EU labour markets must adapt to the digital era

Digitalisation presents opportunities and challenges in the changing world of work, writes Brando Benifei.

Brando Benifei | Photo credit: European Parliament audiovisual

By Brando Benifei

28 Apr 2017

Digitalisation is having a profound effect on the way we work now, and the way we will work in the future. It has opened up a world of challenges and transformation that must be addressed in order to enable people to benefit from new opportunities, instead of being excluded from a changing labour market.

Europe can rebuild a sustainable recovery and maintain a primary role on the global stage only if its labour legislation is able to adapt to the digital era, be resilient and efficient, far-sighted, and most of all, inclusive. An ageing, urban, educated, hyper-connected workforce is emerging. 

The worldwide web enables a global labour market and allows people to work in less formal structures and to set up on their own as independents and new start-ups. The dimensions of both time and space in relation to work are shifting, allowing a more tailored response to workers' personal needs. 


Labour markets can be identified more and more through the diversity and multiplicity of working arrangements rather than a one-size-fits-all approach, and this new flexibility attracts youngsters and millennials who want more than ever to be masters of their own destiny.

Yet all these factors also carry the potential to be disruptive and dangerous. Uncertainty, insecurity and lack of tailored support for education and training may also hinder social cohesion and economic growth and make social exclusion a reality. 

Some new forms of employment involve prolonged economic insecurity and bad working conditions, notably in terms of lower and less certain incomes, lack of possibilities to defend one's rights, lack of social and health insurance, lack of a professional identity, lack of career prospects, and difficulties in reconciling on-demand work with private and family life. 

In our increasingly digitalised world, low-qualified people, but also white collars and those not in education, employment, or training (NEETs), not only have diminished employment opportunities, but are also more vulnerable to long-term unemployment and experience greater difficulties in gaining access to services and participating fully in society.

Large segments of society are frightened by digitalisation and globalisation and what it means for their future. We have seen this fear of change and economic uncertainty, playing a key role in the rise of populism, mistrust towards politics and the recent votes for Brexit and Trump.

Traditional forms of employment may be obsolete and no longer a reality, but we still need a proper adaptation to the new world of work so that social cohesion and inclusiveness are guaranteed and can prosper, taking in account interconnections of the global market and high mobility of workers as well as migration flows.

So how should we respond to these changes and set in place regulation that protects workers while also embracing the many benefits of digitalisation? This is something that was discussed at a recent stakeholder lunch hosted by my office in association with the World Employment Confederation-Europe.

I believe we should start by adapting welfare states. Across Europe our welfare system was designed to linearly support people from school, into work and then into retirement.

Today this cycle is more fluid and the lines are more blurred. Welfare states are now asked to function as flexible assurance that can effectively support every phase of the individual's life, eg. by supporting income and access to services (health, housing) during forced inactivity, retraining, parental or care leave, with special attention to portability and to the local community.

We also need constant investment in life-long re-skilling for everyone in 21st century skills. This will require private investment alongside public investment. Investing in people is not just a social responsibility for today's companies, it is a business imperative and ensures that they will have the workforce and skills they need to support their business in the years ahead.

EU figures suggest that by 2020, 90 per cent of jobs will require some form of digital skills, so if we want to prevent a digital divide we need to address lack of IT skills - particularly among older workers. Intermediaries including the employment industry have an important role to play in upskilling people to ensure that they are fit for the labour market. 

In fact, I see a significant opportunity for public private cooperation (PPP) in supporting societal adaptation to digitalisation and in providing individual-tailored support services for employment, retraining and counselling, in order to speed up reassignment during inactivity periods.

Fears that digitalisation will lead to job destruction are also real. Latest OECD figures suggest that nine per cent of jobs will disappear due to automation, but there is also strong evidence that digitalisation in parallel creates jobs - especially for young people. 

The rise of online platforms for everything, from babysitters to accountants, opens up a completely new world of work and opportunities that need to be properly regulated to avoid exploitation.

We also have to rethink adequate representation for dispersed workers as well as appropriate health and safety legislation to cover remote, non-standard workers. To date, this type of PPP is still unevenly developed in Europe and we must work to strengthen it - particularly in those countries where unemployment levels are stubbornly high.

There is no silver bullet but partnership and innovation will be key alongside life-long learning and upskilling.

Matching the skills of workers with the needs of the workplace of course starts in schools and we must build strong links with educational establishments to teach youngsters not just the digital skills that they will need in tomorrow's economy, but soft skills such as problem solving and critical thinking too.

Ensuring that digitalisation delivers benefits for all citizens is an important element in maintaining social cohesion. We mustn't be afraid to pilot different projects in finding solutions and seizing the opportunity that the digital world presents. By recognising the potential pitfalls and setting in place appropriate regulatory measures, I believe that Europe can take a lead in the changing world of work.


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