Fss 2016 background note

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Foundation Seminar Series 2016
The impact of digitalisation on work:
Building up national agendas for better implementation of digital changes
Background note
Since 2003, Eurofound has undertaken a ‘tripartite learning scheme’ – the Foundation Seminar Series
(FSS) – as a platform and opportunity for discussion and the exchange of experience and knowledge
among tripartite teams comprised of national representatives of trade unions, employers and
governments. This series of seminars is based on the concept of a tripartite learning scheme aimed at
gaining and interactively exchanging existing knowledge, comparing practices and inspiring and
facilitating better informed policy and decision-making based on a better understanding of national
situations. The overall aim is to contribute to the realisation of a better social Europe through social
dialogue.
This year, Eurofound has proposed that the FSS provide a platform to discuss and learn about the impact
of digitalisation on work and the implications for changing work organisation, skills at work,
employment and working conditions in both public and private sectors of activity at any level.
Digitalisation is one of the key drivers behind economic and social change which is taking place faster
than ever before. There are many examples of digital technologies that are profoundly transforming
sectors, production models and work organisation. Estimations of the positive potential economic impact
based on efficiency gains and increased competitiveness are high. This includes the creation of jobs as
well as predictions of job losses in the short term. The digital shift is also impacting on the employment
distribution between occupations and required skills.
The digital age raises questions for policy debates and decision-making on how European economies and
societies can adapt in order to develop the full potential of the benefits and how to manage the process in
order to minimise disruptive effects. The implementation of the current digital shift and its implications
should be steered and shaped in a sustainable and fair direction.
This is the reason why digitalisation is the topic of one of the six strategic areas of intervention selected
by Eurofound in its new Programming Document 2017-2020 (The digital age: opportunities and
challenges for work and employment). Given its areas of expertise in industrial relations, employment,
living and working conditions, Eurofound can provide scientifically sound and unbiased, timely and
policy relevant knowledge in the challenging field of digitalisation.
Why this topic?
Digitalisation refers to the integration and application of different digital technologies and innovations
across economic and social domains. It can be broadly understood as the mass adoption of digital
technology through connected services and devices. Although they are often synonymous,
‘digitalisation’ generally refers to a wider concept of the transformation of social systems (countries,

organisations, economies, etc.) by the widespread adoption of digital technologies, whereas ‘digitisation’
is more restricted to the process of digitising something in particular (such as scanning a document).
There are many definitions of digitalisation, sometimes referred to as the ‘Digital Revolution’ – making
an implicit connection with the Industrial Revolution. For the sole purpose of arriving at a common
understanding of the concept, we suggest using a working definition of digitalisation (or digitisation)
meaning the process of converting specific pieces of information into a digital form that can be
processed by a computer. When applied to social systems or organisations, digitalisation refers in a
broader way to the transformation brought about by the widespread adoption of digital technologies in
such a social system or organisation.
It is not yet clear if the digital change will constitute the next step in human progress but what is widely
accepted is that we are witnessing the birth of an unprecedented era with an increasingly accelerated
pace of innovation and change. Research literature and expert opinions on this vary from predictions of
irreversible changes in our societies to a gradual but rapid adaptation to the impact of the advances of
digital technologies and innovations. As part of the discussion on the future of work, some authors argue
that the current on-going transformation is different this time around because of the different nature and
scope of the digital revolution and all its broad implications.
Equally, there is a consensus that digitalisation constitutes a driving force that can transform the way in
which we produce, deliver and consume goods and services, including the jobs needed for this economy
and new business models. This means changes in economic development, types of business and
production which inevitably affect levels of employment, wages, job quality, skills, working conditions
and social protection. Furthermore, technological change and new forms of work are transforming
employment relations. Concepts like ‘job’, ‘employer’, ‘worker’, ‘self-employed’, and ‘workplace’ are
changing and the boundaries are becoming blurred.
Digitalisation processes are taking place right now, affecting institutions, policy-makers, social partners
and future generations. On the one hand, the digital revolution can play an important role in accelerating
growth, increasing productivity and competitiveness and facilitating job creation in sectors.
Digitalisation reshapes corporate strategies and business models in companies. It is changing the
relationship between companies and customers and has profoundly affected efficiencies by redefining
the way in which companies organise and manage their assets and resources – for example, using
automation or outsourcing. Digitalisation impacts on all sectors and industries. While the potential
benefits in terms of increasing competitive advantage, productivity and changes in the workplace are
extremely far-reaching in some sectors – notably traditional sectors such as textiles, construction,
energy, the automotive industry and services – the effects in other activities are more uneven.
On the other hand, however, the risks associated with digitalisation focus on the threat of a growing
divide between digital insiders and outsiders depending on their capacity to adapt to a new environment.
While Eurofound research shows that some new forms of work can contribute to job growth, the digital
transformation may also lead to a growing polarisation within the workforce and society. Then again,
digitalisation could contribute to reducing inequalities, too. For example, some new forms of work, such
as crowd employment, may lead to better integration in the labour market of specific groups of workers.
It depends on the way internal and external factors are managed, as well as the application of the right
policy mix.
The digital revolution brings both great opportunities and certain risks. Fully exploiting these
opportunities and minimising the risks require adequate policies in a range of areas which should be
discussed in tripartite settings. For policymakers and stakeholders, dealing with the right political tempo
and strategies to implement the appropriate and balanced policies is the difficult task that lies ahead in
order to turn adverse effects into advantages and arrive at more inclusive and cohesive societies. This

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responsibility demands adequate time for discussion, analysing strategies and setting priorities for
managing all the changes arising at sector and company level, as well as in labour markets, jobs and
working conditions – not to mention the social implications in terms of social protection, education and
pensions systems. It is for these reasons that Eurofound’s stakeholders represented in its tripartite
Governing Board have decided to make ‘Digitalisation’ the topic of the 2016 Foundation Seminar
Series.
Changes in production and global markets
Digitalisation presents a huge challenge to economies and businesses as it is changing production
systems and markets at a rapid speed. New technologies, processes and products are profoundly altering
the world as we know it. Advanced robotics, 3D printing and other machines are modifying the way in
which the traditional manufacturing production operates. Cloud computing and the internet emphasises
the crucial role of being connected and sharing the information processed. Other technologies such as
biotechnology or nanotechnology impact on the outputs and products. All these digitalisation processes
are game changers: disrupting industries, services, businesses models, jobs and the skills needed for
these jobs.
At sectoral level, digitalisation is setting in motion important restructuring processes in most sectors,
including the manufacturing industry, but also in services such as the financial sector. New business
models based on digital technologies, like the collaborative economy, become part of the acceleration
process and will drive a fast-changing market for goods and services. The very nature of these
businesses (matching platforms, technological applications or traditional employers) is at the centre of
current debates and disputes with regard to working conditions and the level of protection of workers.
Certainly, there are searching questions to be raised when discussing the future of work and the role of
labour law in the changing environment for businesses.
Impact of digitalisation on labour markets and employment levels
Digitalisation and technological innovation are usually considered to be disruptive phenomena in labour
markets. On the one hand, there is evidence to show the positive effects of the introduction of ICT into
economy, work and society in the last century. Technological progress resulted in higher productivity,
adaptation and changes in work organisation and production, and while this led to job losses there was
also the emergence of new jobs in new sectors offering cheaper products – leading to increased
consumption and consequently more economic growth.
Given that digitalisation triggers the creation of new industries, production processes, business models,
work organisation and new products and services, mainly with a view to increasing efficiency and cost
reduction in production and delivering, many tasks and jobs will disappear or substantially change.
Conversely, digital developments and the emergence of new players in the markets boost
competitiveness and arguably lead to the creation of new jobs, as has happened with the evolution of
employment in ICT (Eurostat 2015; OECD 2015).
The impact on job creation per sector varies greatly, depending on the effect of digitalisation on the
business model, the potential clients, the production cost and the overall organisation. However,
estimations cannot be done purely on the basis of jobs won and lost, as the new forms of work is
significantly altering employment as we conventionally know it. For example, ICT- based mobile work
will in fact result in different work organisation and skills needs, while crowd employment will result in
a shift from job to tasks.

Turning to the manufacturing industry in particular, automation and robotics as part of on-going
technological processes substituting tasks or even entire jobs usually emerge as the main reasons for
employment losses. Certainly, other jobs may be created in industry and services – even in the same
sector, as part of the value chain or as a consequence of the digital dynamism inspiring new
entrepreneurship. Nevertheless, as digitalisation moves fast and often entails disruptive effects, it
remains unclear if it will be able to generate sufficient demand for the workforce to compensate for the
expected job losses. It seems much more likely that a time delay is opening up between both parallel
processes of change.
Estimations on the size and impact of these negative effects vary in the literature from country to country
and continent to continent, as well as disparities on the current state of digitalisation in the sectors. Based
on the work done for the US labour market (Frey and Osborne 2013), subsequent adapted calculations
carried out for Europe (Bowles 2014) estimated that 40 to 60% of the EU jobs are at risk from
automation, with medium-skilled jobs considered most at risk.
Digitalisation, new business models and employment relationships
Apart from the amount of jobs which will be affected or displaced, there is growing concern about the
increasingly important new business models and the consequent forms of employment linked to these
activities. There is no doubt that companies based on online platforms challenge the traditional economy
and pose radical questions on the future of work, workers’ right and labour law. These virtual
organisations are quick to optimise on-demand services by using online platforms with networked crowd
workers distributed through internet platforms, regardless of geographic boundaries.
The traditional definition of employment relationship does not sit well with these forms of labour. The
criterion of legal subordination established more than one century ago to protect the manufacturing
worker is no longer suitable for the new type of isolated workers who may have much more autonomy in
their tasks. Furthermore, the notions of traditional hierarchy and work organisation in companies are
seriously questioned when it comes to the case of workers in the digital environment who are required to
be creative, innovative and proactive in structures that may not be ready enough for it.
The blurring of time and workplace boundaries gives rise to new ways of working and new forms of
employment, highlighting the need to further analyse the status of the workers employed: examples are
telecommuting or telework, ICT-based mobile work and crowd employment. Freelance forms of work
also raise the importance of self-employment as a potential increasing status in this new digital era and
the need to further analyse the social and labour implications.
Digitalisation and working conditions
Beyond the key notion of ‘subordination’, the characteristics of many of the new jobs created in the
collaborative economy and other related forms of economic activity stirs up other core elements of the
employment relationship affecting working conditions.
Crucial aspects include the wage-setting mechanism and pay, the working time ‘pack’ (working hours
and duration of work and rest periods), health and safety issues and the relationship between work and
private life. The rise in mobile working, in particular, has upset the classical working time framework,
pointing to the issue of unpaid overtime hours. What is expected to ensue is a new social progress due to
digitalisation and ICT developments, such as a better work–life balance through reducing the stress
associated with commuting in large cities and facilitating workers with a disability to work from home.
However, it is also suspected that the friendly and flexible ‘anytime and anyplace’ working model may

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easily turn into an ‘always and everywhere’ trap for some workers – with negative effects in terms of
psychological health (stress, burn-out, etc.).
To what extent will the digital revolution increase the real autonomy of every worker – in contrast to the
legal concept of subordination – is still under discussion and depends on the sector or specific business
activity. Increasing work intensification can be identified as another controversial issue within the
evolving working conditions in the digitalised platforms. Other than individual working conditions, at
collective level, well-established EU acquis in labour legislation and workers’ rights may be questioned,
too.
What skills for the digital era?
The need to rethink the provision of skills in the digital revolution is widely acknowledged by all key
players and institutions. The implementation of digital technologies will target different types of jobs.
Some of them involve routine tasks and many of them will be replaced by machines.
Others jobs will demand the adaptation of existing skills and require more cognitive tasks, thereby
raising the demand for workers with problem-solving and creative skills. Digital transformation will
increase the risk that a substantial proportion of people currently lacking elementary e-skills will not be
employable in the new digitalised labour environment. E-insiders and e-outsiders are becoming a new
sub-category of the already segmented European labour market.
It is agreed that the digital era requires new skills for the new jobs to be created and therefore up-skilling
is an indisputable aim. Much more difficult to estimate and organise are the reskilling needs that will be
required to support workers who are and will be made redundant as a consequence of job losses. Some
studies (ILO 2015) and surveys (OECD 2013) suggest that medium-skilled routine jobs are in decline
while there is also an increasing demand for lower-skilled workers performing physical jobs and higher-
skilled workers doing non-routine jobs. Other analyses (Deming 2013) suggest that employment and
wage growth has been strongest in jobs that require high levels of both cognitive and social skills.
Again, a threat to polarisation emerges as evidence suggests that older workers would be among the
worst affected because they tend to lack the skills needed to relocate into the new digital jobs.
Rethinking the skills need is not related only to the possibility of job losses: workers have to strengthen
their e-skills to accomplish their tasks at work and negotiate productivity gains and thus wages increases.
The impact of digitalisation goes beyond the workplace, as it will undoubtedly transform many of the
skills needed in the coming years. A long-term perspective is required, anticipating the skills needs of
future generations as well as developments within both sectors and companies. According to the OECD
Survey of Adult Skills, nearly one in ten individuals aged 16 to 29 lack elementary e-skills and these
data are confirmed by other estimations related to the population in the EU. Therefore, the connection
between today’s standard of education, vocational training and the type of skills needed in the digital era
needs to be reviewed and amended accordingly.
New learning schemes and patterns, along with innovative and online methods of e-delivering education
and in-job training, would be required. Moreover, lifelong learning is likely to become much more
crucial within the context of an ageing workforce. Sustainable work policies need to be designed and
applied with a view to delivering balanced transitions over the life course, providing general and specific
digital capabilities at different stages and with different intensities. A key challenge for national
authorities and stakeholders across Europe is how to bring about the massive investment in digital skills,
both in the education system and in workplaces.

Impact of digitalisation on public and social services
New technologies are changing the lives of both providers and service users. In particular, the digital
revolution is changing the design and delivery of public services with implications for the relationship
between providers and users of services. New goods and services are emerging in this field with huge
consequences for living and working conditions and social cohesion. Services are changing to meet the
needs of older people, especially those with disabilities, or younger people excluded from employment
or families or migrants. The question raised with regard to this digitalisation process is whether it makes
services more or less accessible and affordable.
Eurofound research in areas and topics related digitalisation
Eurofound is currently developing a number of research projects closely related to the impact of
digitalisation in the field of employment and working conditions, as well as in industry:
 Eurofound and the ILO are working on a joint project focusing on the effects of telework/ICT-
mobile work on working time, work–life balance, performance and health and well-being, i.e. work
carried out outside the employers’ premises. It is also looking at policy initiatives that have emerged
as a consequence of the spreading of the phenomenon and its consequences. The project aims to map
the incidence and effects of working outside the employers’ premises using ICT and its effects in ten
European countries and five countries from other parts of the world.
A new project in 2016 focuses on strategic employee sharing which was identified in recent
Eurofound research (New forms of employment, 2015) as a new employment form having good
potential to align employers’ needs for flexibility with workers’ needs for security and stability.
Currently, this employment form is not widely used across Europe due to lack of awareness of the
concept and unfavourable framework conditions, while other – for workers less favourable – flexible
employment forms are more widespread. The project will explore the type of link, if any, between
employee sharing and digitalisation, since the former seems to be more related to a different
employer-employee relationship than new ‘digital jobs’.
 The Pilot Project, ‘The Future of Manufacturing in Europe’, delegated to Eurofound by the
European Commission, takes its point of departure from the digital technological developments
currently occurring in Europe. While much is made in the public debate of the digitalisation of
services it still is the case that, as in previous waves of technological development, it is
manufacturing industry that leads the way. This is made obvious when one observes that most of the
game changing technologies, such as 3D printing, the Internet of Things and nanotechnology are
most immediately applicable to manufacturing. The Pilot Project focuses on the potential impact of
these changes in terms of the employment in various sectors, the regional distribution and the
implications for skills.
 Data from the sixth European Working Conditions Survey (EWCS) related to the effects of ICT and
other technological developments on working conditions of specific groups, like e-nomads, will be
analysed in the context of the 2017 activity ‘The digital age: opportunities and challenges for work
and employment’. In-depth case studies on ICT-based mobile work to complement this quantitative
analysis could follow in 2018.

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References
Bowles, J. (2014), ‘The computerisation of European jobs – who will win and who will lose from the
impact of new technology onto old areas of employment?’ Bruegel blog, 17 July 2014.
http://www.bruegel.org/nc/blog/ detail/article/1394-the-computerisation-of-european-jobs/
Brynjolfsson, E. and McAfee, A. (2014), The second machine age: work progress and prosperity in a
time of brilliant technology, New York, NY. WW Norton & Company.
Deming, D. (2015), The growing importance of social skills in the labour market. National Bureau of
Economic Research (NBR). Working Paper No. 21473. Issued in August 2015
Eurostat (2015), ICT specialists - statistics on hard-to-fill vacancies in enterprises
http://ec.europa.eu/eurostat/documents/341889/7086793/ICT+specialists+-+statistics+on+hard-to-
fill+vacancies+in+enterprises+March+2015/482c04b8-1481-4e56-842d-a881f055f051
Frey C.B. and Osborne M. (2013), The future of employment: how susceptible are jobs to
computerisation?. Oxford Martin School
http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf
International Labour Organisation (ILO) (2015), The changing nature of jobs - World Employment and
Social Outlook. Geneve
OECD (2013), OECD Skills outlook 2013: first results from the survey of adult skills. Paris: OECD
OECD (2015), OECD Digital Economy Outlook 2015, OECD. Publishing, Paris. DOI:
http://dx.doi.org/10.1787/9789264232440-en
WEF (World Economic Forum) (2016), The future of jobs. Employment, skills, and workforce strategy
for the fourth industrial revolution.
http://reports.weforum.org/future-of-jobs-2016/

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