By Guillermo Dutra

Digitalization expands, it is changing the way we live and work, and has an impact on organizations and employment management. Changes are fast, intense, demand adaptability and skills to seize the opportunities that arise.

Weeks ago, statements by Guy Ryder, ILO General Director, matched my vision on Digital Economy: “we must learn from history and analyze what has happened with the first three industrial revolutions: after a period of turbulence and adjustments, we were able to emerge from them in a better situation than we started, with more jobs and better life quality”.

Digitalization expands, it is changing the way we live and work, and has an impact on organizations and employment management. Changes are fast, intense, and demand adaptability and skills to seize the opportunities that arise. Companies must compete with organizations that base their production on design, algorithms, IoT, digital platforms, Big Data, Machine Learning, blockchain, and Cloud Computing.

It is impossible to understand economic and social development in the 21st century without considering new technologies, as this is the basis from which companies and workers will built digital transformation. Both segments are in a point of inflection that forces them to adopt a Smart and collaborative performance; otherwise, the result will be social and productive exclusion.

Though it is true that the impact of new technology may cause a major displacement of workers, history has proven that in the short term it increases productivity and in the long term it creates new jobs, and shoots up the demand of a large share of existing jobs. This means that technology overcompensates the number of jobs it destroys.

This will bring along changes for the labour market, which shall depend on every country’s economic possibilities, on the way in which sectors and organizations are organized, on labour market regulations, and wages.

In order to prevent this article from being stuck in theory, or in my personal perspective, I would like to quote the last report published by McKinsey Global Institute. It states that by 2030 the world will be experiencing transformations that will either match or beat what we have seen in the past in terms of agriculture and industry.

Nevertheless, for the countries of that five continents that have been analyzed up to now – Mexico, Peru, Brazil, Argentina and Chile in Latin America – less than 5% of jobs will be completely automatized. Something similar will happen with the activities that currently make around 60% of current jobs.

In addition, from 0% to 30% of the hours we currently work may endure the same fate. This trend will start to decrease once jobs start turning into activities that involve people management, knowledge application, and social interaction; in other words, activities where machines cannot perform as well as humans.
Even if we do not consider automation, McKinsey expects there will be several sources of labour demand during this transition:

• Income and consumption increase among people from emerging economies.

• Aging population, which changes expending patterns mainly in terms of healthcare and personal services.

• Technology development, which will continue to grow, particularly in ICT, generating high income jobs.

• Investments in infrastructure and construction, as long as leaders aim at reducing existing gaps.

• Renewable energies forecast in the pursuit of energy efficiency and adaptation to climate change.

• “Marketization” of previously unpaid labour, which is now rather frequent in advanced economies.

Digital transformation is a one way path that demand using a proper compass so that companies may develop their online dimension as a result of the set of management practices that include ICT and the internet. This means we must understand that decisions made will be the result of data management, instead of results oriented processes.

Clearly, the government cannot be excluded from this analysis; it will play a key role to guarantee that labour markets and economies thrive during this transition. Data management will also have to be included by this sector to make sure that citizens and consumers have: transparent and participative institutions, accountability mechanisms, relevant policies to make sure there are equal opportunities, preventing monopolies, but, most importantly: to enable workers mobility.

In order to reduce fear and focus of the work of the future, instead of on the future of work, I shall conclude this article quoting another phrase. You cannot wait until a house burns down to buy fire insurance on it. We cannot wait until there are massive dislocations in our society to prepare for the Fourth Industrial Revolution”.

Source: El País

https://www.elpais.com.uy/economia-y-mercado/habemus-futuro.html