Tuesday 25. January 2022
#208 - October 2017

Impacts of digitalisation on employment in Europe

The full impact of digitalisation on jobs is uncertain. The EU needs to focus on developing skills for the digital age argues Martin Ulbrich.

In a recent survey, three quarters of Europeans said that digitisation was good for the economy and for society, whilst the same share of respondents thought that it would destroy more jobs than it creates. This apparently paradoxical result reflects the increasingly ambivalent attitude of citizens towards digitisation. For a long time, people were just happy with all the new gadgets and services which became available. However, over the last three or four years, they have become increasingly concerned about the impact of digitisation on employment. Hardly a week goes by without newspaper articles or TV features warning that many jobs will be automated in the near future.


Digitalisation and jobs: the future is uncertain

Will robots really put people out of work? Even some people in the information and communications technology industry are afraid this may happen. Earlier this year, Bill Gates proposed a tax on robots to slow down their introduction. It is certainly true that a lot of current jobs will not exist in their present form anymore in twenty years. But then again this has been true ever since the industrial revolutions started 250 years ago. Blacksmiths disappeared, telephone operators came and vanished again, to name but a few. That is not a problem as long as new jobs are created – digital specialists are the example that springs to mind quickest. Their number increased by more than 2 million in the last ten years, but there are many others, too, who take advantage from digitisation without being digital, starting with the proverbial online handicraft shop.


Today, it is impossible to know for sure which effect will be stronger, among other things because both job destruction and job creation depend on the regulatory environment that will be put in place. In the past, job creation always at least compensated the job destruction, but that is no proof that it will do so again in the future. In any case, this net balance will only be the tip of the iceberg, with the real transformation taking place underneath the surface.


The transition needs to be managed

From a public policy point of view, it needs to be acknowledged that this transformation may be unsettling for people's lives. Even if on balance more jobs are being created than replaced, the transition can cause frictions, as some people lose one job and need to start another. More importantly, one has to recognise that while society gains overall, not everyone will: the new jobs may not go to the same people as the old ones, and may not go to the same geographic areas. In Europe, for example, many of the boomtowns of the 50s, when coal and steel was king, have been restructuring for 50 years and are still in the doldrums. It will be important to ensure that this does not happen again, this time to today's boomtowns.


Of course, the transformation of employment does not only take the form of jobs being lost and gained. On a much larger scale it means that current jobs will evolve, with automation taking over part of the tasks and new tasks being added instead. When automated teller machines came along in the 1980s, bank employees were freed to spend more of their time advising clients. Similarly, when digital technologies are introduced e.g. into the classroom, teachers are not replaced – instead they spend more time doing other things. However, this means that they need the necessary skills to work with the digital technologies. And for the moment this is really a bottleneck situation in Europe: in 2016, 44% of the EU28 population did not have basic digital skills, i.e. lacked sufficient digital skills to meet their current needs. That is why measures to increase skills for the digital are a key priority for policy makers.


Developing skills for the digital age

Note that the demand is for skills for the digital age, not just for digital skills. The latter are certainly needed so that workers can use the software and machines which are at their disposal, but workers also need the skills which machines do not have: social intelligence and empathy, i.e. the capacity do deal with other humans in a humane way, and creativity, i.e. the capacity to think out of the box. In a world where rationality in the form of digital technologies is abundant, other forms of intelligence come at a premium - yet another paradox. Fortunately, as we have seen with the survey quoted above, humans don't mind them.


Martin Ulbrich

Policy Officer, DG CONNECT, Digital Economy and Skills Unit


The views expressed by this author are his personal views and do not represent the position of the European Commission or parts of it, and do not necessarily represent the position of COMECE and the Jesuit European Social Centre.

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