The Overseas Situation Report Friday 30 July 2021

by Mike Evans

“Creating better humans will always be more important than creating smarter machines.”  

– Gary Kasparov

We have all heard of how the pandemic has had an effect on businesses around the world. Some against the odds have prospered and some like Amazon and Netflix have seen profits soar. However, across the world there are many who have seen their livelihood disappear during the pandemic. For many businesses the need to downsize has also taken a toll on their ability to employ people. One of the biggest issues to come out of the Covid 19 era is the lack of employment opportunities to the young.

In a recent report by Eurostat data they found that 1 in 6 young adults in the European Union were not in employment, education or training (NEET) in 2020. On closer investigation, young women were more affected than men. In the EU the report found that The Czech Republic and the Netherlands had the lowest NEET rates. The share of NEET young people had been falling since 2013. But 2020 saw the figures go in the other direction. “This sudden change reflects the economic downturn related to the COVID-19 pandemic,” according to Eurostat, the statistical office of the European Union.

This report echoes much the same as the report by the World Economic Forum called The Future of Jobs. After years of growing income inequality, concerns about technology-driven displacement of jobs, and rising societal discord globally, the combined health and economic shocks of 2020 have put economies into freefall, disrupted labour markets and fully revealed the inadequacies of our social contracts. Millions of individuals globally have lost their livelihoods and millions more are at risk from the global recession, structural change to the economy and further automation. Additionally, the pandemic and the subsequent recession have impacted most of those communities which were already at a disadvantage.

The report’s key findings include:

The pace of technology adoption is expected to remain unabated and may accelerate in some areas. The adoption of cloud computing, big data and e-commerce remain high priorities for business leaders, following a trend established in previous years. However, there has also been a significant rise in interest for encryption, non-humanoid robots and artificial intelligence.

Automation, in tandem with the COVID-19 recession, is creating a ‘double-disruption’ scenario for workers. In addition to the current disruption from the pandemic-induced lockdowns and economic contraction, technological adoption by companies will transform tasks, jobs and skills by 2025. Forty Three percent of businesses surveyed indicate that they are set to reduce their workforce due to technology integration, 41% plan to expand their use of contractors for task-specialized work, and 34% plan to expand their workforce due to technology integration.

By 2025, the time spent on current tasks at work by humans and machines will be equal. A significant share of companies also expect to make changes to locations, their value chains, and the size of their workforce due to factors beyond technology in the next five years. Although the number of jobs destroyed will be surpassed by the number of ‘jobs of tomorrow’ created, in contrast to previous years, job creation is slowing while job destruction accelerates.

Employers expect that by 2025, increasingly redundant roles will decline from being 15.4% of the workforce to 9% (6.4% decline), and that emerging professions will grow from 7.8% to 13.5% (5.7% growth) of the total employee base of company respondents. Based on these figures, we estimate that by 2025, 85 million jobs may be displaced by a shift in the division of labour between humans and machines, while 97 million new roles may emerge that are more adapted to the new division of labour between humans, machines and algorithms.

Skills gaps continue to be high as in demand skills across jobs change in the next five years.

The top skills and skill groups which employers see as rising in prominence in the lead up to 2025 include groups such as critical thinking and analysis as well as problem-solving, and skills in self-management such as active learning, resilience, stress tolerance and flexibility. On average, companies estimate that around 40% of workers will require reskilling of six months or less and 94% of business leaders report that they expect employees to pick up new skills on the job, a sharp uptake from 65% in 2018. – The future of work has already arrived for a large majority of the online white-collar workforce. Eighty-four percent of employers are set to rapidly digitalize working processes, including a significant expansion of remote work—with the potential to move 44% of their workforce to operate remotely. To address concerns about productivity and well-being, about one-third of all employers expect to also take steps to create a sense of community, connection and belonging among employees through digital tools, and to tackle the well-being challenges posed by the shift to remote work.

In the absence of proactive efforts, inequality is likely to be exacerbated by the dual impact of technology and the pandemic recession. Jobs held by lower wage workers, women and younger workers were more deeply impacted in the first phase of the economic contraction. Comparing the impact of the Global Financial Crisis of 2008 on individuals with lower education levels to the impact of the COVID-19 crisis, the impact today is far more significant and more likely to deepen existing inequalities. Online learning and training is on the rise but looks different for those in employment and those who are unemployed.

There has been a four-fold increase in the numbers of individuals seeking out opportunities for learning online through their own initiative, a five-fold increase in employer provision of online learning opportunities to their workers and a nine-fold enrolment increase for learners accessing online learning through government programmes.

Those in employment are placing larger emphasis on personal development courses, which have seen 88% growth among that population. Those who are unemployed have placed greater emphasis on learning digital skills such as data analysis, computer science and information technology.

The window of opportunity to reskill and upskill workers has become shorter in the newly constrained labour market. This applies to workers who are likely to stay in their roles as well as those who risk losing their roles due to rising recession-related unemployment and can no longer expect to retrain at work. For those workers set to remain in their roles, the share of core skills that will change in the next five years is 40%, and 50% of all employees will need re-skilling (up 4%).

The public sector needs to provide stronger support for re-skilling and up-skilling for at-risk or displaced workers. Currently, only 21% of businesses report being able to make use of public funds to support their employees through reskilling and upskilling. The public sector will need to create incentives for investments in the markets and jobs of tomorrow; provide stronger safety nets for displaced workers in the midst of job transitions; and to decisively tackle long delayed improvements to education and training systems. Additionally, it will be important for governments to consider the longer-term labour market implications of maintaining, withdrawing or partly continuing the strong COVID-19 crisis support they are providing to support wages and maintain jobs in most advanced economies.

As the world starts to come out of the isolation that Covid 19 has forced on almost every country, the need to work will never be stronger especially for those who are now leaving school. With the world almost being on “stop sell” for 19 months it remains to be seem how long it is before those who have never had a job find the job which will help fulfill their dreams in a post covid world.

Until the next time stay safe.

Total Cases Worldwide – 196,988,941

Total Deaths Worldwide – 4,208,841 

Total Recovered Worldwide – 178,318,859 

Total Active Cases Worldwide – 14,461,241 (7.3% of the total cases) 

Total Closed Cases Worldwide – 182,527,700

Information and resources:

https://www.worldometers.info/coronavirus/

https://www.weforum.org/reports/the-future-of-jobs-report-2020/digest

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