December 18, 2018
Guest blog post by Alastair Macphail, head of the Communication Department at the European Training Foundation (ETF).
As we move deeper into the information age, the emerging technologies of artificial intelligence and advanced robotics – combined with widespread digitalisation, near-universal connectivity of people and things, big data, geolocation and much more – threaten to revolutionise the world of work, and indeed the very meaning of work itself. A recent report by MGI (McKinsey Global Institute: Jobs Lost, Jobs Gained: Workforce Transitions in a Time of Automation, December 2017) warns that 50% of the tasks people are now paid to do can be automated using existing technologies and that. While there is a huge gap between saying something can be automated and saying that it will be, all the indications are that the impact on labour markets will be significant. So its impact will not be limited to the developed world.
At the recent Skills for the Future – Managing Transition conference, the European Training Foundation (ETF) considered a technological change from the perspective of the transition and developing countries in the broader neighbourhood of the European Union where it works. While speculating about the future can be a fascinating intellectual exercise, the conference focused on how such changes influence the skills people will need for success in tomorrow’s world, and what action countries can take now to prepare their citizens and their systems for the future.
Moreover, technology is not the only driver of change. The skills that people will need for work and life ten or twenty years hence, and how societies should organise to deliver them, depend on other factors, such as globalisation, demographic shifts, migration and climate change. Despite the impressions we may return with from holidays in our near neighbourhood, the countries of the Southern and Eastern Mediterranean, the Balkans, Eastern Europe and Central Asia are highly integrated into the world economy, with exports forming a significant percentage of GDP and significant capital inflows from foreign direct investment and remittances from their large expatriate populations. Starting with textiles and footwear, they have for decades been offshoring destinations for European industry and increasingly services. Assembly plants of major vehicle manufacturers like Fiat, Renault-Nissan, GM, VW, or Toyota are dotted around the EU’s neighbouring countries, from Morocco to Uzbekistan, together with factories producing automotive components, particularly labour-intensive products like vehicle interiors and wiring harnesses. Vehicle component specialist Dräxlmaier Group, for example, has production plants in Tunisia, Egypt, Serbia, Moldova and the former Yugoslav Republic of Macedonia, where it is the country’s largest employer.
Having stayed relatively flat in the first decade of this century, sales of industrial robots have tripled since 2010, and high-tech manufacturing industries in the developed world are the primary buyer. For countries where offshoring has been a significant driver of economic growth, this raises the question of whether advanced automation in headquarters countries will change the terms of the cost-benefit equation that motivated the decision to offshore production in the first place.
This is one challenge for policymakers in the area of skills: how to build on the technology and the know-how that has come with foreign direct investment and the skills base that has been built up around the new industries to move up the value chain. Also, if there a risk that the global drive towards offshoring will go into reverse, how to add value to traditional local industries and build on historical, linguistic and cultural ties with neighbouring countries to create their own cross-border value chains.
Digitalisation opens horizons of opportunity here. In the short-term future, every job will require new digital skills. We need to invest in people to build a thriving digital global marketplace. In ICT, the assets are principally intangible, and the main input is human rather than material capital. The ETF has worked with nascent ICT hubs in Serbia, and there are fast-growing tech hubs in Ukraine and Egypt. One of the top priorities is to work with educators, policy makers and industry to demonstrate that vocational education and training can deliver these skills and is a valid first choice for learning, not a backup plan or option B.
Skills development and labour market participation are cross-cutting concerns; there is no doubting their vital importance to economic growth, social cohesion, and regional stability. Digital technology is making jobs more flexible, but also more complex. This requires strong capacities, among others, to be entrepreneurial, manage complex information, communicate effectively, think autonomously and creatively, be resilient, and smartly use digital resources.
The ETF is focused on the future of work and exploring the impact of global trends in EU neighbourhood countries. The scope and pace of this impact will vary from one state to another. Here, it is essential to take a broader approach. Nobody knows what the future will look like – nobody can predict what will happen – but we do know that policymakers and institutions in individual countries have to act now to manage the changes that these global trends are creating.Guest contributor