September 23, 2016
Guest blog post by Professor Melanie Arntz is acting head of ZEW’s Research Department “Labour Markets, Human Resources and Social Policy”. Dr. Terry Gregory and Dr. Ulrich Zierahn are Senior Researchers at ZEW.
In recent years, concerns have reemerged that automation and digitisation may after all result in a “jobless future”. However, a recent OECD study by researchers of the Mannheim Centre for European Economic Research (ZEW) shows that digitisation and automation are unlikely to destroy large numbers of jobs, but are likely to raise inequality as low-educated workers may well face deteriorating employment opportunities.
According to Carl Benedikt Frey and Michael A. Osborne, 47 per cent of jobs in the US are “at risk of computerisation”. These alarming figures spurred a series of studies that find similarly high proportions of jobs at risk of computerisation in a number of European countries. These studies therefore seem to confirm that automation and digitisation may destroy large numbers of jobs. However, machines do not tend to displace professions as such, but rather replace certain tasks in the workplace. Occupations consist of a variety of tasks and workers within the same occupation often perform different task bundles. These studies, therefore, may well overestimate job automatibility as they assume that whole occupations rather than only single tasks become automated.
In a recent paper, ZEW researchers take account of the heterogeneity of tasks performed in workplaces in 21 OECD countries, in order to re-evaluate whether the tasks performed in these jobs could actually be done by machines in the near future. Their findings suggest that the automatibility of jobs is significantly lower when the range of tasks actually performed by workers in their individual jobs is taken into account. Overall, they find that, on average, only 9 per cent of all jobs across the 21 OECD countries are automatable. Moreover, the proportion of automatable jobs varies between countries, from 6 per cent in Korea to 12 per cent in Austria. These differences appear to result from general differences across countries; in workplace organisation, differences in previous investments in automation technologies, as well as differences in the education level of workers.
The threat from technological advances thus seems to be much less pronounced than previously thought. Still, these figures would be worrisome if these jobs were actually fully replaced by machines. However, the estimated share of “jobs at risk” must not be equated with actual or expected employment losses from technological advances for three reasons. Firstly, the implementation of new technologies is a slow process, due to economic, legal and societal hurdles, so that technological substitution often does not take place at the rate expected. Secondly, even if new technologies are introduced, workers are often able to adjust to changing technological capacities by switching tasks, thus preventing technological unemployment. Thirdly, technological change also generates additional jobs by creating demand for new technologies and by increasing competitiveness.
Therefore, the main conclusion from the ZEW study is that automation and digitisation are unlikely to destroy large numbers of jobs. Nevertheless, they are likely to change the workplace organisation so that workers will be required to adjust to changing skill requirements in their workplaces. Low-qualified workers are likely to bear the brunt of these adjustment costs, as the automatibility of their jobs is often significantly higher compared to those of highly qualified workers. Therefore, the challenge in the future is likely to involve coping with rising inequality and ensuring sufficient (re-)training, especially for the group of low-qualified workers.
The complete study is available for download at:Blogactiv Team