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Digitalization, Jobs, and Convergence in Europe: Strategies for Closing the Skills Gap

Brussels – The pace of technological change is arguably faster than ever before, but while new technologies are diffusing at a faster pace, the benefits of these technologies have seemingly not been widely shared. Recent aggregate productivity growth has been sluggish compared to the early stages of the digital revolution, median wages have decoupled from productivity growth, and income convergence has faltered.
In a new report for the European Commission, Carl Frey and Thor Berger look at the polarisation of the job market due to the decline in middle-skilled jobs, the impact of automation, the types and numbers of new jobs being created and the digital skills shortage affecting some EU countries. Substantial investment and changes to education and employment policies are needed, they say, to ensure the benefits of digital technologies are widely shared.

The potential scope of automation recently has expanded beyond routine work as technological advances in Machine Learning (ML) and Mobile Robotics (MR) have brought a wider range of more complex tasks into the domains of computers (Frey and Osborne, 2013). These technological advances may affect job creation and skill demands in Europe over the next decades. According to some estimates, as many as 54 percent of current jobs in the EU27 could be computerized as a result; including many low-skill jobs in construction, logistics, and services (Bowles, 2014). The implications of these trends are also already being widely perceived by firms: for the fourth survey in a row, the perceived importance of automating and/or improving business processes had increased in the McKinsey Global Survey—in the most recent wave, more than half of respondents cite it as a top-three priority for their organization (McKinsey, 2015).

Although technological change is rapidly destroying jobs and transforming others, it also creates entirely novel types of jobs and industries; app development, big data analysis and software design are all examples of new work created in the wake of the digital revolution.

Meanwhile, forecasts suggest that there will be a shortfall of digital professionals, which may lead to as many as 756,000 unfilled vacancies in ICT jobs by 2020, of which around 226,000 are at management level, though such estimates have a wide margin of error (Tobias Hüsing, Werner B. Korte, Eriona Dashja: e-Skills in Europe - Trends and Forecasts for the European ICT Professional and Digital Leadership Labour Markets (2015-2020). empirica Working Paper, November 2015).

The report can be downloaded at: