Over the past few months, we had the privilege of working on Malta’s National Employment Policy for 2021-2030. Malta is currently close to full employment.  Malta has sustained a strong economic performance between 2012 and 2019 with continued fast growth rates and falling unemployment. This was not by chance but as a direct consequence of a bold set of reforms that have realigned Malta’s diversified economy into one that is more services-based. In our research, we identified six key drivers of change that are impacting the world of work on a global level and in these articles, I will be sharing our research on these global matters as I believe that any country and economy, especially a fast-growing one like Rwanda, will require to prepare itself for these changes to respond to these deep forces.

As discussed in my previous articles which focused on the impact of digital transformation, there is no doubt that digital & automation will transform the world of work.

Digitalisation has been reshaping economic activity across all sectors and regions for the past four decades, impacting developed and developing countries alike. It has clearly emerged as the most important driver of innovation, competitiveness, and economic growth. Technology has now permeated every sphere of social and economic activity. It underpins all the major trends that are transforming the global economic system: globalisation, shifting consumer behaviour, mobility, and availability of information. 

Although the digital revolution started at least four decades ago, with several radical developments that completely revolutionized economies and societies, the pace of this change was rapid but consistent, allowing for some degree of absorption of each key change before moving on to the next. Since 2010, however, the cumulative effect of digital change has been intense, and economies have struggled to cope with the ramped-up pace of change. More than in the previous phases of digitalization, it seems that businesses barely have time to absorb and adopt one set of changes before another new wave of transformational technologies has arrived. 

This rapid onset of change is having a profound impact on the global labour market, characterized by international organisations such as the OECD and the ILO as a ‘digital transformation’ that brings with it inherent risks and opportunities that require careful management at national policy level. 

There is consensus across the leading international bodies that digital transformation is inevitable, increasing in breadth, scope, and pace, and is now critical to economic growth. In terms of employment and the world of work, there is further agreement that this needs not be viewed solely as a negative force endangering jobs and livelihoods. Rather, if managed effectively in policy terms, it could bring opportunities to improve access to labour markets. 

OECD estimates suggest that one in ten jobs could be automated, while another 25.0 per cent could undergo significant change because of automation. Data further suggests that four out of ten jobs created in the past ten years were in digital-intensive sectors while for those countries that experienced declines in employment, most of the job loss was in less digitally intensive sectors. New jobs are appearing such as big data specialists, app developers, social media managers, and Internet of Things (IoT) architects.

The latest reports by the ILO, the OECD and the European Commission highlight the need to manage digitalisation on two levels, both of which are key to averting negative impacts on the labour market and maximising the potential of this transformation. First, by facilitating the take-up of digitalisation and automation by businesses across industries. This is not only indispensable to economic strength but also crucial in employment terms since vibrant, competitive industries and enterprises create jobs. Secondly, in terms of labour market policy, the OECD, and the ILO point to the polarising effect of digitalisation away from medium-skilled jobs and into low- and high-skilled jobs. Looking forward, however, low-skilled workers are the likeliest to bear the cost of digitalisation. Except for health and education caregiving roles, the risk of automation declines as educational attainment skill levels rise. The main issue here, highlighted by all international organisations, is that low-skilled workers are also the least likely to access training and therefore are most at risk of the disruptive impact of digitalisation. 

The OECD’s recommendations generally align with those of the ILO and the European Commission. All three characterise the best way forward as being an acceptance that change is happening and cannot be reversed, followed by the setting up of an ‘adaptation agenda.’ This can be summed up under four main pillars:

 • Equip people with a specific skillset to thrive in tomorrow’s economy – in a digital world, workers need a different set of skills especially cognitive, digital and emotional. Workers also need to harness the ability to deal with change and to continue learning. 

• Embrace life-long learning – with the pace of changes accaelerating, everyone needs to engage in a process of life-long learning to remain relevant in tomorrow’s working world. 

• Improve social protection to ensure that no one is left behind - social protection, particularly for non-standard forms of work, needs to be adapted to eliminate damaging incentives and to ensure that emerging risks can be managed efficiently and equitably. This notably requires income and employment support for displaced workers and, more generally, individuals experiencing unemployment or irregular earnings patterns.

• Address concerns around emerging forms of work - labour market regulation needs to be updated where necessary to reflect new forms of work, and new approaches may need to be devised. There should be neutrality between different types of employment in terms of regulation, taxes, and benefits.

The pace of technological disruption is unprecedented. The impact of Covid has only accelerated this and generated new forms of work too. Traditional sectors are being transformed through technology and new areas of digital transformation are going to continue disrupting several sectors such as retail, manufacturing, and financial services. The Rwandan economy has already harnessed the power of technology and it is now focused on ensuring that the economy becomes digital to the core and for this to materialise the world of work needs to embrace it fully. 

The writer is a co-founding partner of Seed, an international research driven advisory firm with offices in Europe and the Middle East.

www.seedconsultancy.com |

 jp@seedconsultancy.com