Wolfgang Kowalsky
The first industrial revolution was based on the transition from manual production methods to machines and the use of steam power (from 1800), the second industrial revolution was based on mass production and electrification (from 1840/60), and the third referred to computerisation (lean-production, kaizen). The new challenge is the digital revolution, in other words: fourth industrial revolution, industry 4.0, smart services, crowd-sourcing platforms looking for crowdworkers.
While there are bright and dark sides to digitalisation, from a progressive perspective the main focus must be put on the spectacular increase in productivity and its huge impact on employment and work. Digitalisation stands for a megatrend, that fourth industrial revolution, but also for a revolution in the services sector and both start to be quite disruptive. There is potential for major risks – in terms of monopoly building, mass redundancies, new possibilities of supervision and control, even of spying on employees, inadequate data protection, a new military-secret services & Silicon Valley complex etc. – and for major opportunities as well – new possibilities for better information, communication, participation and networking, etc. ‘Digital’ stands for a networked intelligent world, the internet of things (smart products, smart factories, smart logistics) and the internet of services (smart grids, smart mobility, smart health etc.).
It is of the utmost importance to steer digitalisation in a sustainable and fair direction before millions of jobs are jeopardised in Europe, adding to the already high level of unemployment, and before working conditions are dramatically affected. According to estimates, about 45 percent of total US employment is at risk. According to a note by Jeremy Bowles at the Bruegel think tank, around 45% – 60% of the European labour force might be affected by the risk of job automation. On the other hand, Digital Single Market Commissioner Andrus Ansip announced the creation of 3m additional jobs by 2018 in the App economy alone.
A European Forum On Digitisation
It is not too late to kick off a European dialogue over digitalisation. The future of work must be at the centre of any serious debate. The ETUC quite recently demanded that a permanent European Forum be set up composed of the European Commission, the European Parliament, and social partners to discuss how such a European digital vision can be developed and how to shape the future digital Europe, how to design industry 4.0, workplaces 4.0, smart digital services and good digital work, on the basis of a clear roadmap. The great digital transformation has to be steered in a sustainable and fair direction and new digital (crowd)work needs to be regulated.
Unfortunately, the European Commission seems not to understand the historical challenge of the digital revolution: In its Communication “A digital single market strategy for Europe” (6 May 2015) the Commission adopted the traditional internal market approach to ensure a proper functioning of the single market, to look for obstacles and burdens to be eliminated: in particular geo-blocking, insufficient cross-border e-commerce, high costs of parcel delivery (irrespective of fair pay, good working conditions etc.). Furthermore, the Commission announced its intention to adapt telecom rules, to ensure better interoperability and standardisation, to improve digital skills and to invite social partners to include the digital single market in their social dialogue at European level. The only concrete proposal is the launch of a European Cloud initiative. The Communication is without any ambition beyond eliminating internal market obstacles. Particularly striking is the lack of a truly European vision of digitalisation.
It’s Not Just About The Single Market
Strangely enough, the Commission even fails to deliver a clear analysis of the strengths and weaknesses of the digitising industries and service providers in Europe and their impact on jobs, in comparison to the US and south-east Asian countries which are world leaders in many information and communication technologies (ICT) domains and even dominate parts of the market. The main search engine (Google) has a market share of over 90% in all European countries; the EC in its Communication fails to deal with the need to confront this monopoly which heralds the abuse of a dominant position. Is a 90% monopoly compatible with the much-trumpeted “proper functioning of the internal market” or with the “social market economy” set among the objectives of the EU (article 3 TEU)?
The Commission approach is extremely narrow, focusing mainly on the experience of a travelling consumer at a time when the digital transformation is generating major disruptions in industries and services: for instance, new online services for taxis, accommodation, currency exchange and loans etc., transport by drones, nanotechnology, genetic engineering, but also digital tools like 3D-printers which allow one to manufacture with a mouse click; etc.
Putting the focus on obstacles is beside the point; it must be put on the future of work as digitalisation will change work fundamentally. To design the future of good digital work is a priority. More societal debate and research is needed to assess the impact of digitalisation in order to be better prepared, to seize opportunities and to confront risks.
The Future Of Work
What Europe needs is first and foremost a shared European vision of the direction in which digitalisation should evolve. Market integration through the removal of obstacles is only a tiny step towards the establishment of common regulations. A twin approach is necessary to steer digitalisation in a sustainable and fair direction, enlarge information, consultation and participation rights in digitising industries and services and create a new legal framework for crowdworkers. Crowdworking is part of a major transformation in the world of work. Crowdsourcing designates a phenomenon where companies outsource work or services through digital platforms to a big public (“crowd”) without offering a working contract but through a simple service contract.
The Commission approach is quite unbalanced, neglecting investment needs. Studies say that investments of €90bn a year is necessary to ensure that Europe keeps its competitive position, but the European Commission abstains from assessing investment needs. The huge investment gap stands in contrast with the 20% objective to strengthen the industrial base of Europe. Past industrial revolutions have materialised on the base of massive public investments embedded in a complex architecture of institutions constructed with the aim of taming capitalism and on the basis of an appropriate policy framework. The Commission seems to lack clear ideas about the necessary investment in the digital economy.
Digitalisation has, as we’ve seen, two different facets: it stands for the digital transition of traditional industries and services, but also the outsourcing of digital activities (crowdworking, etc.). Different approaches are necessary along these two dimensions, but at the same time synergies are needed to keep a holistic approach and the necessary coherence.
The Real Societal Challenges
It is vital to address the digital challenges not only from the usual narrow internal market perspective but from a societal point of view, including the need to shape the future of industry, services and high quality workplaces in Europe, based on an in-depth assessment of the current digitalisation process. The problem of increasing inequalities between the digital elite and “normal” workers and in particular the exploding number of crowdworkers can no longer be neglected.
A supplementary effort towards embracing the vision of fair digital work must be undertaken, as a lot of questions are still open: New digital business models and IT-governance must be designed in a way to enhance workers’ participation. Will digitalisation create new good jobs or destroy jobs? Will it lead to qualification upgrade or loss of skills? Will more cooperation be needed to counter increasing competition? What impact will it have on full-time and part-time employment, taking into account gender aspects, what impact on work-life balance, maternity and parental leave, sabbaticals, working time policy, income distribution, in particular income inequality, and last but not least on workers’ representation and organising? How can the power asymmetry between employers and crowdworkers be shaped? These questions provide a useful intellectual benchmark for thinking about the future Digital Europe. Some stakeholders demand a strong regulation of monopolistic digital platforms, and propose that big data must be open and algorithms fair.
The opposition between analogue and digital coming into fashion (digital skills, digital society, digital market, digital Europe…) has its limits as all digital competences have their fundaments in analogue competences, both being interconnected. Most of human societies were based on the accumulation of knowledge – and hence “knowledge societies” – from the Inca Empire via Aztec, Chinese or Arab Empires. Caution is necessary when the term digital is used as synonymous with modern and analogue with past. “Digital skills” are quite useless if not firmly embedded in analogue reading and writing skills; and a “digital society” exists as little as a “mechanical” or “electrical” one.
The Jobs Challenges Of The Digital Revolution
Digitalisation is not just a technological issue or a question of the market; it is also about the transition of traditional jobs to digital jobs in the industry and the services sectors; it is a question of the future society and its cohesion. It is quite worrying that there is no attempt to analyse the social impact of digitalisation on companies in general and labour in particular (Work 4.0), collective bargaining, social dialogue etc., which will be key to an innovative digital labour policy.
If crowdworking is not regulated, a return to 19th century working conditions might well happen: This growing part of the workforce is outside national labour law and is not covered by fundamental social rights. The extension of digital precarious work to crowdworkers working from home or other workplaces (telework, etc.) without any employment contract is alarming. Crowdworkers get no holiday pay, no sick pay, are not covered by social security. Crowdworking must be considered a new form of outsourcing of work through internet platforms and the dynamic increase of digital microjobbers, although still a peripheral phenomenon, necessitates a framework at European level. Some trade unions have recently established web-based platforms to assist crowdworkers. Amongst the inherent risks are the de-limitation of work (“always on”) and the de-limitation of companies with crowdworkers executing tasks from remote locations.
Digitalisation in Europe must be based on good – digital – work and the transition must be anticipated and managed in close cooperation with trade unions, European Works Councils and workers’ representatives in general. Good work in industry 4.0 or smart services needs to be based on a new social contract with democracy at the workplace. Digitalisation can potentially even have an emancipatory effect, through sensor technology, automation and robotisation of monotonous and repetitive tasks, increase in time sovereignty and time autonomy (e.g. shutdown of email-system after working hours) but so far the main driver of digitalisation and the major objective behind it is still cost reduction.
The Right Kind Of Regulation
New European regulation has to be developed on the basis of the aforementioned principles. Automation in Europe should not be about replacing workers but about new cooperation between workers and machines demanding different skills. Tools which can be used to anticipate and manage change are becoming more important, in particular information in advance of digital transformations and digital restructuring processes, consultation on the process and participation rights as well as forward looking training in digital skills. The impact of digital transformation on these tools needs to be addressed and discussed to adapt and re-shape them where necessary.
The Commission rightly proposes to improve digital skills. Good digital work indeed has potential in terms of upgrading digital qualifications and skills all along the value chain. This establishes a clear need for part-time leave for digital skills training which might be one issue amongst others (stress, accessibility around the clock, etc.) in the social dialogue on digitalisation. Despite the strong evidence that women’s active participation in the ICT sector is essential for Europe’s long-term growth and economic sustainability, a wide ICT gap in terms of gender and skills persists in Europe. Women in Europe tend not to take ICT studies and are under-represented in the sector, particularly in technical and decision-making positions. For a digital economy, it is crucial to create further education and training incentives for women and girls, from an early age, to learn to use and upskill in ICT, and to take careers linked to ICT with a view to applying these skills in the labour market. Nevertheless the Commission’s Communication is mortifyingly weak and a missed opportunity for European workers in the manufacturing and services sectors as well as for global crowdworkers.
