The future of work: How digital transformation is shaping the job market

In October of 2018, a European organization known as Alliance4Europe was established in Germany. Its goal is to combat euro-skepticism and establish a network that connects pro-European youth movements. They organize events and discussions on the topic of the EU and future generations in order to promote fresh narratives.

The purpose of the event titled “The future of employment in the era of automation, digitization, and gig economy,” which took place on Monday, February 4, 2019, was to investigate the potential outcomes for employment in the ten, twenty, or thirty years to come. Automation and digitalization pose a threat to low-skilled and no-skill jobs, but this may also be the case for jobs that require a particular type of expertise. Technology, on the other hand, has the potential to boost productivity and create new jobs, which in turn can help the job market.

The three main issues that dominated the discussion were:

• Is the EU prepared to deal with emerging trends?
• Will this pattern continue in the educational system?
• What long-term benefits can new jobs bring to EU society?

Moderated by Alliance4Europe’s Yannis Karamitsios and European Parliament MEP Brando Benifei; From the European Commission, Jorg Peschner; From Business Europe, Rebekah Smith participated in the discussion.

From the perspective of the European Commission, Jorg Peschner works as an analyst at the DG Employment. He started by saying that the EU is trying to make the production system more productive by using robots. Although the reality must be nuanced, this innovation may actually have a positive effect. Why are robots used? According to the figures, the cost of robots is less than that of labor. The eradication of humans by machines has been directly impacted in some nations by robotization. Every mansion will likely undergo a complete replacement as a result of this. Although politically shocking, this scenario could actually result in an increase in employment.

Low-qualifying jobs will be replaced as a result of robotization first. However, long-term projections indicate that the number of employees will actually rise. The new circumstance will get used to by people. In fact, workers with low skills who are out of work will be replaced by workers with medium and high skills. The composition of the workforce will shift toward those with high qualifications. This will necessitate investments in new robots, better-trained employees, and equipment due to increased productivity.

Nevertheless, education is crucial to many of these beneficial outcomes. Sadly, the PISA test that the OECD gave to students did not produce any encouraging results. These results may be influenced by social heritage, which means that our educational attainment as students is influenced by our parents’ educational attainment. The “inherited social disadvantage” would then explain why a lot of people in the workforce don’t have high levels of education or training.

The investment in education is absolutely necessary in this scenario. It could help students overcome their inherited social disadvantage by equipping them with the tools they need to succeed in today’s digital workplace. However, it should also intervene to stop young people with low skills from being excluded. In fact, this circumstance may result in polarization, with few individuals possessing the digital skills necessary to deal with robots; and a significant portion of those who are excluded from digital training and education.

According to Jorg Peschner’s conclusion, directives will be issued to EU Member States. However, an inclusive educational model must be implemented concurrently with robotization. In point of fact, investing in skill development and training can make digitalization a true net job creator. The real multiplier is encouraging employability: If people can get jobs, we will get a higher return sooner.

The viewpoint of Business Europe Rebecca Smith presented a narrative regarding digitalization and robotization that was more upbeat. Taking into account the initial period of adaptation, there will be advantages for businesses, employees, and civil society at large. She went over the obstacles that businesses will have to overcome in the initial phase of the transition. The majority of the time, introducing robots results in long-term costs, production adaptability issues, and costs. Therefore, it is not always simple to maintain competitiveness while simultaneously enhancing employee wellbeing.

Rebecca Smith questioned the ongoing discussion regarding the creation and destruction of jobs. This is not a new occurrence, so it is understandable that we are concerned about “machines” replacing humans. Additionally, the narrative of the debate is always centered on the “replacement of jobs.” However, Rebecca Smith believes that the term “replacement of tasks” is more appropriate.

In addition, Rebecca Smith emphasized that the transformation ought to be “human centric.” It could be accomplished by making monotonous jobs more active, increasing flexibility for work-life balance, and improving working conditions for critical tasks. The term “human centric” also implies that human capacities like decision-making, empathy, and emotional intelligence ought to continue to play a significant role. However, skills remain the primary issue if this transformation wishes to be inclusive. According to Mr. Peschner, statistics are alarming for the economy as a whole, and Rebecca Smith emphasized the significance of preparing for the job market with digital skills.

Brando Benifei examined the social and political aspects of this transition from a policy perspective. He stated that the inherited social disadvantage pattern presented by Mr. Peschner is the source of a social justice issue. But how can we emphasize meritocracy over parents’ social status? Without excluding a portion of the population, how can the EU encourage digital innovation? A lower tax rate probably would make it possible to invest in this way without making it any harder for people to pursue various educational paths.

Mr. Benifei also addressed the absence of a proper European framework for the “Platform Economy.” The digital single market should avoid market fragmentation, but Member State laws go in different directions. Business model innovation has sometimes been hampered by decisions made to safeguard the workforce and the job market. Therefore, future legislation ought to stop preventing these innovations from being developed.