The countries of Central and Eastern European countries are slowly embracing automation as a response to an aging population and shifting demographics.
Over the past 15 years, the region has seen a rise in the automation of mid-level, routine tasks.
Slovakia and Czechia have led the shift due to the hefty presence of the automotive industry, which is typically highly automated.
Countries in emerging Europe are following similar trends as those in the West, but with major differences in education and lifelong learning strategies, fully adopting automation continues to prove challenging, and is creating imbalances on the labour market.
“The key change that is being driven by technological progress on the labour market is that the automation is replacing humans mainly in performing routine tasks. These types of tasks can be found in manual jobs and will typically be jobs in factories such as machine operators and assemblers,” says Piotr Lewandowski, from the Institute of Structural Research in Poland.
Machines can also complement those who perform non-routine jobs, such as managers, as they allow them to work more productively.
In 2019, the Vienna Institute for International Economic Studies (wiiw) warned that a labour crunch is expected across the entire European Union. This critical point, in which labour demand becomes equal to labour supply, will hit most of the EU, but especially those countries in emerging Europe.
One of the ways countries have deal with this is by investing in automation. While emerging Europe is not yet at the same level of automation as the West, it does seem to be catching up.
“Automation in this region has picked up in the last 15 years: you see that in the statistics. It’s mainly manufacturing but it’s happening. The number of robots per worker is 55 per cent of the average in Western Europe. Countries like Czechia or Slovakia are a little bit closer to the Western European averages but that’s because they have big automotive industries. We can expect a convergence here and the investment in automation will be increasing over time,” Mr Lewandowski continued.
The demand for automation solutions is clearly rising, according to Michal Blazek, director of marketing at Slovakia’s Photoneo.
“There is a continuously growing number of companies that invest in vision-guided robotic solutions or look to autonomous robots to help them with supply chains. Another factor is the lack of qualified workforce. Our clients are often struggling with this and are often relieved when they take the brave step to automate processes previously done by humans,” he tells Emerging Europe.
There is interest in automation in the Balkan countries too, especially in the area of construction.
“In the last five years there has been an uptick in [the interest in automation] in the construction sector. With labour costs and electricity costs going up, there will be more and more automation in this area,” says Zoran Tatomirović, from Tesla Sistemi in Belgrade.
But as with any technological advance there are those who could potentially be left behind.
While conventional wisdom says that it is low-skilled workers who at the highest risk of automation, experts point out this is not necessarily true.
“Industrial robots are overwhelmingly deployed in sectors with middle or higher skills requirements and their penetration is very limited in those manufacturing sectors (such as textiles, food, beverage) where the majority of low-skilled workers are employed,” wrote Zoltan Cséfalvay in a 2019 study published in the European Planning Studies journal.
It’s these so called “middle skill” routine jobs that will be most affected. These include manufacturing jobs but also the more cognitive side of routine work, such as office admin tasks.
This could be a particular pain point for emerging Europe.
“What is very special about Central and Eastern European and Balkan countries is that they have kind of specialised in global value chains in these routine jobs, quite often cognitive ones. We have a lot of data entry and call centres, opened by or servicing multinational corporations in [countries such as] Poland, Slovakia, Croatia. We differ from Western Europe in that there, the number of these routine cognitive jobs has been declining for the last 30 years whereas in our part of the world they have actually be increasing,” Mr Lewandowski says.
He goes on to warn if that if these jobs were to be automated or outsource centres closed, the region could see rising unemployment despite the labour crunch.
One way to counteract this is through upskilling. This refers to the teaching of new skills to existing workers in the hope of reducing skill gaps and helping the development of new skills.
But upskilling hasn’t really taken off yet in emerging Europe.
“Lifelong learning isn’t really that popular and that intensive. It’s a big challenge for the emerging Europe countries to address the ongoing change in the structure. Participation in adult education is actually quite low in comparison to Western European countries,” Mr Lewandowski warns.
There are positive developments, however. The Croatian Presidency of the Council of EU, which began on January 1, has named lifelong learning one of the main objectives of its programme:
“A dynamic labour market requires the acquisition of new skills and competencies that in turn require lifelong learning and training to increase productivity, innovativeness and competitiveness. Croatia will encourage discussion on increasing access to lifelong learning and on developing and improving skills to increase the productivity of those who are employed and the employability of those who are unemployed.”
Whether it will now get the chance, given that the EU’s priority has shifted towards fighting the spread and impact of the coronavirus, remains to be seen. Given that many people across the region face losing their jobs – at least for the short term – it could be argued that there has never been a better time to begin upskilling workers.
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