White Paper

Wales is at the centre of a number of significant disruptions likely to bring long-term changes for its people and economy. Some of these are global in nature, such as automation and technological change. Some affect the whole UK – most obviously, the uncertainty around Brexit. Others come from within Wales, such as the rapid increases in its older population, which we will see expand over the coming years. For the people and economy of Wales to be ready for these very 21st century changes, we will need to see a 21st century skills system ready to equip Wales for the future. This report marks the first of two for this project on Wales, and follows our previous reports on the skills systems in Scotland and Northern Ireland. As a whole, the project aims to look at how to build a 21st century skills system in Wales, starting through this first report with a focus on the challenges and opportunities facing the skills system in Wales, before moving on to look at what needs to change and what needs to stay the same to prepare the skills system in Wales for the future.

The growth of the Online Platform Economy (OPE) has been contributing to the changing nature of work. Is this marketplace building momentum towards systemic change in the labor force, or will it remain a small market for supplementary income? In previous work we highlighted that growth in participation on labor and capital platforms has peaked. As of June 2016, participation on labor platforms has doubled year-over-year, but participation on capital platforms has leveled off. In this report, we explore the dynamics of participation and earnings in order to better understand how growth has slowed. We draw from one of the largest samples of platform participants to date: over 240,000 anonymized individuals who have received platform income between October 2012 and June 2016 from one or more of 42 different platforms. Our findings point to several dimensions of how the growth in online platform participation has slowed.

Americans experience tremendous income volatility, and that volatility is on the rise. Income volatility matters because it is hard to manage. The typical household faces a shortfall in the financial buffer necessary to weather this volatility. Moreover, the decline in real wages since 2009 for all income groups except the top 5th percentile means that life is harder to afford in general, but even more so when earnings dip below average. Rapidly growing online platforms, such as Uber and Airbnb, have created a new marketplace for work by unbundling a job into discrete tasks and directly connecting individual sellers with consumers. These flexible, highly accessible opportunities to work have the potential to help people buffer against income and expense shocks. The “Online Platform Economy” offers fewer worker protections than traditional work arrangements, however, which has led some to claim that the Online Platform Economy represents a fundamental shift in the nature of work. This report from the JPMorgan Chase Institute digs deeper into the demographics and sources of income volatility and provides an unprecedented look at the impact of the Online Platform Economy. This analysis relies on high-frequency data from a randomized, anonymized sample of 1 million Chase customers between October 2012 and September 2015. To examine the Online Platform Economy, we assembled the largest sample of platform workers to date—a dataset of over 260,000 individuals who have offered goods or services on one of 30 distinct platforms.

There is nothing new about technology causing the elimination of some jobs; it has been happening since the dawn of civilization. In the past, new technology has eventually contributed to creating jobs -- jobs requiring higher levels of skill, education and training. Up until now, machines have been most effective at performing repetitive and mechanical tasks – jobs that are “dirty, dull and dangerous.” Those jobs requiring human judgment, knowledge or interaction were considered to be largely immune to either mechanization or computerization. Recent advancements in computer data analytics and robotic technologies, however, have led some to speculate that this time could be different; that occupations involving cognitive, creative and socially interactive skills could also now be at risk. These concerns have received a great deal of attention in the media lately, in part, as a result of a September, 2013 Oxford University paper titled The Future of Employment: How Susceptible are Jobs to Computerisation? by Carl Benedikt Frey and Michael A. Osborne. Frey and Osborne examine 702 occupations and predicted, which were most, least, and somewhat at risk of being taken over by computers or computer-driven robots within the next two decades. “According to our estimate,” Frey and Osborne write in their report, “47 percent of total U.S. employment is in the high-risk category,” including such occupations as taxi drivers, fast-food counter clerks, paralegals, tax preparers and insurance underwriters, among many others. The 47 percent estimate and the large number of professional and semi-professional jobs on the list have prompted headlines in the media like “How to Keep Your Job When Your Boss Is a Robot” (Bloomberg, March 18, 2014) and “The Future of Jobs: The Onrushing Wave” (the Economist, January 18, 2014). The cover of the Economist featuring the article showed tornados ripping into a white-collar office workspace. Fueling this anxiety, some media pundits claim that education is no longer the sure fix it has historically been to the elimination of jobs by technology – that computers and other machines are on the cusp of becoming so powerful and capable they will completely replace humans in the workplace.

As disruption becomes an everyday occurrence, we explore its primary causes and the megatrends that are shaping our future Disruption is fundamentally changing the way the world works. Today’s businesses, government and individuals are responding to shifts that would have seemed unimaginable even a few years ago. Artificial intelligence and robotics are reinventing the workforce. Drones and driverless cars are transforming supply chains and logistics. And changing preferences and expectations — most notably in the millennial generation — are altering consumption patterns and demand for everything from cars to real estate. We have looked at the root causes of these transformative trends and, consequently, have identified three primary forces behind this current wave of disruption: technology, globalization, and demographic change. By understanding the interaction between these forces, we’ve identified eight global megatrends which are shaping the future. These are large, transformative trends that define the present and shape the future by their impact on businesses, economies, industries, societies and individual lives.

The world of work is part-and-parcel of the changing economy, heavily influenced by globalisation, international value and supply chains, more division of labour, and digital disruption. Work is no longer a static concept but an umbrella term for roles performed in a different manner and under different legal arrangements. Public policy needs to adapt to this new situation and benefit from the agility that comes with it while mitigating the downsides. Europe has a strong manufacturing base, a diverse and talented workforce and a large creative economy that offer a rich backdrop for a future of work with creative and fulfilling jobs. By orchestrating more tailor-made, customised interventions, based on granular insights provided by big data sources, it can achieve better results and foster the context within which both individuals and firms can thrive. This Strategic Note states that Governments need to find more innovative ways to offer life-long and personalised support for employment, skills and welfare, adapted to the needs of individuals.

In this essay, we argue that the thoughtful use of AI-based automation, far from making humans obsolete or relegating them to busywork, can open up vast possibilities for creating meaningful work that not only allows for, but requires, the uniquely human strengths of sense-making and contextual decisions. In fact, creating good jobs that play to our strengths as social creatures might be necessary if we’re to realize AI’s latent potential and break us out of the persistent period of low productivity growth that we’re experiencing today. But for AI to deliver on its promise, we must take a fundamentally different view of work and how work is organized—one that takes AI’s uniquely flexible capabilities into account, and that treats humans and intelligent machines as partners in search of solutions to a shared problem.

Why do we work and how does work give us meaning? How can the European values of justice, dignity and solidarity be realised in a changing world? To what extent may longstanding governance frameworks, such as social security systems and employment laws require an update? To address these questions an Open Round Table took place on 5 February 2018 with the participation of a wide range of stakeholders from different sectors of society, including academic experts, international organisations, industry, trade unions and NGOs. The conclusions of the Round Table will feed into the EGE’s Opinion n°30 on the Future of Work.

On 5 February 2018 an Open Round Table brought together a wide range of stakeholders from all sectors of society, including academic experts, international organisations, industry, trade unions and NGOs, discussing thorny questions at the heart of the Future of Work, ranging from the impact of automation and digitalisation on the labour market, including the future role of artificial intelligence, to the rise of the gig economy and industry 4.0. As a critical moment for public deliberation, the discussions held during the Round Table will inform the development of the upcoming EGE Opinion on the Future of Work.