11 Mar The Questions Students Have About Careers in Oil and Gas
What are today’s students asking about the future of work in oil and gas, and how should they prepare for a job world that will be very different?
Not Your Mom’s (or Dad’s) Job
Pity today’s student cohort thinking about a career in oil and gas. It’s dawning on them that oil and gas no longer offers a job for life. They’re watching their parents, or their friends’ parents, or older siblings, toil for years in highly paid jobs only to be shuttled to the curb without warning when oil prices collapse. They see some in their ranks, those with digital chops and excellent timing, achieve extraordinary early life success as digital entrepreneurs. They run their own lives in a world that blends reality and digital into a seamless experience, and wonder about the directions digital is taking as they enter the world of work. They struggle with guessing where to place their career bets.
Recently, I was contacted by Bryce, a business student from one of the local universities, about the future of work. His pitch was that he was seeking expert opinion into the future of work, but frankly, it was equally about personal career research. Fortunately, he gave me his questions in advance, and I wrote down my remarks, which provide the body of this post.
Question 1 — Timing of Digital Impact
We hear on the news and read about it in the internet but how quickly is automation on its way?
Firstly, let’s distinguish between “automation” and “digital innovation”.
Automation has been a fixture of the industrial world since the 1970’s and 80’s when manufacturing businesses adopted SCADA systems to replace human operators on the shop floor. In that sense, automation is already here, and a generally accepted feature of our industrial landscape.
Digital innovation, which includes data assets, cloud computing, internet of things, artificial intelligence, autonomous technologies, agile development and deployment, and better user experiences, is here too, but is unevenly distributed. By that, I mean that it’s a feature of some industries already, and has yet to have much impact on others.
The three components of digital (the digital trinity of data, compute and connectivity), are also growing individually at exponential rates typified by Moore’s Law, which forecasts a halving of costs every 18 months.
Few processes can withstand the wave of change, particularly those processes that have not experienced much change recently. The digital trinity creates the conditions to reimagine work processes using effectively unlimited data/compute/connectivity at near zero cost. And while an incumbent business might not want to upset their own apple cart, some entrepreneurial upstart will not hesitate.
Silicon Valley has also perfected the art of scaling new solutions and business models—Uber entered 84 country markets in 24 months.
Question 2 — Job Impacts
Just how drastic a shift will automation have on the job market?
In the same way that SCADA systems eliminated the role of shop floor operator (while creating other jobs like control room technician and data analyst), digital automation will alter, transform, and frequently eliminate jobs that up to now have been unimpacted by the digital trinity.
It’s very difficult to forecast what the specific impacts will be—who could have forecast that we could pay for coffee using a watch? Any job that includes a lot of math, routine decision making, the application of codified rules, the interpretation of data, will have to cope with change. Jobs that involve the manual control of equipment are also ripe for displacement—basically, any job that has a padded seat for a human backside, a set of controls manipulated by human arms and hands, and reliant on human eyesight for guidance, will slowly disappear.
Whole classes of jobs will vanish, but they will be replaced by other types of jobs. For example, China is the world’s largest market for industrial robots, and China reports huge job shortages for robot supervisors (some 3 million vacancies).
Question 3 — Concentration of Impact
Will we see automation only focused on specific sectors or will we be surprised at just how far automation can be implemented in our society?
The digital trinity is affecting all sectors at the same time. Healthcare, public sector, financial services, energy, manufacturing, services, retail, logistics, resources, and science. These technologies are not specific to industries, they migrate easily from one sector to another, and they present few barriers to entry. Many processes and business models in our society have not experienced much change at all in many years.
Take brick laying, for example. If there ever was a manual industrial process, laying bricks would be it. Teleport an Egyptian bricklayer from the time of the pyramids, and with a bit of training, they would feel right at home laying bricks today. Yet entrepreneurs have already built the first generation fully autonomous brick laying robot, capable of building passable simple brick walls at speed, without break, without error, hour after hour.
Question 4 — New Job Creation
In times when technology causes such rapid change, we hear the mantra of ” technology creates more jobs than it replaces”. Is this true?
In my view, this appears to be true, and has held true through many different technology shifts throughout the ages. The degree of change now is more significant and more widespread than we have witnessed in the past, so the sheer number of displaced workers may potentially overwhelm our human ingenuity to find new productive uses for those workers.
But trying to get clarity on what jobs will be created is a challenge. Humans can’t easily visualise the future of work. Western society relies on the education sector to create the curriculums and train up for those workers, and they’re good at it. But with all sectors transitioning at the same time, the educational sector doesn’t have much time to figure out what skills to deliver for the future.
Question 5 — Impacts on Oil and Gas
The oil industry has always been an early adaptor of technology. Will automation change the industry?
Automation has already changed the industry for the better, by bringing SCADA systems into play to supervise dangerous industrial processes. Equally, digital innovation will have dramatic impacts on the oil and gas industry. Early successes suggest 500-600% return on investment, payback times measured in weeks (not months), cash flow productivity gains that are better than trying to extract more hydrocarbons. I anticipate significant job dislocation as robots, artificial intelligence and internet of things transform whole process areas.
Question 6 — Preparing Calgary and Alberta
How can we prepare Calgary and Alberta for this coming shift?
There are many changes that would help. Educational systems need to embed much more digital content in their curriculums (but that implies dropping some current content out). Capital markets need to invest more in digital start ups (but oil money doesn’t quite understand fast cycle digital change). Oil companies need to get smart on digital (but who will they learn from). Start ups need more opportunity in oil industry (but the industry prefers its legacy investment areas).
Question 7 — Preparing as Future Workers
Are there ways in which we can focus our existing skills and training to further insulate ourselves as automation becomes more advanced?
I don’t believe that deepening one’s skills in the areas of the present will provide adequate insulation from potential disruptive change in the future. I would instead broaden training and exposure to these new technologies and try to target job roles to those areas where you can gain more exposure to the technologies of the future. Join a start up. Get onto a company internal project focused on some digital innovation. Take a course in robotic process automation, agile, blockchain or AI.
Question 8 — Collaborating With Automation
Should we be focusing on trying to create more of a cooperation between humans and automation to ensure jobs?
Quite right. Today when we create a ‘job’, we start with putting a human in the center and then figuring out what technology will make the human more effective in the job. In the future we will put a robot or an AI solution in the job, and we’ll look for the ways a human can enable that AI to be more effective.
As you can see, we will need the skills required to make AI and robots more effective in their jobs, which are not necessarily the skills we have today.
Question 9 — The Role of Government
Do you think the government is doing enough to prepare for the coming transition?
In general, no. Governments are captive to the pressures of the present (today’s unions, today’s legal system, today’s resources). Most governments do not set out a vision for their jurisdictions that anticipate a dramatic shift in their economies. It makes for bad politics with the incumbents. Unfortunately, without clearly stating what they see as the target future world, governments and educators cannot then plan any transition.
Fortunately, a number of Calgary’s civic leaders are now working very hard to support the creation of a new entrepreneurship focused on digital innovation.
Question 10 — Policy Responses
What can the government do to be more proactive in helping to make sure that people are being trained properly to adapt to the coming shift?
The role of government, in my view, is to create the conditions for human flourishing. I would have the government enable people can make the right choices to chart their own careers. For example, governments might change the rules for the RRSP program—any RRSP monies withdrawn ahead of retirement but used to allow an adult to return to school would be not taxed.
Question 11 — Educational Response
Can schools and place of education be more progressive in what they teach, so students will thrive in the coming future?
Certainly. The schools need to make several changes. The process to create, sanction and launch new accredited educational content, in light of how quickly digital changes, needs to accelerate. Programs will have to make tough choices on what content they’ll stop teaching so as to create space to add new digital instruction. Program leaders need to embrace a more digital vision for their schools so that they can provide the right guidance on the journey.
It’s encouraging that today’s students are abreast of the future of work.
Check out my new book, ‘Bits, Bytes, and Barrels: The Digital Transformation of Oil and Gas’, available on Amazon and other on-line bookshops.
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