How digital transformation will impact the job market and affect our lives?

Alliance4Europe is a European organisation established in Germany in October 2018. Its objective is to build a network connecting pro-European youth movements and to counter euro-skepticism. To foster new narratives, they organise events and debates around the topic of the EU and future generations.

The event “The future of employment in the era of automation, digitation and gig economy“, held on Monday, 4th February 2019, wanted to explore what are the possibilities for the future of employment in the next 10-20-30 years. Low skills and no-skills jobs are threatened by automation and digitalisation, but this could be the fate even for jobs who need a specific kind of expertise. However, technology can also contribute to the job market by actually creating new jobs and fasten productivity.

Alliance4Europe led the discussion around three main questions:

  • Is the EU ready to address new trends?
  • Will the education system follow this trend?
  • How can new jobs contribute to the EU society in the long distance?

Moderated by Yannis Karamitsios from Alliance4Europe, Brando Benifei – MEP at the European Parliament; Jorg Peschner from the European Commission; Rebekah Smith from Business Europe took part in the debate.

From the European Commission’s perspective

Jorg Peschner is Analyst at the DG Employment of the European Commission. He started by explaining that the EU is trying to increase productivity by introducing robots in the production system. This innovation may actually have a positive impact, but the truth has to be nuanced. Why do we use robots? Figures show that robots’ price is cheaper than labour costs. In some countries, robotisation has had a direct impact on the replacement of people by machines. Likely this will result in a full replacement in every mansion. This scenario is politically shocking, but it could lead to a real increase in employment.

The first effect of robotisation will be the replacement of lowq-ualified jobs. However, projections show that, in the long term, the number of workers will actually increase. People will adjust to the new situation. In fact, low-skilled workers excluded from the job market will be replaced by medium and high-skilled ones. The workforce composition will be changing towards high qualification. This will lead to increased productivity, and will call for investment for equipment, better qualified workers and new robots.

Nevertheless, much of these positive effects depends on education. Unfortunately, the results of the PISA test administered to students by the OECD are anything but positive. These results may be affected by social heritage, meaning that the level of education we can achieve as student depends on the level of education of our parents. The “inherited social disadvantage” would then explain why a large portion of the workforce is not highly qualified.

In this scenario, the investment in education is more than necessary. It could contribute to overcome the inherited social disadvantage, providing students with skills to navigate through the digitalised job market. But it should also intervene in preventing the exclusion of low-skilled young people. In fact, this situation could lead to a polarisation, with few who have the digital skills to deal with robots; and a large portion who is excluded from digital education and training.

Jorg Peschner concluded that instructions will be given to EU Member States. However, robotisation has to be introduced in parallel with an inclusive education pattern. In fact, investing in training and skills development can make digitalisation a real net job creator. Fostering employability is the real multiplier: if people access the job market, we will get sooner a higher return.

Business Europe’s point of view

Rebecca Smith from Business Europe introduced a more positive narrative on digitalisation and robotisation. Taking into account a first moment of adaptation, there will be benefits for both companies, workers and civil society. She explained the challenges that companies will have to face during the first phase of the transition. Most of the times, the introduction of robots has costs, production adaptability issues and long-term results. So, being competitive and, at the same time, improving workers wellbeing is not always easy.

Rebecca Smith questioned the ongoing debate about job destruction and creation. If we can understandably be concerned about “machines” replacing humans, this is not a new phenomenon. In addition, the debate narrative is always concentrated on the “replacement of jobs”. But Rebecca Smith it would be more accurate to discuss of “replacement of tasks”.

Moreover, Rebecca Smith highlighted how the transformation should be “human centric”. It would be achievable by improving working conditions when dealing with critical tasks, adding flexibility to work-life balance and making monotonous jobs more active. “Human centric” also means that human capabilities such as decision-making, empathy and emotional intelligence should remain pivotal. However, if this transformation wants to be inclusive, the key issue remains skills. Statistics are allarming for the economy at large and, agreeing with Mr. Peschner, Rebecca Smith underlined the importance of paving the way for digital skills before entering the job market.

A policy perspective

Brando Benifei analysed the social and political aspects of this transition. He stated that there is a social justice problem emerging from the inherited social disadvantage pattern introduced by Mr. Peschner. But how can we put forward meritocracy rather than parents’ social background? How can the EU foster digital innovation without leaving behind part of the population? Probably, a lower taxation could give the opportunity to invest in this sense, without further hindering diverse education paths.

In addition, Mr. Benifei tackled the lack of a proper European framework on “Platform Economy”.  Market fragmentation should be avoided in favour of the digital single market, but Member States legislations go in different ways. Sometimes, to protect the job market and the composition of the workforce, decisions hindering business models innovation have been taken. That is why, the future legislation should stop preventing this innovations to come up. To counterbalance this scenario, a European-wide legislation framework should be adopted to protect workforce and, at the same time, foster digital innovation.

The negative attitude toward digital work and digitalisation can be changed only if institutions take into account all these dimensions. Being an active and conscious digital citizen is crucial for the future of our democracies, fighting this disruptive attitude. Brando Benifei concluded that the EU institutions could be the real game changers in giving a positive message. These innovations should not be frightening. On the contrary, they could turn out to be helpful for each citizen.

by Irene Grazi


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