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EPRS-OECD conference: policies can mitigate impact of jobs losses from automation

Written by Marcin Grajewski,

EPRS Policy roundtable – The impact of automation:Identifying jobs at risk

Technological and digital revolutions are reshaping labour markets across the world, with many jobs likely to disappear or to be significantly transformed over the next 15 years, as robots and computers learn to perform an increasing number of tasks, according to analysts speaking at a conference in the European Parliament. In response, governments need to foster policies to master automation, rather than reject it, and create jobs in the technologically transformed environment, as well as alleviate the associated negative impacts with social protection measures. The analysts present also remarked that the European Union should step up efforts to catch up with the United States and China in new technologies. The event, entitled ‘The impact of automation: identifying jobs at risk’ was organised by the European Parliamentary Research Service (EPRS) and the Organisation for Economic Cooperation and Development (OECD), at the European Parliament Library Reading Room on 25 September 2018.

WEBER, Renate

WEBER, Renate

‘This topic of the impact of automation has been absent from the agenda until recently… Some paint a catastrophic future. It is true that many jobs will be lost, but they will also be transformed into something else and a new one created, with the right policies’, said Renate Weber (ALDE, Romania), Vice-Chair of the European Parliament Committee on Employment and Social Affairs, opening the debate.

The conference focused on the recent OECD report, Putting faces to the jobs at risk of automation, which examines professions and skills that will sooner or later no longer be needed thanks to automation, digitalisation and artificial intelligence (AI). The paper says that about 14 % of jobs in the OECD’s 36 mostly industrialised countries are highly likely to be automatable (17 % in the EU), while another 32 % could face substantial change in how they are carried out.

QUINTINI, Glenda

QUINTINI, Glenda

‘Some countries are more prone to automation than others as they have a different industrial structure. Germany, for example, has a relatively high risk of automation as manufacturing is still very important there. It depends what economic sectors are in the economy, but also what people do in those sectors’, noted Glenda Quintini, Senior Economist of the Directorate for Employment, Labour and Social Affairs at the OECD.

Among the OECD countries, Slovakia is the most susceptible to automation. This may be because of its large automotive sector, where vehicles are often assembled from parts produced elsewhere. Norway is the least vulnerable to the process.

In general, the highest risk of automation is concentrated in routine jobs with low skill requirements. The manufacturing and agricultural sectors, as well as some service jobs, are most likely to be affected. But there are also examples of white collar professions that are being automated, such as investment bank traders or paralegals. Sharing economy firms are reshaping transport and tourism. The development of autonomous vehicles puts many drivers’ jobs at risk.

The lowest risk of automation is for cognitive, non-routine jobs and those where human contact is valued, such as managerial professions, fine arts, negotiators or social care workers. ‘The qualities needed are creative intelligence and social intelligence’, said Quintini. However, physical tasks related to perception and manipulation in an unstructured, complex environment will also be difficult to automate.

In the past, new technologies often eliminated many jobs, yet new ones were soon created, as was the case during the industrial revolution. However, whereas in the past changes took decades, allowing for gradual adjustment, they now take place in years, posing a challenge to people’s job security and way of life.

Reinhilde Veugelers

Reinhilde Veugelers

‘There will be destruction, but there will also be creation, and a challenge from the policy perspective is to ensure that there is enough new activities, jobs created and … enough social protection’, said Reinhilde Veugelers, professor at KU Leuven and senior fellow at the Bruegel think tank.

Firstly, automation and digitalisation need to be mastered. The USA and China have outpaced the EU in this area. ‘The EU has not really shown in the past the strong capacity to lead in that digital and innovation here’, said Professor Veugelers, calling for more and smarter investment in new technologies, and highlighting the importance of research in artificial intelligence, which is ‘a general purpose technology, helping to innovative activities in other sectors’. Here, Renate Weber expressed concern about the transparency of the Chinese AI programme, saying ‘Do we know what is happening in China? I have my doubts’.

Secondly, education systems need to be adapted to teach children and youth the right skills, that is develop cognitive and social intelligence and learn to work in the digital context. Reinhilde Veugelers argues that AI could be useful in training for digital skills. Another crucial policy instrument is adult learning, as few people will have a job that is ‘guaranteed for life’. This needs to be accompanied by efforts to combat the currently growing wealth inequalities, as the poorest in society are the least likely to get proper education or retraining, propelling the vicious circle.

Lieve Van Woensel, the Head of EPRS’ Scientific Foresight Service and the event’s moderator, pointed to a recent EPRS study, The impact of new technologies on the labour market and the social economy, which additionally suggests limiting the impact of automation on unemployment by reducing working time as productivity increases.


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