Globalization, digitalization, the rapid growth of new technologies, and negative demographic growth have given rise to fundamental changes that will affect the nature of work and have a significant economic and social impact.
The debate about the future of work has already begun with people talking about the fourth industrial revolution, referred to in the Czech Republic as Industry 4.0 and Society 4.0, otherwise known as Industrie 4.0 in Germany, Industrial Internet Consortium or Smart Manufacturing Leadership Coalition in the US and Industrie du Futur in France, while the UK has built a network of High Value Manufacturing Catapult centers and Italy the technology cluster Fabbrica Intelligente.
The designation “fourth” derives from the fourth fundamental shift, one that has affected not only the production of material goods but also the way administrative tasks are carried out, thus concluding a series of fundamental changes that have occurred in the following order: steam, electricity, computer controlled machines, and digitalization of management and administration.
The most recent of these changes—robotics and digitalization—re-lies on connecting the Internet, things, services, and people with a huge volume of data generated in the course of communication not only between people but also machines. More precisely, it might be defined as the evolution and exploitation of digital technologies and artificial intelligence to transform business models and yield sufficient returns and added value in a gradual shift of a variety of human activities into the digital world (eGovernment, eHealth, eCommerce).
Different demographic groups—in terms of age, education, nationality, and gender—will cope with the changing labor market situation in different ways.
The Gender Perspective Has Been Ignored
Although there have been many studies on the impact of digitalization on labor markets, they have largely ignored the gender perspective. Labor markets are viewed as gender- neutral despite the fact that current and projected developments present certain opportunities and threats that are not neutral as regards gender and are therefore likely to have an impact on the (un)equal status of men and women in society.
However, it is difficult to predict exactly what the impact of digitalization on labor markets will be, whether on a global level or, more specifically, for the Czech Republic. The impact of digitalization on the labor market comprises four basic effects: a) the creation of new jobs, including the emergence of entirely new branches of industry as well as new products and services; b) changes in working conditions (labor law), including new forms of interaction between human beings and robots and new ways of managing organizations and companies; c) entire jobs, or individual tasks they entail, becoming obsolete due to digitalization and robotics; and d) a shift in the traditional way employment, workplace, and working hours are understood, as well as types of entrepreneurship and businesses including digital platforms and the shared economy (such as Uber, Airbnb).
Labor markets are viewed as gender-neutral despite the fact that current and projected developments have an impact on the (un)equal status of men and women in society.
One might object that the evolution and emergence of new technologies in modern digital communication and robotics has been proceeding apace continually and that it is a natural development in the society and the labor markets. So how will this new development be different? First and foremost, the difference will be in the scope and pace of the changes it will bring about.
Just like every technological change in the past, the fourth industrial revolution (4IR) will make some professions obsolete, specifically those involving certain tasks that will be taken over by computer-controlled machines. However, expert opinion and research studies vary in the assessment of the extent to which the disappearing jobs will be compensated for by new ones that will be created.
The nature of jobs is changing, because rather than production of material goods, what is now crucial for economic growth is the production of knowledge and skills as well as the exchange of information.
Although they differ in the methodology used, as well as in their areal and structural approach, these studies all assume a high level of uncertainty and unpredictability. The following table summarizes the results of the most important studies that have tried to quantify the changes in terms of the ratio of jobs under threat and jobs likely to be newly created.
A summary of the estimated number of jobs created and becoming obsolete
In terms of the gender gap it is already possible to distinguish between the impact of digitalization on men and women, as illustrated by the following table based on a study of developed countries conducted by the World Economic Forum (WEF).
A summary of the estimated numbers of jobs lost and created, by gender
Whereas in the case of men for every three lost jobs one new job is gained, the ratio is even more marked among women, with five lost jobs replaced by one job gained. Quite certainly, the jobs that will become obsolete are those that rely on routine, manual labor, great and repetitive physical effort, and carried out in unsafe and unhealthy working conditions, or tasks that can be largely replaced by algorithms. The WEF study envisages the disappearance of jobs predominantly held by women that involve administrative and support tasks, while the growth potential is greatest in jobs that are less frequently held down by women (STEM, architecture, management).
Women Often Do Jobs that Require Social Skills
However, other studies have predicted the opposite trend, arguing that men are more often employed in professions (especially in manufacturing) that may be under threat of automation, while women often do jobs that require social skills, eye contact, and “the human touch,” in other words, those that are less susceptible to automation. In addition, it will be easier for women to enter professions that, due to “smart” technologies, require less physical strength.
Digitalization will enable women with small children to participate in the labor market.
Services are another area that is expected to have great growth potential, be it household services, individual care, or leisure and entertainment activities. This has come to be known as “the care economy,” in which typical traits of female workforce will come into their own: emotional and social intelligence, sensitivity to other people’s reactions, creativity, negotiating and persuasion skills.
At the same time, the increased use of robotics accounted for around 10 percent of the growth in GDP and 15 percent of the growth in productivity between 1993 and 2007, without resulting in any decrease in employment, while the median wage has gone up. Technical progress has made human labor more, not less, valuable.
We are thus facing two different developmental trends in the future of jobs and their impact on society: human work will be replaced by robotics, labor markets will cease to generate a sufficient number of jobs, leading to growing unemployment accompanied by social tensions and greater income inequality, which will threaten the social fabric.
The optimistic scenario for the future of jobs assumes that, while human jobs will be replaced by robots and machines, the extent to which machines can replace humans has, nevertheless, been overstated. Jobs done by humans that require flexibility, judgement, and common sense will continue to present a challenge to machines. At the same time, people are creative enough to generate new activities and forms of employment: the WEF suggests that around 65 percent of jobs to be held by future generations do not even exist as yet (The Future of Jobs, WEF, 2016).
Transformation of Jobs, or Change as a Permanent State
Changes in the nature and form of jobs, or their “flexibilization,” are indicative of the profound transformation of paid employment. The nature of jobs is changing, because rather than production of material goods, what is now crucial for economic growth is the production of knowledge and skills as well as the exchange of information.
The changing nature of jobs goes hand in hand with their changing form, be it in terms of choosing one’s workplace, flexible working hours and various types of work contracts, and their frequently changing character (part-time contracts, platforms). Employment is becoming increasingly flexible and characterized by “liquidity.”
New means of communication will enable new forms of distance-working and working from home, while the workplace is losing its firm contours. Nevertheless, the trend towards more flexible jobs must be viewed in a nuanced manner. Digitalization will enable women with small children to participate in the labor market. Working from home will pro-vide women with considerable autonomy in terms of working hours and the flexible organization of work and leisure time.
On the other hand, the risks arising from flexible working conditions are less well known: there is a growing danger of hyper-connectivity.
On the other hand, the risks arising from flexible working conditions are less well known: there is a growing danger of hyper-connectivity – the unlimited availability of employees that threatens to wipe out the difference between work and leisure time, which, in turn, will have a significant mental and psychological impact on individuals, such as stress and burnout.
As working conditions become more flexible, the differences in the impact of flexibility on men and women may become apparent: as a result of being granted greater flexibility, men tend to devote more time to work while women tend to use it for non-work related activities (family care, household chores). Ironically, digitalization might make the situation worse. Frequent job changes will result in rising employment-related “in-direct costs” (interviews, job search), which may place an additional burden on women in terms of time and obligations.
The prospect of isolation from society (or company) and colleagues for individuals working from home is another risk worth mentioning, although some analysts believe its impact is outweighed by the current advanced communication opportunities (video, online chat).
The Importance of Lifelong Learning, or Never Stop Learning
Success in the labor market and the elimination of risks arising from growing polarization will depend on access to and willingness to pursue lifelong learning, education, and retraining, particularly for people who are between jobs, the self-employed, and those on fixed-term contracts. Knowledge is ceasing to be static while the linear progression of education > employment > retirement is becoming obsolete.
Access to on-the-job training, in particular, depends to a large degree on the type of contract: workers with less standard working arrangements have more limited access to in-house training. Women, in particular, tend to be over-represented on the secondary market, which is characterized by less prestigious jobs, lower qualification requirements, low wages, inferior working conditions, and considerable job insecurity.
The access of men and women to training and education will be key to success in the labor market. Unequal access could further exacerbate gender inequality between men and women.
The access of men and women to training and education will thus be key to success in the labor market. Unequal access could further exacerbate gender inequality between men and women.
However, soft skills, such as motivation, perseverance, teamwork, self-discipline, and moral integrity will gain increasing importance in future, in addition to specialist knowledge. Lifelong learning, the need to re-train, and the ability to keep adapting to changing conditions will place a considerable psychological burden on some individuals. At the same time, employers will be exposed to a high degree of uncertainty with regard to investing in the systematic development of those of their employees on temporary or non-standard contracts.
In future, the importance of women as employees and consumers is set to grow, as women are responsible for over 65 percent of household spending, thus representing the largest single economic force. Employing women increases a company’s capital profits by 35 percent and shares profits by 34 percent. The Czech Republic has not yet fully exploited the potential of its female work force.
The further development of Czech society and its productivity will depend on improving gender equality and the quantity and quality of the workforce available to employers. Economic growth can build on a number of (gender-related) factors: the access of women to education, the greater availability of childcare services to eliminate long-term career breaks, the increasing opportunities for flexible working conditions including greater equality on the labor market by means of eliminating discriminatory practices and reducing the rigid segregation in the professions.
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