Skills Intelligence Publication

Several years before the COVID-19 pandemic, the proliferation of Ιndustry 4.0 digital technologies raised concerns about automation and job losses resulting from it. Cedefop’s first European skills and jobs survey, which collected information on the skills and work experiences of EU adult employees in 2014, showed that 43% of them had experienced change because new machines and ICT systems were introduced into their workplace. At the time, debates in popular media on the rise of robots and artificial intelligence (AI) algorithms painted a bleak picture of a forthcoming jobless and polarised second machine age society.

Early research on the implications of digitalisation signalled that as much as half of all jobs in advanced economies could be replaced by AI algorithms. With cutting-edge self-learning capacities in AI and advanced robotics, which go far beyond algorithmic or rule-based computer programming, the concern is that a wider range of previously outof-reach, cognitively challenging tasks may now be susceptible to machine replacement.

The discourse on the labour market impact of digitalisation has focused on forecasting its job destruction potential. Research on future job displacement by new digital technologies has revolved around the so-called ‘job polarisation or routine-biased technological change (RBTC)’ hypothesis. It assumes that digitalisation tends to crowd out middle-skill, routine or manual jobs, where human input is more expendable given the precision and cost-efficiency of robots or computerised machines in carrying out codifiable, programmable tasks.

More recent studies paint a more nuanced picture. They note that, although digitalisation inevitably leads to some job losses, in most jobs it is likely to result predominantly in task transformation. This shifted the focus of the debate, which increasingly became concerned with accommodating upskilling and reskilling needs and tackling digital divides, which leaves vulnerable groups particularly exposed to the disruptive impact of digitalisation.

It is obvious that difficulties sourcing skills and talent are persistent in the EU: 3 in 4 EU firms face difficulties finding employees with the right skills. Skills shortages may have been temporarily muted by the pandemic but, since then, have been returning to pre-pandemic levels. What should be cause for concern is that in the wake of the pandemic investment in corporate training collapsed and (informal) training participation declined substantially. 

Such trends are incompatible with achieving a just digital transition. Adopting and using digital technologies require in-company skilling strategies. These strategies should accommodate people-centred corporate human resource management practices and social dialogue to counter adverse employment effects of digital technology adoption.