digitalisation & the 4 industrial revolution

Digitalisation & the 4th Industrial Revolution Changing jobs, work and skills

Konstantinos POULIAKAS

Department for Skills and Labour Market, CEDEFOP

Cedefop-UNESCO conference

‘Skills, jobs and sustainable development’

Paris, 20-21 October 2016

One day in the 1760s James Hargreaves, a hand-loom weaver from Oswaldtwistle, was struck by the way an overturned wheel kept on spinning. What would happen, the weaver wondered, if several spindles were to be placed upright, side by side? Might it not be possible to spin several threads at once?

Working with a knife, Hargreaves shaped a primitive engine, a ‘jimmy’ – and the initial reaction from some was disgust. Angry neighbours raided Hargreaves's barn, on the grounds that the machines would ‘ruin the country’. If one jenny could do the work of eight spinners, reasoned the neighbours, that would put seven out of work.

In fact, the spectacular new spinning capacity provided the basis for a cotton boom. In the 1770s, as earnings rose, spinners and weavers took to parading the streets on paydays with £5 notes in their hatbands. Their wives drank tea out of the finest china’.

(R.T. Lacey, Great tales from English History)

Internet of things

Advanced robotics

3D printing

‘On demand’ work

Drivers of change

2020 2025

Artificial intelligence

Advanced materials (synthetic molecules), biotechnology and genomics

Nanotechnology

Source: WEF (2015) The Future of Work

ICT is a major driver of employment creation

Initial labour saving impact offset by product innovation

and market compensation (e.g. scale/price/income effects)

New markets, products higher demand & job creation

New (non-routine) tasks within existing jobs; ICT displaces part

of tasks in jobs, not whole occupations

Uncertain impact of digitalisation on work

ICT induces pervasive technological

unemployment, polarisation and inequality

SBTC/offshoring

Hollowing out of middle-skill occupations

Pervasive LM imbalances

Pervasive mismatches due to within job task changes

Digitalisation: a major jobs driver

% employment growth per annum of ICT sector (esp. computing services) 3 x bigger than in all industries…

ICT sector accounts for 3-4% of EU employment, but for each ICT job created another 4-5 jobs are formed

…1m jobs created in ICT occupations in last decade; 500,000 more by 2025

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2005-2015 2015-2025

ICT All industries Computer programming, info services

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2005-2015 2015-2025

ICT Profs ICT tech All occupations

Source: Cedefop European skills forecasts

http://www.cedefop.europa.eu/en/events-and-projects/projects/forecasting-skill-demand-and-supply/data-visualisations
















Digitalisation fosters job transformation

43% of EU adult workers recently changed their technologies used in workplace.

From 1 in 4 in hospitality and personal services to 3 in 5 in ICT.

Extent of changing technologies & ICT systems by sector, 2014, EU28

0% 10% 20% 30% 40% 50% 60%

ICTGas or electricity, miningFinance, insurance, retail

Professional or scientific servicesSupply or treatment of water

Manufacturing or engineeringServices relating to education or…

Administration and support…Transportation or storage

Agriculture, forestry or fishingCultural industries

Retail and salesConstruction or building

Social and personal servicesAccommodation, catering or food…

Other

Source: Cedefop European skills and jobs survey (ESJS)

http://www.cedefop.europa.eu/en/events-and-projects/projects/analysing-skill-mismatch










Digitalisation displaces low-skilled/routine jobs

00.10.20.30.40.50.60.70.80.9

Negative job growth Positive job growth

Difference between «jobs» with positive vs. negative anticipated employment

growth rate, 2014-25, EU28

Source: Cedefop European skills and jobs survey (ESJS); Cedefop skills forecasts; Frey and Osborne (2013)

Faster innovation cycles

- Telephone: 75 years, 50m users; mobiles: 20 years, 2bn users

- New technology sectors less labour intensive (e.g. Instagram vs. Kodak)

Demography

- Ageing and technological obsolescence

- Most of skill adjustment within workplaces

Even non-routine/white collar jobs seem vulnerable

- Self-driving cars, self-writable stock market reports, ‘algos’, robot nurse

Falling share of labour in total income

- Technology contributing to rising capital share (Berger and Frey, 2016)

- Median wage delinked from productivity

What is different this time?

0% 20% 40% 60%

21%

45%

25%

22%

42%

48%

50%

43%

Changes to technologies in past 5 years

Skills very likely outdated in next 5 years

Digitalisation and risk of technological obsolescence



o About 10% of jobs of EU employees at high risk of technological obsolescence.

o Less than a half (46%) neither experienced nor expect significant change in skills.

o Highest rates in Estonia (23%), Slovenia (21%) and Czech Republic (19%).

o Netherlands (56%), France (52%), Germany (50%) and Belgium (50%) less susceptible to tech obsolescence.

o Tech obsolescence higher in ICT, health,

engineering, managerial occupations. Lower in primary sector and personal service occupations.










7 in 10 EU workers need fundamental (‘Office’) skills for their jobs

Level of importance of ICT skills in jobs, adult workers, 2014, EU28

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

SE IE DK SK CZ HR MT FI AT UK IT LT EE FR PL BE DE HU SI ES LU LV PT BG NL GR RO CY

Fundamental Advanced No ICT












A high share of EU workers are still working in an ‘analogue’ world

Level of importance of ICT skills in jobs by occupation, adult workers, 2014, EU28



86% 77% 73% 71% 70%

58% 55% 55% 42%

10% 21% 25%

4%

25%

5% 2% 7%

2%

4% 2% 2%

25%

5%

37% 43% 38%

56%

0%

20%

40%

60%

80%

100%

ClericalSupport

Managers Professionals Service andmarket sales

workers

Techniciansand associateprofessionals

Plant andmachine

operators,assemblers

SkilledAgricultural,

Forestry,Fishing

Building,Crafts or a

RelatedTrades

Elementary

Fundamental Advanced No ICT










The digital divide fosters social exclusion Use of advanced ICT skills in jobs and risk of digital skill gaps in jobs, 2014, EU28

-0.04 0 0.04 0.08

Previously unemployed

Part-time

No formal contract

Private sector

Size: 50-99

Size: 100-250

Size: 250



-0.1 -0.05 0 0.05

Female

Age 40-54

Age 55-64

Low education

High education

Digital skill gap Use of advanced ICT skills










Is the end of work nigh? We will decide!

How will skill supply adjust?

- Difficult to attract students to ICT/STEM.

- It takes time for TVET curricula to adjust to ICT.

Will technology foster product innovation?

- Depends on R&D incentives/patent policy etc.

- Human Intelligence, not AI, offers competitive advantage.

How will skills be rewarded?

- Inequality smaller in countries with lower skill premiums - not necessarily those with higher skills LM institutions/competition

- Worker sharing of productivity gains; who owns the robots?

Shaping the digital future: No one left behind

Progress in active learning of at-risk groups. But still need for policy attention in:

- Promoting ICT in

VET - Teacher training - Provide incentives

to cover ICT costs

Source: Cedefop (2015) Stronger VET for Better Lives

http://www.cedefop.europa.eu/en/publications-and-resources/publications/3067






But also shaping the digital present… Regional digital centres/ICT boot camps

- To facilitate digital literacy among low-skilled people/territories

Promotion of online learning courses

- To foster greater participation of adult/older learners into the

digital age

Recognition of informal digital competences

- For greater transparency of ICT skills stock in EUMS

Integration of new online/e-learning (private and public) certificates within NQFs/EQF

- For greater transparency of ICT qualifications in EU

Digital coalitions among education providers/industry

For more information

[email protected]

www.cedefop.europa.eu

mailto:[email protected]

http://www.cedefop.europa.eu/

digitalisation & the 4 industrial revolution

Documents