Scientific Foresight (STOA) By / February 10, 2021

Work in the era of AI: Time for a Digital Social Contract

Technological change, far from being deterministic in its nature and effects, is open to reform. There is no guarantee that digital technologies will destroy jobs, nor any certainty that these technologies will lead to more and better jobs.

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Written by Mihalis Kritikos,

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Technological change, far from being deterministic in its nature and effects, is open to reform. There is no guarantee that digital technologies will destroy jobs, nor any certainty that these technologies will lead to more and better jobs.

This was one of the main conclusions of the study ‘Digital automation and the future of work: Securing a digital future that works for all’, which was carried out by Professor David Spencer of the University of Leeds at the request of the STOA Panel, following a proposal from STOA Chair Eva Kaili (S&D, Greece).

Although new technologies can lead to economic growth, job creation and demand for new specialist skills, they can also displace entire tasks and professions, modify the nature and structure of jobs and create a polarised economy. This is fuelled by the dominant perception that today’s technological change is faster-paced and broader-based than in the past, automating many more jobs than previously thought. As technological breakthroughs rapidly shift the frontier between the work tasks performed by humans and those performed by algorithms, labour markets are undergoing major transformations. The changing nature of work may undermine the protection of labour rights, lead certain types of workers to long-term unemployment, and create job polarisation and societal discontent. If not managed carefully, these transformations, exacerbated by the ongoing Covid‑19 crisis that has impacted millions of low-skilled workers, pose the risk of further widening skills gaps and existing inequalities.

Will artificial intelligence (AI) technologies benefit the labour market and job creation over the next decade and beyond, or will they aggravate it by replacing humans? Is the ongoing technological disruption going to lead to extensive technological unemployment or have labour-augmenting effects? Are all stakeholders adequately prepared to tackle the challenges of the ongoing increase of automation in the workplace and strengthen existing safety nets in view of the coronavirus pandemic and its unprecedented social and economic consequences?

This new STOA study provides a timely, in-depth overview of the nature, scope and possible effects of digital automation. It reviews relevant literature and recognises that the impacts of technological change on work and employment are multifaceted. The report addresses the nature, scope and possible effects of digital automation and situates modern debates on technological change in historical context. The report recognises that technological change can affect not just the volume of work but also its quality.

According to the study findings, the effects of digital technologies will depend on the relative strength of any job displacement effect and digital automation will have a more complex and gradual effect on occupations than simply wholesale job destruction. By looking at the history of technological change, the author argues that, despite the effects upon the type and often the content of work on offer, no technological revolution has led to any lessening in the work we are required to do.

On the one hand, it is argued that technology may help to improve skills and raise the quality of work, leading to upskilling and improvement in the quality of jobs. At the same time, digital technologies, and AI in particular, can lead to skill gaps, greater inequality and a more polarised society by de‑skilling and creating and embedding low-paid, low-autonomy work. They can also erode job quality by eliminating valuable skills, intensifying monitoring at work, and extending atypical work.

The study puts forward the issue of the broader economic and social context within which technology is developed, applied and controlled as an important parameter in the analysis of the effects of digital technologies upon the future of work. The author stresses the need for wider reforms that go beyond the existing skills-focused agenda and are inclusive of work time reduction, so that the benefits of digital automation can be more widely shared. The study’s recognition of the need for better active labour market policies as well as for better involvement of and working together between employment services, skills providers, social services and business is of significant policy relevance.

The report adds to the current debates by suggesting policy options that are forward-looking in that they not only complement existing policies, but also propose elements of a digital social contract that could promote an inclusive future of work. These refer to the need for digital upskilling for working in AI-enhanced environments, and a reduction of the EU Working-Time Directive to 38 hours per week and removal of the opt-out clause. The study argues for greater worker representation and more democratic workplace governance and the adoption at the EU level of a strategic, mission-oriented approach to digital automation to ensure decent work objectives are achieved. The proposed policy options go beyond the commonly framed suggestions for enhancing skills and training and seek a human-centred approach to digital transformations of work based on industrial democracy and social partnership.

The study is expected to steer the debate around the labour market impact of AI and through its analytical lenses to offer considerable evidence to respond to the ongoing challenges related to the precariousness of today’s jobs. Given that the Covid‑19 crisis has further increased the gap between the most privileged and the most vulnerable and has accelerated digital disruption, the study’s balanced approach may prove vital in helping to prepare a more inclusive digital future, in adapting EU policies to the changing reality in the world of work, and in exploring how to best harness such changes for the benefit of our societies. The ongoing technological change needs to be managed in a proactive and worker-centric manner: the study’s findings can support EU policy-makers in visualising labour reforms that are inclusive and would enable the net benefits of digital automation to be realised and more widely shared.

Read the full report and accompanying STOA Options Brief to find out more.

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