Research Findings

Digitalisation of work: Blessing for some, curse for others

January 31, 2018


by Andreas Kornelakis and Dimitra Petrakaki

It is a commonplace that we live in the age of disruption. The latest trend towards digitalisation is set to accelerate changes in the workplace and transform the labour market perhaps irreversibly. Current debates on the digitalisation of work concern the extent and degree to which advanced technology such as robotics, artificial intelligence, machine learning and algorithmic decision-making could substitute for manual labour. More worryingly, this is considered to be a potentiality that affects not only the manufacturing industry but also the services sectors and impact on knowledge-intensive jobs.

But technological innovations do not only lead to the displacement of jobs, they also change the nature of jobs. This transpired in research that we carried out, which examined the complex interplay between work autonomy, technology and routinisation. We examined the cases of two healthcare organisations in England that implemented a new technology (Electronic Patient Record system). We found that the introduction of new technology standardises the work to a degree and constrains the autonomy of high-skill professionals (such as doctors and nurses), but also reallocates task discretion between occupational groups. More broadly, digitalisation may increase work autonomy for some occupational groups, but also standardise work and lead to monotonous and repetitive tasks for other groups.

Some commentators emphasise the perspective of digitalisation as a ‘blessing’. It is seen as one of the key drivers to boost competitiveness and productivity, allowing businesses to operate with minimum costs, whilst ensuring high performance and minimal product defects and human errors. A recent publication from Nesta also highlights that digitalisation and automation should not be demonised given their potential to lead to job creation and to a re-focusing on skills that are more humane such as emotional intelligence and inter-personal skills. Proponents of digitalisation often paint an optimistic view of new digital technologies, ignoring the potential negative disruption on working conditions and societal outcomes.

However, a recent paper by Frey and Osborne finds that technological change drives jobs and skills polarisation in the labour market; with growing inequality between high-income cognitive jobs and low-income manual occupations. Furthermore, the OECD acknowledges that the growing digitalisation of the labour market through the ‘platform economy’ raises questions about wages, labour rights and access to social protections for the workers involved, while it also creates problems of unemployment due to the inherent potential of technology to substitute work. This may also reinvigorate fears of social risks for a ‘race to bottom’ in wages and working conditions and a growing ‘precariat’ as an emerging global class with no financial security, job stability or prospect of career progression.

Much of the pessimistic views are based on recent changes that Internet start-ups brought to traditional industries. The advent of the “sharing” or “platform” or “gig” economy is a case in point. This “Uberisation” of the economy introduced competition in sectors, which were thought to be sheltered and provoked anger from local professional associations and trade unions. At the same time, the platform economy introduced new network models of work based on instant scalability. Internet technologies may spill over to other sectors and disrupt more traditional industries. Prominent examples include the disruption of the hotel sector by Airbnb and the handyman sector by crowdsourcing platforms such as TaskRabbit.

Hence, digitalisation may be viewed as a ‘curse’ if the new jobs that are created are, in fact, low-pay/low quality jobs in the gig economy. Is this the future of work? Not necessarily. Companies like Uber and Deliveroo, follow a particular business model that relies on low competitive rates for ‘self-employed’ workers. They operate as intermediaries or agencies, and provide a platform to link customers and service providers for a fee. By contrast, other companies in the digital economy may offer much better job quality. Google, for example, ranks consistently as one of the best workplaces in the world by the Great Place to Work Institute. Most likely, Google and Uber represent two extreme examples along a continuum of emerging models of working in the new digitalised economy.

In other words, digitalisation is a far more complex and multi-dimensional phenomenon that transcends the ‘platform economy’. Digitalisation disrupts work organisation in the manufacturing sector and even in industries that have been traditionally more reliant on human labour such as the garment industry. Emerging technologies, such as the Internet of Things, 3D printing and artificial intelligence reshape manufacturing processes and shift the emphasis from global value chains to redistributed and localised production with high value customised products. Localised production may drastically simplify complex supply chains and in the future more factories may operate by relying entirely on automated systems.

Digital disruption is likely to influence occupations in the services sectors, which were thought to be immune to automation. Apart from creating new markets, digitalisation may have more subtle effects, transforming work processes and practices for employees in service occupations such as in banking. The dangers associated with skills are the most straightforward. The pace of changing technology may require new e-skills, leading to skill shortages and mismatches.

In sum, despite the promise of digitalisation as a ‘blessing’ that drives productivity and enhances consumer choice, risks are identified in four areas: (i) work autonomy; (ii) wages; (iii) power; and (iv) skills. Digitalisation may lead to more meaningful careers, because robots or algorithms would take over some of the more mundane tasks in our jobs. But equally plausible is the scenario that digitalisation will fragment work so much, that career patterns may end up being so erratic that more people will be competing for fewer job-tasks. These challenges will likely revitalise the role of employment regulation by professionals’ associations and trade unions, which may potentially shape a ‘just transition’ to the new ‘digitalised’ labour market.

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