be able to export as much as they do today. Put these together and it seems obvious that some manufacturing will return, there not being enough sources of supply overseas.

Then again, maybe it’ll be done by robots.

This article is part of a series called News & Trends.
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