Employment

A majority of Americans predict that within 50 years, robots and computers will do much of the work currently done by humans – but few workers expect their own jobs or professions to experience substantial impacts.

From self-driving vehicles and semi-autonomous robots to intelligent algorithms and predictive analytic tools, machines are increasingly capable of performing a wide range of jobs that have long been human domains. A 2013 study by researchers at Oxford University posited that as many as 47% of all jobs in the United States are at risk of “computerization.” And many respondents in a recent Pew Research Center canvassing of technology experts predicted that advances in robotics and computing applications will result in a net displacement of jobs over the coming decades – with potentially profound implications for both workers and society as a whole.

As a central effort in the Global Challenge Initiative on Economic Growth and Social Inclusion, this is a “how to guide” for companies to create social and business value. Drawn from a series of workshops and interviews with more than 35 executives from leading companies, and guided by the Forum’s Global Agenda Council on Social Innovation, this guide offers an action framework.

Today, we are at the beginning of a Fourth Industrial Revolution. Developments in genetics, artificial intelligence, robotics, nanotechnology, 3D printing and biotechnology, to name just a few, are all building on and amplifying one another. This will lay the foundation for a revolution more comprehensive and all-encompassing than anything we have ever seen. Smart systems—homes, factories, farms, grids or cities—will help tackle problems ranging from supply chain management to climate change. The rise of the sharing economy will allow people to monetize everything from their empty house to their car.
While the impending change holds great promise, the patterns of consumption, production and employment created by it also pose major challenges requiring proactive adaptation by corporations, governments and individuals. Concurrent to the technological revolution are a set of broader socio-economic, geopolitical and demographic drivers of change, each interacting in multiple directions and intensifying one another. As entire industries adjust, most occupations are undergoing a fundamental transformation. While some jobs are threatened by redundancy and others grow rapidly, existing jobs are also going through a change in the skill sets required to do them. The debate on these transformations is often polarized between those who foresee limitless new opportunities and those that foresee massive dislocation of jobs. In fact, the reality is highly specific to the industry, region and occupation in question as well as the ability of various stakeholders to manage change.
The Future of Jobs Report is a first step in becoming specific about the changes at hand. It taps into the knowledge of those who are best placed to observe the dynamics of workforces—Chief Human Resources and Strategy Officers—by asking them what the current shifts mean, specifically for employment, skills and recruitment across industries and geographies. In particular, we have introduced a new measure—skills stability—to quantify the degree of skills disruption within an occupation, a job family or an entire industry. We have also been able to provide an outlook on the gender dynamics of the changes underway, a key element in understanding how the benefits and burdens of the Fourth Industrial Revolution will be distributed.

The European Union seems to be moving from one emergency to the next. Europe’s leaders are in crisis-fighting mode: reactive, improvising, often uncoordinated – but ultimately modestly successful.
The Eurozone has not splintered; Russia is smarting under Western sanctions; some burden-sharing on refugees has been agreed. Busy with short-term problems, however, Europeans have taken their eyes off more profound, long-term challenges. How the European Union copes with its immediate problems in the next couple of years will determine how the continent will fare in decades to come.
In this White Paper, we – the Global Agenda Council on Europe – are analysing some of the most pressing issues confronting the EU in 2016-2017. We present the choices that European leaders must make in the years ahead and explain how these could shape the Union’s medium to long-term development. To illustrate how different policy choices interact, we have drawn up two fictitious scenarios of how the EU could evolve in the next 10 years.
The immediate economic concerns that dominated the European agenda in 2008-2014 are lessening. The cyclical upswing in the European economy, however, must not make governments complacent about the need for reforms. Faced with stagnating or shrinking working-age populations, European countries simply must fix their productivity problem to generate long-term growth. In innovation and digitization, Europeans often seem obsessed with data privacy and protection rather than grasping new opportunities. The European Commission’s laudable attempts to integrate and improve EU markets – for example, for energy and capital – have so far been slow to get off the ground. The arrival of millions of migrants, asylum seekers and refugees is a great opportunity for an ageing Europe, but only if governments, together with the private sector, act swiftly to help the new arrivals find jobs.

Using updated population forecasts, this paper presents alternative growth scenarios for South Africa up to 2035, and their implications for employment, politics and poverty. ‘Bafana Bafana Redux’ is the expected current trajectory. This scenario takes into account the impact of policy incoherence and the electricity supply crisis on South Africa’s long-term prospects. With concerted effort and much greater focus, an improved future, dubbed 'Mandela Magic Lite’, is possible – but neither scenario has a significant impact on structural unemployment. South Africa will only achieve long-term stability and prosperity with a leadership committed to inclusive political and economic practices.

Income inequality is rising. A quarter of a century ago, the average disposable income of the richest 10% in OECD countries was around seven times higher than that of the poorest 10%; today, it’s around 9½ times higher. Why does this matter? Many fear this widening gap is hurting individuals, societies and even economies. This book explores income inequality across five main headings. It starts by explaining some key terms in the inequality debate. It then examines recent trends and explains why income inequality varies between countries. Next it looks at why income gaps are growing and, in particular, at the rise of the 1%. It then looks at the consequences, including research that suggests widening inequality could hurt economic growth. Finally, it examines policies for addressing inequality and making economies more inclusive.

This book addresses the rising productivity gap between the global frontier and other firms, and identifies a number of structural impediments constraining business start-ups, knowledge diffusion and resource allocation (such as barriers to up-scaling and relatively high rates of skill mismatch).

Analysis based on micro and industry-level data highlights the importance of reallocation-friendly policies, including well-functioning product, labour and risk capital markets, efficient judicial systems, bankruptcy laws that do not excessively penalise failure, housing policies that do not unduly restrict labour mobility, and improvements in public funding and organisation of basic research which do not excessively favour applied vs basic research and incumbents vs young firms.

The present Report offers ideas on how to shape the forthcoming period of Community support beyond the year 2020. The analysis builds on the report “The future of Cohesion policy – Report I” which reflected on the challenges and developments at the local and regional level, focusing mainly on the efficiency and effectiveness of implementing Cohesion Policy (CP). The present Report looks at concepts and models of CP (mainly its territorial dimension) and points out the main current challenges that are most likely to shape the future economic, social and territorial structures.

This second Report in the study series offers ideas on the future of CP. It is structured around two main parts, the first on models of growth, cohesion and well-being, and the second on new ideas and choices for EU CP. Thus projections and assumptions – in particular in the third section of the Report – are of a long-term nature. The present Report largely builds on an extensive desk research including a comparative literature review as well as relevant analyses and reports carried out by the authors of this paper. In addition, the analysis is fed by the results of an online survey carried out with stakeholders who took part in the seminars on the future of CP. Finally, independent interviews were carried out with relevant stakeholders with deep insight and considerable experience in the field of CP.

The past 50 years was a period of exceptionally rapid economic expansion. Average per capita income almost tripled, and the global economy expanded sixfold in GDP terms. But the long-term growth outlook is extremely uncertain. Some observers raise the issue of challenging demographics; they talk about “secular stagnation” and express doubts about whether future growth can match its rapid upward trajectory of recent decades. Others point to the transformative impact of technology and paint a more optimistic picture. The debate about growth goes even deeper and broader than this. Many question whether—and how—growth can be sustainable and inclusive. There is a lively discussion about whether GDP is the right measure of growth. Amid such debate, it is difficult for policy makers and businesses to respond effectively.

In this report, the McKinsey Global Institute (MGI), which has studied growth in 30 industries in more than 20 countries over the past 25 years, reviews patterns of global growth over the past half century, focusing on the two key drivers of that growth—labor and productivity. Our broad finding is that, in the face of declining population growth that is putting pressure on the pool of available labor, the rate of GDP growth is set to be 40 percent lower than its rate over the past 50 years. To compensate fully for weakening labor growth would require productivity growth to accelerate by 80 percent from its historical rate. Drawing on five detailed sector case studies, we find that it is possible—but extremely challenging—to boost productivity growth by this margin. However, aggressive action would be needed to enhance competitiveness, harness technology, mobilize labor and further open up and integrate the world economy. Collectively, we need to engage in a frank conversation about the tough trade-offs that such action would entail.

The industrial structure of European economies and the types of occupation that they support are changing. This change takes many forms in different national contexts, but there are some common themes. There has been an increase in service-sector employment, both in low-skilled customer service work and in high-skilled ‘knowledge’ occupations, and a corresponding drop in manufacturing employment. This has contributed to a ‘polarisation’ of the workforce in many countries, with more high-skill and low-skill jobs but fewer requiring mid-level skills. At the same time, young people are finding it increasingly hard to get a foothold in the labour market, and the proportion of the workforce employed on full-time, permanent contracts has shrunk.

Some of the changes are cyclical, the result of recession followed by a stuttering recovery. The rise in temporary work, for example, might be expected to recede when European economies are again growing strongly enough to bring unemployment down towards its pre-recession level. Other changes, however, are the result of major structural forces operating in the global economy: the rapid pace of technological innovation, globalisation and demographic change. These forces are likely to continue to cause dislocation and disruption in European labour markets for the foreseeable future. As a result, there will be a fundamental shift in the types of jobs that are available for workers and in the skills demanded by employers across Europe. Understanding the likely changes in the European labour market over the next decade is essential if policymakers and firms are to set Europe onto a path towards permanently lower unemployment through the creation of many more well-paid jobs.