Guy Ryder, Director-General of the International Labour Organization

Could a robot replace your job? Fears about technology’s impact on the labour market are nothing new. Way back before the International Labour Organization (ILO) came into being in 1919, the Luddites were one group of early-19th century English workers who destroyed the labour-saving textile machines which were replacing their jobs.

The anxiety that machines could kill millions of jobs in our globalized workplaces is real – and it comes at a time when the world economy is already facing a major employment crisis. The jobs gap in G20 countries stands at about 54 million and could expand to over 60 million by 2018 unless current growth trends improve.

Technology has reduced the labour required for mass production and is further hollowing out the job market by automating even routine legal and accounting tasks. Robotics is making a major breakthrough in manufacturing, with 200,000 industrial robots coming into use each year and a total of 1.5 million expected by this year (2015).

Digital technology, human workplace

Image: Robot arms work on a Porsche Macan’s body at the new plant in the eastern German city of Leipzig February 5, 2014. REUTERS/Tobias Schwarz

For developed and developing nations alike, it is clear that as globalization gathers pace, adding more supply chains operating in more complex regulatory environments with blurred geographic boundaries, no country can ignore the digital world without getting left out of the world economy.

So how can we keep the human dimension — in a world of work run more and more by robots? How can we best adapt the labour market and create decent jobs?

Fundamentally and critically, we need to anticipate upcoming technological changes and tackle the education and skills mismatch in labour markets. Globally, one third of employers surveyed complain of not being able to find the right skill sets to fill existing vacancies.

We must build solid bridges between the world of work and training providers, so that skills can be matched to market needs. This is not only a matter for public policy. Employers and trade unions must take more responsibility for investing in skills by sitting at the table with trainers and policy makers. Their talks must be informed by labour market information, employment services and performance reviews.

Adequate education and skills for countries at all development levels increases their ability to innovate and adopt new technologies. It means the difference between inclusive growth and growth that leaves large segments of society behind. A workforce that has been appropriately trained and is able to continue learning boosts investor confidence and thus job growth.

The employee-employer relationship has changed

Changes are inherent in the very nature of the relationship we have with an employer. Workers entering the job market are increasingly offered short-term or temporary contracts and are often forced to take informal work or emigrate for a job. This is exacerbating trends towards income inequalities.

Beyond training for workers in the digital era, sustainable economies require protections for workers in good times and bad. Along with adequate unemployment benefit systems, social protections such as healthcare and pensions form a basis for overall worker security and a healthy economy. Yet only 20% of the world’s population today has adequate social security coverage and more than half lack any coverage at all.

It has been proven that social protection can work as a buffer to mitigate the effects of economic crises. The ILO also advocates minimum levels of social protection as spelled out in its Recommendation 202 concerning national floors of social protection.

Post-digital values?

Established “pre-digital world” values, which are encoded in ILO labour standards, still apply in our post-digital era. In fact, they become even more relevant if the traditional employee-employer relationship becomes increasingly eroded in the future.

The evolving complexities of the world of work will require complex solutions. This is why last year I launched the ILO’s “world of work” initiative to try and provide a factual understanding for defining the trends ahead and discussing what needs to be done to establish the post-digital world we all want.

Our world has changed vastly over the past century and not only because of technology. By 2050, the global population will surpass 9 billion. The number of people aged 60 years and over will have tripled. Three-quarters of older persons will be living in what are now developing countries and the majority will be women.

Human brain, human brawn

This new demographic context has profound implications for labour markets, social security systems, employment and economic development.

For all the strides we’ve made since the Luddite era, we arrive back at the simple truth that the machines were and continue to be built by human brain and brawn. Now and going forward, the digital economy must be a sustainable one and it must be built on decent work which gives humans dignity. It is work which is productive and delivers a fair income, security in the workplace and social protection for men and women and their families.

Guy Ryder is attending the Annual Meeting 2015 in Davos, and is a panel member in the session Employment: Mind the Gap on 23/1 at 12.30 CET.

This article was originally published on the World Economic Forum website

Guy Ryder

By Guy Ryder, Director-General of the International Labour Organization

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“Leading through adversity”, “The Economic Malaise and its Perils”, “Creating Economic Dynamism” – these are some of the panels taking place here in Davos at this year’s World Economic Forum.

For many of us here these discussions boil down to this: How can the battered global economy bounce back and stay strong? 

There is no silver bullet, but what is clear is that we must create jobs and tackle income disparity as a matter of utmost urgency if we are to get back on our feet.

Doing nothing is something we simply can’t afford.

Allowing the jobs crisis to deteriorate further, particularly among young people, would sow the seeds of more social unrest and leave long-lasting scars on the very fabric of our society.

I believe this is a widely shared view among the hundreds of government and business leaders and civil society representatives gathered at the annual forum in the Swiss Alps.

The numbers are stark and getting worse.

The ILO’s Global Employment Trends 2013, which came out just a few days ago, shows that unemployment is on the rise again. This is not only affecting crisis-hit countries but is spreading to other regions.

The number of unemployed is expected to top 200 million this year. Almost 40 million have dropped out of the labour market because they are too discouraged to keep looking for a job.

Those regions that managed to buck the rising unemployment trend are often experiencing a worsening in job quality and an increase in the number of workers struggling to survive on their income.

The situation is particularly bleak for young people. Close to 75 million youth are unemployed, and more and more of them experience long-term unemployment right from the start, which seriously hurts their chances of a decent future.

Another recent ILO publication, the Global Wage Report 2012/13, shows that global wage growth has been slowing, increasing the risks of lower demand and slower economic growth.

At the same time, a bigger share of the national pie (GDP) has been going to the owners of capital, and less to workers.

No wonder public dissatisfaction and social unrest have reached dangerous levels. Everywhere I’ve travelled to over the past months – from Europe to Asia to Africa – I’ve heard the same messages: jobs are disappearing, inequalities are rising.

The ILO has warned for years that income disparity threatens to reverse the gains of globalization. The World Economic Forum has taken up this warning for the second year in a row. Its Global Risks 2013 report rates severe income disparity as the top risk facing the global economy.

Allowing wages to catch up to productivity is not only the fair thing to do; it also makes economic sense as it helps boost consumption.

Boosting consumption will in turn convince the private sector to start investing the trillions of dollars they have in reserves. Strong job growth will not come back until companies feel confident about the economic outlook.

To get there, policy-makers should concentrate on four interrelated issues: tackling political uncertainty, coordinating action to support demand, addressing labour market mismatches and focusing on youth unemployment.

This is not a regular, cyclical downturn that corrects itself automatically. Failure to act quickly and decisively could lead to many more years of gloom.