Report on Technological Disruption in the US Labor Market and its Implications for Sustainable Development Goals

An analysis of the United States labor market reveals a significant technological transformation, particularly within the manufacturing sector. This shift carries profound implications for the achievement of several Sustainable Development Goals (SDGs), including those related to industry, economic growth, and education. The evolution observed in manufacturing provides a model for understanding future disruptions in other major employment sectors, such as healthcare.

Transformation in Manufacturing and Alignment with SDG 9

Case Study: Advanced Shipbuilding and Industrial Innovation

A visit to a Fincantieri shipbuilding facility in Wisconsin illustrates the depth of technological integration in modern industry, directly supporting the objectives of SDG 9: Industry, Innovation, and Infrastructure. The facility demonstrates a move towards sustainable and resilient industrialization through the deployment of advanced technologies.

• Robotic Automation: Robotic welding arms perform tasks like carving massive steel pieces in a fraction of the time required by manual labor, increasing efficiency and productivity.
• Virtual Reality (VR): VR helmets are used to precisely match new construction to pre-existing parts, eliminating the guesswork of paper blueprints and reducing material waste.
• Exosuits: Workers are equipped with exoskeletons to make physically demanding jobs, such as painting, significantly easier and safer, which aligns with promoting safe working environments.

This level of innovation requires substantial capital investment, with Fincantieri investing nearly a billion dollars over 15 years. Such long-term investment in infrastructure and technology is crucial for building resilient industries capable of competing globally and providing stable, long-term employment.

The “Superstar Effect” and Inclusive Industrialization

The dissemination of technology across the manufacturing sector is uneven. A “superstar effect” is evident, where investment and automation are concentrated in standout businesses and specific industries like the automotive sector. Other areas, such as food production and textiles, lag behind. This disparity presents a challenge to the goal of inclusive and sustainable industrialization under SDG 9, as the benefits of technological progress are not being shared equally across all industries or by companies of all sizes.

Evolving Labor Dynamics and the Pursuit of SDG 8

The Shift Towards Decent Work

The nature of factory work is fundamentally changing, impacting SDG 8: Decent Work and Economic Growth. While the number of manufacturing jobs has decreased, the quality of the remaining jobs has improved significantly.

1. Higher Skill Levels: Employees now operate more as engineers and technicians, involved in product innovation, research, and training, rather than as traditional machinists.
2. Improved Working Conditions: Technologies like exosuits enhance worker comfort and safety, contributing directly to the “decent work” agenda.
3. Productivity and Competitiveness: Tech-based productivity increases are essential for high-wage economies to compete with nations that have lower labor costs, thereby sustaining economic growth.

Employment Trends and Economic Growth Challenges

Despite the creation of higher-quality jobs, the overall number of manufacturing positions has stagnated. In 1990, manufacturing was the largest employer in most US states; today, it is the top employer in only six. This trend poses a challenge to the SDG 8 target of achieving full and productive employment for all. The significant multiplier effect of these high-tech jobs—where one Fincantieri position supports eight others in the supply chain and local services—highlights the importance of maintaining a strong industrial base for regional economic stability.

Educational and Supply Chain Imperatives for Sustainable Development

Reskilling the Workforce for SDG 4

The transition to a technologically advanced industrial sector necessitates a corresponding evolution in workforce training, a key component of SDG 4: Quality Education. The skills required for modern manufacturing jobs are vastly different from those of previous generations. Technology itself is transforming the training process; for example, a new welder can be brought up to speed on robotic equipment in days rather than months. This underscores the need for accessible technical, vocational, and lifelong learning opportunities to ensure the workforce can adapt to new industrial demands.

Building Resilient Supply Chains for SDG 12

The importance of maintaining a healthy level of domestic industrial production extends to national security and supply chain resilience. Global disruptions have highlighted the risks of over-centralized production. Fostering robust regionalized economies in the Americas, Europe, and Asia supports SDG 12: Responsible Consumption and Production by creating more sustainable, localized, and resilient production patterns that are less vulnerable to global shocks.

Future Outlook: The Healthcare Sector and SDG Implications

Parallels with Manufacturing

Healthcare has replaced manufacturing as the primary employer in most US states. However, the sector faces significant challenges that mirror the inefficiencies of pre-automation manufacturing.

• High Costs: Healthcare expenditures are rising faster than overall inflation.
• Systemic Inefficiencies: The industry is fragmented and often incentivizes expensive treatments over preventative care.
• Labor Challenges: The sector faces worker shortages and variable training quality.
• Low Technology Penetration: Compared to other industries, healthcare has been slow to adopt transformative technologies.

The Potential of AI for SDG 3

The healthcare sector is positioned for a technological disruption similar to that seen in manufacturing, with artificial intelligence (AI) poised to play a leading role. This presents a major opportunity to advance SDG 3: Good Health and Well-being. By deploying AI and other technologies, it may be possible to improve service quality, reduce costs, and address workforce shortages, making the healthcare system more efficient and effective. In this context, today’s doctors may become the shipbuilders of the future, their profession redefined by the inevitable advance of technology.

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 8: Decent Work and Economic Growth

  The article extensively discusses the transformation of the labor market, focusing on the quality and nature of jobs. It highlights how technology is creating “fewer, but much better” factory jobs that are safer and require higher skills, akin to engineers. This directly relates to the goal of promoting productive employment and decent work for all.

• SDG 9: Industry, Innovation, and Infrastructure

  This is a central theme of the article. The text describes technological innovation in the shipbuilding industry, such as “robotic welding arms,” “Virtual reality helmets,” and “exosuits.” It emphasizes the need for investment in technology (“Fincantieri poured almost a billion dollars in capex”) to upgrade industries, enhance productivity, and ensure national resilience through robust domestic industrial production.

• SDG 4: Quality Education

  The article touches upon the need for new skills and training in the modern workforce. It mentions that employees are now involved in “the training of new workers” and that technology dramatically reduces the time needed to acquire vocational skills, stating “it now takes days rather than months to get a new welder up to speed using robotic equipment.” This connects to the goal of ensuring relevant skills for employment.

• SDG 3: Good Health and Well-being

  The latter part of the article shifts focus to the healthcare sector, identifying it as the largest employer in the US. It points out significant challenges, including a workforce that is “in short supply and less well trained than they should be,” high costs, and inefficient systems. It suggests that technology and AI could address these issues, linking to the goal of ensuring healthy lives and well-being.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. SDG 8: Decent Work and Economic Growth

   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading and innovation. The article’s core argument is that “tech-based productivity increases are the only way for the manufacturing sector… to compete,” citing examples of robotic arms carving steel in “a fraction of the time.”
   • Target 8.5: By 2030, achieve full and productive employment and decent work for all. The article describes the new manufacturing jobs as “much better than they used to be,” more comfortable, and requiring higher-level skills, which aligns with the concept of “decent work.”

2. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.2: Promote inclusive and sustainable industrialization. The article discusses the importance of keeping a “healthy level of industrial production” for national security and resilience, while also noting the shift in the employment map away from manufacturing.
   • Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with… greater adoption of… technologies. The entire description of the Fincantieri shipyard, with its billion-dollar investment in robotics, VR, and exosuits to modernize an “antiquated” industry, directly reflects this target.
   • Target 9.5: Enhance scientific research, upgrade the technological capabilities of industrial sectors. The article highlights that employees were “involved in product innovation, research” and calls for “greater dissemination of technology across industries” to boost competitiveness.

3. SDG 4: Quality Education

   • Target 4.4: By 2030, substantially increase the number of youth and adults who have relevant skills, including technical and vocational skills, for employment. The article points to a shift in required skills, with workers operating “more at the level of engineers than machinists,” and notes how technology accelerates vocational training for welders.

4. SDG 3: Good Health and Well-being

   • Target 3.c: Substantially increase health financing and the recruitment, development, training and retention of the health workforce. The article directly identifies a problem related to this target by stating that in the US healthcare industry, “workers are both in short supply and less well trained than they should be.”

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Manufacturing’s share of employment

  The article provides a clear indicator of industrialization trends by stating, “In 1990, manufacturing was the biggest employer in most states. Today, it’s top only in Wisconsin, Michigan, Iowa, Alabama, Kentucky and my own home state of Indiana.” This can be used to measure progress towards Target 9.2.

• Capital investment in technology

  The article gives a concrete example of investment: “Fincantieri poured almost a billion dollars in capex into its Wisconsin facilities over 15 years.” This figure serves as an indicator for Target 9.4 (upgrading industries).

• Job creation and multiplier effect

  The article mentions that the company “employs 2,500 people” and that “For every Fincantieri job in the region, eight others are supported.” These numbers are direct indicators of local economic growth and employment (Target 8.5).

• Efficiency of vocational training

  An implied indicator for Target 4.4 is the time required to train workers. The article states that “it now takes days rather than months to get a new welder up to speed using robotic equipment,” showing a measurable improvement in training efficiency.

• Health workforce supply

  For Target 3.c, the article provides a qualitative indicator by noting that healthcare “workers are both in short supply and less well trained than they should be.” This points to a deficit in the health workforce.

• Productivity gains

  An indicator for Target 8.2 is the time saved through technology. The article mentions that robotic arms carve steel “in a fraction of the time that hand blasting takes,” implying a measurable increase in productivity.

4. SDGs, Targets, and Indicators Analysis

Source: ft.com