White Paper

Automation and artificial intelligence (AI) are changing the nature of work. In this discussion paper, part of our ongoing research on the impact of technology on the economy, business, and society, we present new findings on the coming shifts in demand for workforce skills and how work is organized within companies, as people increasingly interact with machines in the workplace. We quantify time spent on 25 core workplace skills today and in the future for the United States and five European countries, with a particular focus on five sectors: banking and insurance, energy and mining, healthcare, manufacturing, and retail.

Increasing digitalisation is penetrating all areas of the economy, society and politics. This is triggering changes in many areas, which will naturally also affect welfare states. Digitalisation is changing not only industrial production, but also how participation in politics and society is organised; how states and governments provide social services; how participation in the labour market works; how health care services are delivered; and so on. Whereas some studies focus on the risks of digitalisation for the labour market and predict an “end of work” (cf. Frey/Osborne 2013; BMAS 2015), other authors highlight the opportunities that digitalisation offers for social innovation (Buhr 2015; 2016). Such opportunities can be harnessed by means of targeted coordination and change-management if Industry 4.0 also becomes Welfare 4.0. There is currently no in-depth research available into the consequences of digitalisation in and for contemporary welfare states and their adjustment towards Welfare 4.0. However, a number of fundamental questions need to be answered. What effects might digitalisation have on health-care systems? How is labour market policy changing? What role does innovation policy play? How far have developments in individual welfare states progressed? What further developments can we expect? And how will the key players in the relevant policy areas react to these? The questions raised are examined in this study conducted by a group of political scientists from the Eberhard Karls University Tübingen on behalf of the Friedrich-Ebert-Stiftung. Under the title On the Way to Welfare 4.0?, both the status of digitalisation and its effects on the fields of labour market, health-care and innovation policy are examined.

In this report, we have further developed that index to map digitisation in Europe and to compare the digital frontier in European countries to that of the United States. And we have added a new lens—looking at countries’ final consumption of digital services, contrasting those that are building domestic capabilities and those that continue to rely on digital imports. The latter are losing out on potential economic gains from building a domestic base of digital technologies. Today, it is no longer sufficient to be a consumer of digital. To maximise the gains of approaching the digital frontier, countries must also develop the technologies and associated human capital.

This discussion paper, the latest in our ongoing research on the impact of technology on business and society, is an attempt to understand both the positive and negative effects in more detail and to examine and evaluate ways in which new and mostly digital and smart technologies could potentially enhance welfare and soften disruptive transitions in advanced economies. For the research, we compiled a library of about 600 use cases of technology applications that contribute to well-being, especially in relation to key societal challenges such as job security, health, and equal opportunities. More than 60 percent of these cases use some AI capabilities. We then developed a comprehensive welfare model of technology adoption that quantifies technology impacts beyond pure GDP. It incorporates critical dimensions of inequality, risk aversion to unemployment, leisure, and health and longevity, building on recent economic literature on welfare and well-being. Using this model, we conducted a simulation of welfare outcomes that enables us to compare the contribution of the new generation of technologies to previous generations and to identify key priorities for moving toward what we call a “Tech for better lives” outcome.

New technologies―digitalization, artificial intelligence, and machine learning―are changing the way work gets done at an unprecedented rate. Helping people adapt to a fast-changing world of work and ameliorating its deleterious impacts will be the defining challenge of our time. What are the gender implications of this changing nature of work? How vulnerable are women’s jobs to risk of displacement by technology? What policies are needed to ensure that technological change supports a closing, and not a widening, of gender gaps? This discussion note looks into these questions.

Almost in a blink of the eye the policy focus on the 'knowledge' economy, with mass ranks of high skilled workers, has given way to claims of widespread 'technological unemployment'. This Working Paper will examine competing claims on the relationship between automation, skills and the future of work. It examines the research evidence on the scale of job losses anticipated as a consequence of digital disruption. It presents three scenarios of the impact of digital disruption on future skill requirements, before considering how evidence on automation and digital disruption is used to influence and inform UK government policy interventions on skills, employment and labour markets. In conclusion, we recommend caution in interpreting existing evidence. While high profile reports on digital disruption make for eye-catching headlines, they make for poor policy formulation. A key message is that technology is not destiny. It is human decisions that will determine the future of work.

There are many concerns that technological innovation will lead to increased unemployment, suppressed wages and greater inequality. However, the impact of the new technologies on labour markets and income distribution is not predetermined. The right policy mix and institutional arrangements can ensure that the benefits of innovation are shared broadly, an essential step to achieving the Sustainable Development Goals (SDGs) for all. This work provides an evidence-based analysis of the link between recent technological progress, labour markets and inequality

This paper highlights the key trends that are reshaping economic competition and the global division of labour. It argues that an increased supply of skills is not enough on its own to secure the UK’s position at the high value end of production or to sustain its competitive advantage. How important is knowledge intensive activity and productivity to what happens after skills acquisition takes place? Will the way companies use and manage their workforce, and the kind of working practices they adopt, be a decisive factor for their competitiveness? The authors argue that recent developments in emerging economies have demonstrated that ‘high-tech’ economic development does not necessarily need to go hand in hand with radical changes in the country’s underlying social structures. Therefore ‘path dependency’ is less important than assumed and companies move up the value chain because they are willing to ‘raise their game’ not because of institutional change. If This is the case, what are the drivers for companies to move into new product markets and knowledge-intensive activity? Is there a need for a policy shift in this area and If so, what would this look like? What policy levers are available to encourage employers to ‘raise their game’?