Digitalisation and the future labour market: An opportunity for the CEE region

There is a need to focus on education for the young, as well as lifelong learning for the broader population in the CEE region, so that individuals are well placed to take advantage of the labour market changes underway.

The author Rishad Tobaccowala states that the future does not fit into the containers of the past, yet this does not stop many politicians and labour organisations trying.

Although 2023 is the European Year of Skills, the major professional focus for many in Central and Eastern Europe is what occupations will be made obsolete by technology, and AI in particular.

Everyone from lawyers and accountants to actors and painters are set to be replaced by AI, or so the story goes in the popular media. Yet this is an exercise in searching for the wrong answer to the wrong question.

Governments, businesses and citizens alike all need to harness the power of digitalisation, while supporting innovation and labour market developments, in order to increase efficiencies, cut costs and save time. Furthermore, the idea of a “job” is changing and both companies and individuals are demanding more flexibility and choice.

Labour markets need a shake up

The idea of work being synonymous with a physical location and individuals selling hours to one employer nine to five for five days a week is a common yet outdated concept.

The structure of work has its origins in the Industrial Revolution when the social reformer Robert Owen extolled the virtues of “Eight hours’ labour, Eight hours’ recreation, Eight hours’ rest” in 1817. Very little changed for 200 years until the Covid-19 pandemic and an increased use of technology opened up new possibilities and opportunities for workers.

Furthermore, more jobs will be created than are lost to digitalisation. World Economic Forum (WEF) data shows that by 2025, 97 million jobs will be created while 85 million will be lost to technology. What is more, the jobs that are expected to disappear are those that are classed as dull and repetitive such as data entry, basic bookkeeping and assembly jobs.

Unfortunately, instead of preparing workers for this ongoing transition, a number of groups led by left-leaning politicians and trade unions are trying in vain to shield jobs from technology, and hold back the tide of change, rather than embrace it.

The benefits of new platforms and services

Digitalisation is giving rise to a whole host of services which bring benefits for companies, individuals and society.

These range from digital paltforms which match companies to talent with specific knowledge and skills like Nerdapp, Appjobs, Temply, Traxlo and Distributed to ride hailing and food delivery apps like Bolt and Wolt which allow individuals to earn extra money.

Individuals have a greater opportunity than ever before to make money from selling their knowledge, expertise and services than ever before quickly and easily.

These “gigs” allow people to indulge a passion, test new ideas for a business and have several revenue streams open simultaneously which allow them greater flexibility and choice as to when, where and how they work. This open talent model also allows workers to receive better and more regular feedback. Tedious and disingenuous annual performance reviews are replaced by specific and often detailed analysis in what Matthew Mottola describes as “accelerated feedback loops” in the book The Human Cloud.

These are all elements that will play to the strengths of workers in the CEE region in an age where skills will take precedence over physical location.

Moreover, an often overlooked reality is that technology and platform work allows migrants to more easily enter labour markets in the CEE region, while filling vital positions quickly and simply.

In addition to this being positive for financial reasons, the barriers to entry are low. If migrants sign up, undergo a few checks, and own often inexpensive equipment – such as a bicycle for delivery services or tools for contractor apps – migrants can hit the ground running and find a job relatively quickly. 

Time to focus on skills

Overall there is a need to focus on education for the young, as well as lifelong learning for the broader population in the CEE region, so that individuals are well placed to take advantage of the labour market changes underway.

The days of leaving school, or learning a trade, and this education being sufficient for the rest of your working life are gone. In many sectors today, skills are obsolete within 18-24 months. The focus needs to be on soft skills, as well as attaining digital skills which allow individuals to interact with computers and machines.

Policy makers and politicians must create an environment that is conducive to the future of work and the possibility that technology is creating in the CEE region.

The technical skills that already exist across the region – in tandem with the growing innovation climate – represent a huge opportunity for the whole region in terms of economic growth. As always, the opportunity of a lifetime needs to be taken in the lifetime of the opportunity. The clock is ticking for CEE leaders to create the framework to harness this labour market and future of work revolution, rather than hinder it.

They would do well to recall the words of Brutus in Shakespeare’s Julius Ceasar when he said: “we must take the current when it serves, or lose our ventures”.

This article was co-authored by Katarína Cséfalvayová, Director, Institute for Central Europe and Former Chair, Foreign Affairs Committee of the Slovak Republic.

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