Technology creates unemployment

Labor market policy

Wenke Klingbeil-Döring

Dr. Wenke Klingbeil-Döring lives and works as a freelance philosopher, author and editor in Berlin.
Her main research interests include the importance and change of gainful employment, digitization, the conditions for decent work design, the developments and consequences of labor market and social policy as well as social transformation processes and crises.

How is digitization affecting the German labor market?

We experience digitization as a dynamic, open and multifaceted development that is difficult to pin down and predict. This is all the more true when it comes to the question of how digitization will affect the German labor market. In addition to the diverse influences, the Corona crisis is further accelerating digitization in Germany and it is here that opportunities and risks are revealed.

Use of data glasses in aircraft construction (& copy picture-alliance / dpa)

The basis of a digitized job market

Digitization in Germany is advancing: 86 percent of German citizens now use the Internet; with an increasing tendency also professionally. For many employees, dealing with digital technologies has become a matter of course in their everyday work, but work in Germany is far from being completely digitalized. As a direct consequence of digitization, four main developments have an impact on the labor market: (1) the mechanization of work, the change in (2) business models and (3) work organization as well as (4) the change in the required and sought-after skills and qualifications. How digitalization actually affects the labor market depends above all on how it is structured, how far it penetrates the economy and work, and also on the specifics of the German economy and the German labor market.

Various studies show that Germany as a business location is well equipped for digital change. According to a survey by the digital association Bitkom, nine out of ten companies see digitization as an opportunity. The digital index of the Initiative D21 e. V. states that 39 percent of employees see potential in digitization for new job developments in their work environment. According to an employee survey commissioned by the Bertelsmann Foundation, employees in Germany are very open to digitization and the changes it causes in their everyday work. The qualifications as well as the willingness to learn and develop of the employees and the task complexity are generally high across all industries in an international comparison. Even though Germany is not considered a pioneer when it comes to digitization, there are many indications that accelerated digitization will have a positive effect on growth and employment, provided that appropriate investments in technology and innovations as well as a corresponding education and infrastructure policy are implemented.

Skilled workers shortage instead of technical unemployment

Against the background of current labor market forecasts, the often feared job cuts are currently not to be expected. Even if machines and computers take on more and more tasks and activities and thus supposedly less human labor is required, the digital change will in all probability not cause an increase in unemployment. According to a forecast by the Federal Ministry of Labor and Social Affairs (BMAS) on the development of the digitized world of work, the future labor market will differ by more than 16 percent of all jobs from today's, but this is offset by a decline in the employable population of 58.9 million people In 2019 to 55.4 million people in 2035 and the workforce is aging. This development not only compensates for the decline in labor supply numerically, it also creates a labor shortage. In the MINT and health sectors in particular, the shortage of skilled workers is expected to worsen.

New quality, new needs

Overall, it is less the quantity and the quality and character of gainful employment that will change, in all sectors, occupations and at all skill levels. Instead of technical and inevitable unemployment, a shift in fields of activity and a professional and then also labor market structural change are to be expected, which particularly affects vocational training. Where modern information and communication technologies (ICT), networking and the bringing together of human and technical skills enable new business models and products, new professional and activity fields emerge. Others disappear or are devalued or upgraded. Where jobs are replaced by technologies in one place, the demand for labor is growing elsewhere.

The potential for substitution of the individual occupational segments - how much they will likely become replaceable as a result of technological change - can be predicted in the approach: According to a model calculation by the Institute for Employment Research (IAB) from 2019, manufacturing and manufacturing technology occupations have priority over company-related occupations Services, activities in corporate management and organization as well as transport, logistics and trade professions have the greatest potential for substitution. Professions in the fields of construction, health and safety, but also social and cultural service professions are hardly affected. In general, digitization strengthens the service sector and accelerates the structural change that is already underway in the economy and the labor market in this direction; in particular on the basis of new business models such as sharing platforms or services that complement or expand products (so-called smart services).

Less routine, higher demands

The proportion of routine activities or those that are monotonous or particularly physically stressful will decrease. The manufacturing sector is particularly affected here: while the value-added share of industry remains at a high level, its share of employment is falling. On the one hand, a particularly large number of activities can be substituted here by the use of machines or ICTs, on the other hand, international competition is forcing companies to exhaust the possibilities of digitization and automation as much as possible. This affects, for example, auxiliary and commercial activities or work for the control and maintenance of machines and systems. On the other hand, according to the forecasts, growth in online retail has hardly any effect on the number of employees in retail or in the transport professions. Increases are expected above all in qualified, complex or social activities that cannot be replaced by technologies that require genuinely human skills and that are directly related to coping with new social and economic challenges. Technology-related new, highly qualified job profiles emerge, for example in the areas of digital engineering, digital management, data science, e-commerce and online marketing. With the informationalization of economy and society, i.e. with the spread of technologies that open up new and more comprehensive ways of conveying information and knowledge, the need in the media-related, humanities and social science professions is growing in addition to IT and scientific professions. Demographic change, migration and the dynamic development of professional competence development also strengthen health, social and teaching professions, because with them the need for services for qualification, integration, inclusion and care grows.

New career paths

Despite the changed demands on and from companies and employees and a general increase in flexibility, the forms of employment hardly change under the influence of digitization. Since the mid-2000s, the proportion of atypical forms of employment such as temporary, contract and part-time work or marginal and temporary employment has barely increased compared to traditional full-time employment. Solo self-employment and the phenomenon of crowdworking are also much less widespread than one might assume in view of the broad discussion about them. However, they stand for the fact that in a more flexible working world, multiple employment, interrupted or hybrid employment histories, i.e. H. those that are determined by multiple changes between self-employed and dependent employment are increasing. Here, the digital change harbors a risk with regard to individual protection, because the social security systems are still geared towards continuous and, in particular, dependent employment.

New working conditions

The development of material working conditions, d. H. At the moment it is difficult to foresee wage levels, the design of remuneration systems and job security, because the economy and labor market policy have a particularly strong influence here. Digitization itself also holds out the prospect of growth in added value and wages through increased efficiency and productivity. Highly qualified people still have better income prospects than low-skilled people, especially in the MINT professions. It is unclear whether a shortage of skilled workers in a certain area will have a positive effect on wages in the future.

The realignment of working conditions in the immediate work environment, such as the use of digital technologies, is the most visible and tangible element of digital change for most employees. Depending on the degree of digitization, innovations in work design are currently being used to a greater or lesser extent in companies or industries. In addition to digital companies and start-ups, digital and flexible forms of work and organization are currently most widespread, especially in companies in the transport and logistics sectors, as well as in banks and insurance companies, as well as in business-related services, the media and in connection with information and communication technologies. Accordingly, digitization is already having a strong impact on everyday work, while in most industries digital technologies are initially primarily used for customer communication, order acquisition or information procurement and brokerage; for example in the handicrafts, in the construction industry or in the social and teaching professions. Digital tools or robotics are by no means a comprehensive part of work activity: The use of robots and artificial intelligence (AI) is already relatively far advanced in industry; elsewhere, for example in care, in craft or in the construction industry, it is currently in tested in various pilot projects.

Flexible, efficient and needs-oriented

With the possibilities of digital technologies and the bringing together of changed economic, social and individual demands, work can be designed to be efficient and needs-oriented at the same time. Company, customer and employee interests can be balanced against each other. This is based on the assumption that digital change can only succeed if employees support it and help shape it, if they are willing and able to change and innovate and also have the space and opportunities to contribute creatively, in a formative or demanding manner. Thus, of all things, the mechanization of work could bring people back into focus and cause corporate cultures to change accordingly: away from rigid organizational structures, hierarchies and a culture of presence, towards individual solutions, teamwork and an open culture of recognition and results. With the networked computer connected to the Internet as the most important work tool, work can be structured variably in terms of time, location and content and can be adapted to individual or business needs. Wherever possible, flexitime models or working time accounts, teleworking in the home office or coworking spaces are gradually being replaced by fixed working hours and locations. In everyday work, digitization means that communication and information exchange intensify and intensify. On the one hand, work processes can be accelerated, on the other hand, many employees feel heavily stressed by this. In addition, forms of cooperation are also being reorganized.

New skills

In general, in the digital change - given its dynamism and openness - competence development and qualification become a criterion for success for companies as well as for employees. For some it is about competitiveness, for others about employability. According to the specification of the fundamentals, characteristics and direction of digital change, competence requirements and profiles change: In addition to digital and social skills, what is needed are primarily those that cannot be substituted by the use of technology or that enable people to deal with the complexity and dynamics of change . The digital change calls for continuous, interdisciplinary qualification and lifelong learning. At the same time, the new technologies offer new possibilities for this, for example through online-based learning groups, eLearning or the integration of robots, under whose guidance new skills and techniques can be acquired. In companies, however, these are still rarely, but increasingly, used.

Opportunities and risks of a digitized job market

Overall, it becomes clear that digital change has different and highly ambivalent effects on work and the labor market. Superficially, it offers the opportunity for business, society and the labor market to absorb and master the new demands and challenges. It makes it possible to increase economic added value and to maintain the global competitiveness of companies, while at the same time relieving employees and designing work in a way that is conducive to health and learning. Prerequisites for this are rapid implementation of digitization, ergonomic technology and needs-based work design; all in all a guarantee of the quality of work.

Because: It is precisely the openness and the multiple design and appropriation paths of digital change that carry the risk that opportunities turn into risks for companies, employees and for the working society as a whole. The potential of many technologies or business models is still difficult to assess and the entrepreneurial risk of bad investments is relatively high. There is also the risk that the new business models that the digital change is making promisingly possible, especially in medium-sized companies, will be at the expense of employees. The opportunities of digital change to shape business and work in an economically, ecologically and socially sustainable manner, for example through the virtualization of products and services, are also offset by the risks for data security and data protection.

At first glance, forms of work that are self-determined can worsen living conditions without legal regulation and participation in social security systems. The consequence would be that work no longer reliably provides social security, that individuals have to bear business risks disproportionately on their own and that people are dependent on social benefits despite extensive employment. Overall, the flexibilization and mobilization of work can on the one hand ensure good work design, more job satisfaction and a better work-life balance. On the other hand, if the boundaries of work are unclear, there is also the risk of overburdening employees and making work a health risk. Technical assistance systems and robots can close gaps in skilled workers, make physically difficult work easier and enable older or physically handicapped employees to participate in working life for longer, but they also carry the risk that personality, humanity and cooperativity are lost, which make up the work and the relationships associated with it. The increase in the complexity of tasks and the necessity of lifelong learning can also be seen as an opportunity, because it allows employees to develop personally, but only if they are not primarily responsible for their employability.

Labor market policy fields of action

The opportunities and risks presented by digital change for the labor market can be translated into various interrelated political fields of action. In the case of complex values ​​in relation to work and modes of appropriation, the employed must also be included in the design of labor market policy. In a complex, multifaceted and open change, scientific expertise and the social partners must also be taken into account. Indeed, in the digital transformation, labor market policy is closely accompanied by a broad socio-political dialogue.As part of various projects such as the dialogue processes “Work 4.0” (2015-2016) and “New Work - New Security” of the BMAS, the “Platform Industry 4.0” of the Federal Ministry for Economic Affairs and Energy (BMWi) and the Federal Ministry for Education and Research ( BMBF), the “Future of Work” project of the Bertelsmann Foundation and the “Future Dialog” of the German Trade Union Confederation (DGB), networks are created, as well as the challenges and possible strategies for coping with digital change, including studies, research, communication and information projects evaluated and discussed. The currently most important fields of action are employability and qualification, working hours, services and working conditions, health, work and data protection, co-determination, participation, independence and the welfare state. The aim is to create the legal basis for Germany to be able to use the added value potential of digitization with good work, participation and reliable welfare state and to maintain its international competitiveness.

The “Qualification Opportunities Act” (2018) and the “Work of Tomorrow Act” (2020) take up the growing importance of qualifications and the new requirements for ensuring employability in the digital age. Both aim to promote and strengthen in-company further training measures [to HB: link here to Chapter 5.3. Continuing Professional Education]. The “Work of Tomorrow Act” also regulates the digitization of the processes of the Federal Employment Agency (BA). The “Foreign Employment Promotion Act” (2019) enacted as part of the Migration Pact is intended to facilitate the integration of foreigners into the labor market in order to meet changing labor needs and to alleviate the labor and skilled labor shortage. The new requirements for company data protection are regulated by the IT Security Act (2015) and the EU General Data Protection Regulation (DU-DSGVO) (2018).

There is also a need for regulation in view of the flexibilisation of employment and forms of employment, which in some cases is associated with a precariousness of living conditions and exclusion from social security. The introduction of the statutory minimum wage (2015) only has a limited effect here because it does not apply to all forms of employment. The same applies to the social security systems that do not yet provide protection for the new forms of employment, or only to a limited extent, or not sufficiently, for example in the case of solo self-employment, hybrid forms of employment or fragile employment histories. With the “Parcel Delivery Protection Act” (2019), a corresponding regulation for the parcel industry was enacted in a first step; it is still pending for other areas.


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