the future of work initiative · 2. fragmentation of production process / division of labour /...
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A global view on the future of work
Irmgard Nübler
Research Department
International Labour Organisation
Geneva
ILO initiative on the future of work Centenary Project
Four conversations
around the initiative
1
High Level Global
Commission
2
International Labour
Conference
3
2016 2017 2018 2019 Future of Work
Work and
society
Organization of
work and
production
Decent jobs
for all
Governance
of work
Worldwide Research Network
UN system
Universities & Research Institutes
Think Tanks Policy makers
Regional and country offices Changing
World of Work
• University of Witwatersrand, South Africa
• IPEA, Brazil • Harvard & MIT, USA • CASS, China • IHD, India • IAB, Germany • Oxford, UK
Outline of presentation
I. Mega trends that impact on the future of work – climate change
– Demographic dynamics
– Technological change
II. A dynamic framework – job destruction,
– job creation
– capabilities
III. The role of the education systems - Human capital
- Collective capabilities
- R&D, national innovation system
I. Mega trends (1): Demography
Economic old-age dependency ratio (ratio of the population aged 65+ to the working-age population aged 15–64)
Source: ILO calculations based on United Nations World Population Prospects, 2017 revision.
I. Mega trends (2): Climate change
National ecological footprint and working poverty, 2012
Source: ILOSTAT and Global Footprint Network’s 2016 National Footprint Accounts.
I. Mega trends (3): Technological changes
Since the Industrial Revolution in 18th century market forces drive labour-saving technological change.
• Industrialisation: shifting production from workshops to factories, and production of goods and services for particular clients to standardised products for the market.
• Firms compete in prices and quality rather than in individual design and problem solutions.
• Competitive pressures drive search for new technologies to enhance productivity.
I. Mega trends (3): Technological changes
Since the Industrial Revolution in 18th century market forces drive labour-saving technological change.
• Industrialisation: shifting production from workshops to factories, and production of goods and services for particular clients to standardised products for the market.
• Firms compete in prices and quality rather than in individual design and problem solutions.
• Competitive pressures drive search for new technologies to enhance productivity.
The Future of Jobs in industries
Two long-term trends of productivity enhancing technological change in industrial production mode:
1. Mechanisation / Automation / Robotisation / artificial intelligence / Cobots / Smart production systems (industry, agriculture)
2. Fragmentation of production process / Division of labour / Specialisation / Global Value Chains / New Business models / Sourcing
• Replacing jobs (non-routine, cognitive), Augmenting tasks
• Off-shoring (service jobs), In-shoring (manufacturing jobs), crowd sourcing (IT-enabled services),
• Increasing complexity of jobs
The Future of Jobs in industries
• Replacing jobs (non-routine, cognitive),
• Augmenting tasks
• Off-shoring (remote service jobs, R&D, design ),
• In-shoring (manufacturing jobs),
• Crowd sourcing (IT-enabled services),
• Increasing complexity of jobs at high level occupations (machine human interface; management, hybrid occupations, inter-cultural communication)
II. A dynamic framework: Shifting techno-economic paradigms
Evolutionary Economics:
Technological change: a complex, non-linear process of creative destruction
Techno-economic paradigms (Dosi, Perez, Freeman)
Current paradigm: digitalization, robots, internet
Developing of micro-processor beginning of 1970s
Different phases:
Process innovation – the disruptive phase
automation, fragmentation of production processes - Rising productivity, jobs
loss in existing industries, rising inequality, financial bubbles, institutions
Product innovation – creative phase, structural transformation
Phasing out and search for new paradigm
II. A dynamic framework: job creation phase
Product innovation – creative phase, structural transformation transformative changes in consumption and production structure, new institutions emerge, new industries emerge
Most new jobs are not created in the sectors where jobs are destroyed.
– New capital goods industries – tech-industry, robots, software
– leisure industry, travel, sports, and games
– R&D
– New business model (e.g. Big Data, Internet of Things)
• But: Wide differences across countries in making the transition
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Dec
reas
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ufa
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ymen
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Increase in robots per million hours worked
Growth in robot density (changes in number of robots per million hours worked) and decrease in manufacturing employment as share of total employment (in percentage)
1993-2007
Capabilities for Innovation and Job creation
Social capabilities shape dynamics of product innovation and structural transformation
Capabilities to innovate are
a. embodied in the knowledge base of a society (not in physical sphere )
b. exist in collective forms of knowledge (not in skills of individuals)
– composition of skills and knowledge
• (diversity, complexity, specificity) – range of feasible new products that can potentially be produced
– Commonly shared belief systems
• (culture, ideologies, religion) – choices, attitudes, values
– Specific competences “inherited” in non-genetic way from past generation
• (e.g. precision, design)
– Rules and procedures embodied in institutions, routines
• Restrict and guide behavior of social group, provide incentives,
• Determine competences of societies to manage the process of change
c. accumulated in societal learning process,
Educational attainment structures shaping knowledge base of society
0
5
10
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25
30
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40
45
50
Austria Germany, United Switzerland Denmark Norway Sweden
Strong Middle
0
10
20
30
40
50
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France Portugal Spain Italy Canada New Zealand United States UnitedKingdom
Japan
Missing Middle
No Schooling Incomplete Primary Complete Primary Lower Secondary Upper Secondary Post-secondary
EAS shaping industrial structure : Developed countries
Evidence from developing countries: Capabilities to New technologies and c, GVCs and
learning to leapfrog
• New technologies create opportunities for developing countries to leapfrog
• Empirical evidence:
Countries with the right set of capabilities will be able to exploit these opportunities
Robotisation and jobs creation : Comparing South America and South East Asia
• The narrative: 1990- 2014 – South East Asian countries:
• entered emerging GVCs with manufacturing intermediates (diversification)
• increased economic complexity • accumulated capabilities to innovate • Diversified into two robot-intensive industries and learned to
compete – transport and electronic • Creating productive jobs
– South American countries: • supplied largely natural resources to GVCs • decreased economic complexity and de-industrialised. • Limited opportunities to develop capabilities to innovate and
catch up in manufacturing • Developed only one robot-intensive industry- transport • Loosing productive jobs
Change in economic complexity in Latin American and Asian countries, 1998-2008.
-1,5
-1
-0,5
0
0,5
1
South America Mexico
Asia
Source: The Economic Observatory (2017), MIT Harvard University
Robot Density across Countries in 2008 and 2014, High Density Countries (>0.5 in 2014)
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113
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0,50
1,00
1,50
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2014 2008
Source: International Federation of Robots, 2016
Robot Density across Countries in 2008 and 2014, Low Density Countries (<0.5 in 2014)
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0,10
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2014 2008
Source: International Federation of Robots, 2016
Distribution of robot stocks across the robot-intensive industries in South America and South East Asia, 2008-2015 (percentage)
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20,0
30,0
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50,0
60,0
70,0
Dis
trib
uti
on
of
rob
ot
sto
cks
(per
cen
tage
)
South America
2008 2009 2010 2011 2012 2013 2014 2015
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
Dis
trib
uti
on
of
rob
ot
sto
cks
(per
cen
tage
)
South East Asia
2008 2009 2010 2011 2012 2013 2014 2015
Source: International Federation of Robotics, 2016
Change in manufacturing employment as a share of total employment, 2000-2015
Latin America (14.7 to 11.7) Asia (13.4 to 13.3)
0
5
10
15
20
25
Mexico Argentina VenezuelaBrazil Uruguay ChilePuerto Rico Colombia PeruAverage
0
5
10
15
20
25
Malaysia Thailand Viet Nam Indonesia
China Philippines Average
Source: Trends Econometric Model database, ILO November 2016
III. The challenges for education systems
• Governments and societies need to develop strategies of how to translate the new wave of technological change into a future of work we want.
• Major challenge: – develop a vision and a consensus of society on the
way forward – develop capabilities that enable countries to innovate,
create new products and industries and thereby creating new and better jobs.
III. The role of education system • Supply the skills and competences needed in the economy to (high
productivity and competitiveness, and workers to be employable in existing jobs. – Technical skills matching demand – Core competences
• Develop capabilities to innovate
– Ensure teaching in a wide diversity of competences – Curriculum, teaching methodologies and technologies to develop core
competences of current techno-economic paradigm – IT skills, design skills, coding; discipline, resilience, creativity, curiosity, persistence
– Support belief systems, attitudes and mind-sets that support openness, change and innovation
– Develop craftsmanship and entrepreneurship – the mindset to perform at high level, and deep understanding and broad mastery of competencies
– Collaborate with regional business community and enterprises to develop skills ecosystems, establish R&D collaboration
– Develop institutions that align education and training policies with industrial, trade and innovation polices and share high productivity gains arising from new technologies with education system
Thank you
Irmgard Nübler
Research Department
International Labour Organisation
Geneva
Email: [email protected]
Skype: Irmgard.nubler
Twitter: IrmgardNubler
I. Trends in the world of work (2): Productivity-wage gaps and inequality
Gap between labour productivity and wage growth (percentage points)
Source: ILOSTAT
Trends in the World of Work: What jobs?
Source: ILO Trends Econometric Models, November 2016
Trends in the World of Work (3) shift of skill requirement
-10
-8
-6
-4
-2
0
2
4
6
8
10
World NorthernAfrica
Sub-SaharanAfrica
Latin Americaand Caribbean
NorthernAmerica
Arab States Eastern Asia South-EasternAsia and the
Pacific
Southern Asia Northern,Southern and
WesternEurope
Eastern Europe Central andWestern Asia
Ch
ange
in e
mp
loym
ent
shar
e b
y sk
ill le
vel
(per
cen
tage
po
ints
)
Shift of skill requirement of occupations, 2000-2017 (percentage points)
Low skill Medium skill High skill
The Future of Jobs in crafts production mode
Crafts mode of production:
pre-industrial organisation of production
Increasing demand for crafts products – Artisanal production (competing with mass production – tailor, baker,
carpenter)
– Customised, tailor-made production (repair, health, beauty, )
– Individual solutions for industries (installation, construction)
Crafts people compete mainly in craftsmanship (design, creativity, solutions)
New technologies and innovation: to augment craftsmanship and to reduce price
Jobs profile increasingly complex, broad range of manual and cognitive tasks,
Vocational training system to develop craftsmanship