a new future of work: the race to deploy ai and raise skills in europe and beyondmay 2024a new future of work: the race to deploy ai and raise skills in europe and beyondauthorseric hazananu madgavkarmichael chuisven smitdana maorgurneet singh dandonaroland huyghues-despointes about the mckinsey global institute mgi directors sven smit (chair) chris bradleykweilin ellingrud sylvain johansson olivia whitemgi partners michael chui mekala krishnan anu madgavkar jan mischkejeongmin seong tilman tacke the mckinsey global institute was established in 1990. our mission is to provide a fact base to aid decision making on the economic and business issues most critical to the world’s companies and policy leaders. we benefit from the full range of mckinsey’s regional, sectoral, and functional knowledge, skills, and expertise, but editorial direction and decisions are solely the responsibility of mgi directors and partners. our research is grouped into five major themes: —productivity and prosperity: creating and harnessing the world’s assets most productively —resources of the world: building, powering, and feeding the world sustainably —human potential: maximizing and achieving the potential of human talent —global connections: exploring how flows of goods, services, people, capital, and ideas shape economies —technologies and markets of the future: discussing the next big arenas of value and competition we aim for independent and fact-based research. none of our work is commissioned or paid for by any business, government, or other institution; we share our results publicly free of charge; and we are entirely funded by the partners of mckinsey. while we engage multiple distinguished external advisers to contribute to our work, the analyses presented in our publications are mgi’s alone, and any errors are our own. you can find out more about mgi and our research at www.mckinsey.com/mgi. iia new future of work: the race to deploy ai and raise skills in europe and beyond contentsat a glance3context: labor shortages and a slowdown in productivity growth4potential for accelerated work transitions ahead 10the varied geography of labor market disruptions22new skills for a new era 26spotlight: wholesale and retail trade 36spotlight: financial services 38spotlight: manufacturing 40spotlight: healthcare 42implications for the workforce 44enhancing productivity and human capital in a time of technological ferment 52technical appendix 60acknowledgments 651a new future of work: the race to deploy ai and raise skills in europe and beyond 2a new future of work: the race to deploy ai and raise skills in europe and beyond amid tightening labor markets and a slowdown in productivity growth, europe and the united states face shifts in labor demand, spurred by ai and automation. our updated modeling of the future of work finds that demand for workers in stem-related, healthcare, and other high-skill professions would rise while demand for occupations such as office workers, production workers, and customer service representatives would decline. by 2030, in a midpoint adoption scenario, up to 30 percent of current hours worked could be automated, accelerated by generative ai. efforts to achieve net-zero emissions, an aging workforce, and growth in e-commerce as well as infrastructure and technology spending and overall economic growth could also shift employment demand.by 2030, europe could require up to 12 million occupational transitions, double the prepandemic pace. in the united states, required transitions could reach almost 12 million, in line with the prepandemic norm. both regions navigated even higher levels of labor market shifts at the height of the covid-19 period, suggesting that they can handle this scale of future job transitions. the pace of occupational change is broadly similar among countries in europe, although the specific mix reflects their economic variations. businesses will need a major skills upgrade. demand for technological and social and emotional skills could rise as demand for physical and manual and higher cognitive skills stabilizes. surveyed executives in europe and the united states expressed a need not just for advanced it and data analytics but also for critical thinking, creativity, and teaching and training—skills they report as currently being in short supply. companies plan to focus on retraining workers, in addition to hiring or subcontracting, to meet skill needs.workers with lower wages face challenges of redeployment as demand reweights toward occupations with higher wages in both europe and the united states. occupations with lower wages are likely to see reductions in demand, and workers will need to acquire new skills to transition to better-paying work. if that doesn’t happen, there is a risk of a more polarized labor market, with more higher-wage jobs than workers and too many workers for existing lower-wage jobs.choices made today could revive productivity growth while creating b