We see glimpses of that tomorrow today. 2010 has ushered in a new decade, a new economy and a new ecosystem for small businesses and their customers. Effects of the Great Recession will continue to reverberate globally, with slower growth, less credit and greater uncertainty churning the marketplace. Yet, in spite of this turbulence, a new economy will grow, one that holds promise for business large and small, and consumers around the world.

Historically, technology has enabled an unprecedented growth in labor income, but has also been a source of disruption. Technology has boosted productivity, which, in turn, has driven strong per-capita GDP growth and has been associated with expanding employment. However, the gains in employment and income can come in spurts and tend to favor different sectors over time. This forces deep and sometimes painful structural adjustment, with jobs changing or disappearing in some areas while new jobs are being created elsewhere. Moreover, while there are many reasons for the decline in labor income shares over the last three decades, technological progress in capital goods has played a role. Finally, the distribution of labor income itself has become more unequal as some skills—particularly those associated with more routine tasks—have become redundant, leading to a polarization of income gains favoring high-skilled and disadvantaging low-skilled labor. Technological advances are likely to have a similar impact in the future. Two interrelated factors that have been driving the impact of technology in the past are expected to continue to do so going forward: i) automation or, more broadly, an increase in the extent to which capital can technically substitute for labor; and ii) the falling relative prices of capital goods (which encourage the replacement of labor for a given degree of substitutability). Automation could allow machines to perform cognitive but routine tasks now handled by humans. This would put particular pressure on low-skilled labor doing routine work. Illustrative model simulations indicate that the more easily capital will substitute for labor, the more productivity and overall income growth will pick up, but the more this is likely to increase inequality by favoring income from capital and higher-skilled work. A decline in capital goods prices is also likely to benefit the high-skilled vis-à-vis the low-skilled. Transitions can be costly. An advance of automation and falling relative prices of capital goods can be expected to entail similar labor market disruptions as technological progress in the past: skill mismatches will have to be overcome; investment in human capital will have to be financed in the presence of credit constraints, especially for low-income households; and some workers could be dropping out of the labor force altogether. While a significant shift in technology requires adjustment across all skill levels, adjustment will likely be more difficult and costly for the low-skilled. And technology will have repercussions beyond labor market adjustment. Technology and global economic integration are intertwined and affect cross-country income convergence. For instance, new technologies could increase concentration in product markets and reduce labor shares. They can also redefine the boundaries of firms and the role of employees, potentially fissuring the workplace. Policies can change the impact of technological change. Depending on societies’ preferences for growth versus income equality, governments may want to distribute the gains from technology more evenly. Certain policies, if well designed, could mitigate the trade-off between both objectives. For example, illustrative model simulations show that higher education spending would not only allow low-skilled workers to participate in the gains of technological change, it would also increase output; this holds even when taking into account that higher spending will require higher rates of taxation. More generally, while the use of the tax/benefit system to redistribute the gains from technological advances tends to come with some loss in efficiency, the resulting loss in output tends to be relatively small. Other relevant policies include stronger and portable social safety nets centered on empowering and protecting workers (rather than preserving jobs). Competition policies might have a role to play as well—e.g., in response to more market concentration driven by digitalization—but will have to be mindful of the complex relationship between market power and the creation and diffusion of new technologies.

Industrial and technological revolutions have historically resulted in the growth of economies and productivity, as well as the creation of new jobs. Despite short-term challenges arising from the replacement of manual labour and the need to upscale skills and competencies, the pace of transformation allowed time for education and training to catch up, and to equip low and mid-skilled workers with the new skills and competencies required to function productively. Today, many studies show that technology is being adopted at an exponential rate, replacing middle-level skills that were once considered uniquely human and placing the world of work in a state of flux. Dynamic processes such as digitalisation, the growth of the digital economy and technological advances, coupled with profound changes in the organisation of work, globalisation, demographic change, environmental challenges, as well as new ways of organising the production of goods and the delivery of services, provide a myriad of opportunities to society while at the same time presenting considerable challenges. This document has two parts: Part I (Chapters 2-4) looks at the trends in the world of work and Part II (Chapters 5 and 6) explores possible policy questions, responses and next steps.

The macroeconomic outlook for sub-Saharan Africa continues to strengthen. Growth is expected to increase from 2.7 percent in 2017 to 3.1 percent in 2018, reflecting domestic policy adjustments and a supportive external environment, including continued steady growth in the global economy, higher commodity prices, and accommodative external financing conditions. While fiscal imbalances are being contained in many countries, the adjustment has typically occurred through a combination of higher commodity revenues and sharp cuts in capital spending, with little progress on domestic revenue mobilization. Over the medium term, and on current policies, growth is expected to accelerate to about 4 percent, too low to absorb the likely flow of new entrants into labor markets. The outlook is surrounded by significant downside risks, particularly considering the elevated policy uncertainty in the global economy. Shielding the recovery and raising medium-term growth would require reducing debt vulnerabilities and creating fiscal space through more progress on domestic revenue mobilization, and policies to achieve strong sustainable and inclusive growth.

Women continue to be the most underutilised and potentially game-changing factor for a fair and prosperous future of work. As ILO approaches its centenary anniversary, this report aims to look to the future and the potential of decent work to transform the lives of women and men in a future of work which leaves no one behind. The report draws attention to opportunities for progress, practical measures and outlines some potential drivers of future labour market transformation. This publication of this report was made possible with the generous support of the Australian Government’s Department of Jobs and Small Business.

This paper reviews recent trends in the labour share in G20 countries (and over a long period of time in a few) and discusses possible causes of the observed trends. It then explores linkages between the labour income share and the main components of aggregate demand. Other critical issues such as the growth and employment impacts of the labour share and policy implications are raised in the paper “Strengthening the link between employment and growth” submitted to the EWG meeting of 26-28 February 2015 and will be discussed in more detail in a follow-up paper for the third EWG meeting (23-25 July 2015).

Co-chaired by South African President Cyril Ramaphosa and Swedish Prime Minister Stefan Löfven, the independent 27-member Commission includes leading global figures from business, trade unions, think tanks, government and non-governmental organizations. It was established by the International Labour Organization in 2017 as part of the ILO’s Future of Work Centenary Initiative. The Organization marks its centenary in 2019. Among the key issues considered by the Commission are new forms of work, the institutional ramifications of the changing nature of work, lifelong learning, greater inclusivity and gender equality, the measurement of work and human well-being, and the role of universal social protection in a stable and just future of work.

This study provides a first-ever account of global attitudes and perceptions of women and men regarding women and work based on the 2016 Gallup World Poll. The poll, which was conducted in 142 countries and territories, is representative of 98 per cent of the global population.

This ILO report quantifies job losses and job creation in the transition to a green economy, based on projections to 2030 founded on the agreed policy goal of limiting global warming to 2°C. More generally, it finds that the greening of economies can have a positive overall effect on growth and jobs. Positive employment outcomes will also probably apply in the 1.5°C scenario, as encouraged by the Paris Agreement. The report shows that environmental laws, regulations and policies that include labour issues offer a powerful means of integrating elements of the Decent Work Agenda with environmental objectives. This is true for social protection programmes, skills development programmes, macroeconomic policy and the legal framework. Though some degree of integration is observed in all these domains, it is not yet systematic and not yet universal. For example, while environmental legal frameworks can be effective in combining some elements of the Decent Work Agenda with environmental objectives, the respective provisions often focus on particular groups of workers (such as additional support for local communities, training in areas that are key for the transition, and the protection of workers in specific sectors). The transition affects all workers, however; the universality of rights and protection therefore remains important to ensure that the transition delivers inclusive growth and decent work.