As a specialist in international recruitment with a strong presence in Digital transformation and High Tech, Alhambra International has analyzed the major studies about the future of work and the future jobs. We have already released a tribune in 2015 http://www.alhambra-international.com/overview-of-promising-job-positions/ and this year 2016, we have decided to focus our analysis on the last OECD future of work’s survey.

OECD gives an overview on the impact of the Digitisation which is going to influence the future of work over the next decades and consequently make an entirely change in the type of the jobs. By Digitisation, we mean ever increasing computing power, Big Data, Artificial Intelligence, Internet Of Things and online paltforms.

For now, major historic breakthroughs such as steam engine, electricity or assembly lines have caused substantial job losses in the short-term but this was compensated by the creation of more productive and rewarding jobs with an increase of quality of life and workers’ purchase power. With the Digitisation and especially with the rapid progress of the Artificial Intelligence (AI), a broader range of tasks could be carried out by machines. There is a risk associated with the loss of jobs involving mid-level skills, automation leading to the substitution of machine for a substantial part of routine jobs. And at the same time, OECD has observed that the demand for workers in high skilled non routine jobs has increased strongly in most advanced economies. This explains the success of some economies with full employment such as Germany, Switzerland, Austria, Netherlands in Europe or Singapore, Hong Kong, Korea in Asia and also to some extent California and Canada in Northern America.

Even if there are other structural changes such as the globalization and also the demographic evolution which can impact future of work, there is a job polarization by skill level with the Digitisation. We will now have a look on the percentage of jobs which could be replaced in the next years.

Some experts suggest that the technological changes impacting this “second machine age” will provoke a decline in the overall employment even for cognitive tasks.  For these experts (Autor and Handel 2013), around 50% of the jobs in US and other advanced countries will be substituted by computer or algorithms.

But for OECD, there is a better approach by analysing the task content of individual jobs instead of analyzing the average task content of all jobs.

  • With this new method, it turns that 9% of jobs are at a high risk of being automated on average, while between 50% to 70% of the tasks will become automatable.
  • There is a country difference as well, if the country rely less on face-to-face interaction, the risk will be higher. If the technology takes an important part in their economy (with a large percentage of their GDP on ICT) such as Denmark, Finland or Japan, the risk is lower as there are already experienced automated tasks or jobs.
  • Across all countries, workers with a lower level of education will be probably strongly impacted. 40% of the workers could face risk of displacement with the rise of job automation in their positions.

However, the risk of technological unemployment can be discounted, since there is an expansion for technological sectors, new jobs will appear as technogical applications develop themselves and other sectors expand as costs fall and income and wealth increase.

Besides, the introduction of new technologies is a slow process, due to economic, legal and societal reasons. These trends could reduce the number of hours worked and increase part time jobs but not necessary the number of jobs. Indeed, job displacement and changes will mainly impact workers with low skills as we have seen before.

The internet economy and especially the platform economy facilitates more efficient matching between the demand and the supply of labour. Digitisation makes work become more flexible, workers in the platform economy have multiple jobs and sources which challenge the traditional labor market. There is also a new emergence of freelancing and independent work. There is an increase among Technicians and  Associate Professionals and also a long term rise in some countries such as Germany, UK and Netherlands. The share of diversified workers (people having both a work contract and working as freelancers in a complementary activity) has increased from 6 to 9% in the US while other forms of independent work declined.

This platform economy is also associated to non standard work arrangements for workers and fewer rights in social protection/less training/weaker career progression/less access of mortgage of credits…  than it’s the case with standard workers with salaries. More and more self-employed workers are facing greater insecurity and sometimes less work benefits.  In 15 out of 34 OECD countries, self employed workers are not eligible for unemployment benefits and if in 19 out of 34 countries they are also not eligible for work injury benefits…

The polarisation of jobs into high skilled and low skilled positions caused by digitisation will influence the wage structure. High-level skilled workers will have more offers with more wages and the reduction in the demand for workers with middle level skills has reinforced competition for lower paid jobs. Capital-intensive mode of production will also impact the labor share of GDP and will increase inequalities. These changes will increase the risk of experiencing in work poverty and the persistence of low incomes for more workers than before. These inequalities will also have a geographic impact as new jobs with high skilled workers will be created in smart and prosperous cities with a strong university network while other cities will experience displacement or job losses.

To face all these changes, labour market, education and fiscal policies need to be adapted to promote skills adaptation, labour mobility, professional training and financial assistance to help  low skilled workers to escape from poverty.  

Pierre MAURIN

Senior Partner Alhambra International