In the 6th century B.C., the Greek philosopher Heraclitus famously said: “Everything flows, nothing stays the same”. It is one of the earliest recognitions that constant change is an essential part of the human experience. However, change is something that many human beings tend to fear. Political dynamics are often driven by these feelings.
I have had the privilege of living my entire professional life at the forefront of technological innovation and I remain convinced that technology can be a powerful driver of human progress. Productivity growth in Europe has been anaemic for some time. A broader and smarter use of digital technologies could very well help address this. Nonetheless, I also have to agree that the digital transformation has created serious issues and challenges that need to be addressed - the question is, how?
For some time now we have all been talking about the “future of work” – even though that “future” is happening right now. For so long now the debate about the role of technology in the workplace has revolved around one thing: how many jobs will be destroyed compared to how many created?
Early predictions of massive job destruction caused by technologies such as AI and automation - more than 50% of the US labour market was predicted to be at risk at one point - thankfully turned out to be overly pessimistic, based on faulty assumptions or quite simply misinterpreted. In fact, historically, the aggregate impact of technological change on the quantity of jobs is at worst neutral, and can often be positive - although this is undoubtedly of scant comfort to the families of those people whose jobs have been lost as a result of new technologies.
In most cases, though, it is in the nature and not the number of the jobs that technology has had the greatest impact. This is a process that is only likely to accelerate in line with the pace of technological development. But it is also a process that we know how to handle. After all, this is not the first massive structural change, in large part driven by technology, that our societies have been through. Large-scale changes such as the first and second industrial revolutions, or the more low-key ‘revolutions’ such as the changes to our office spaces brought by word processors, e-mail, video-conferencing systems and the like, have all influenced in their own way the world of work.
Managing change in the workplace
Of course, the jury is still out on whether the widespread use of emails has been a boon or a bane for our professional and personal lives, but at least its arrival means we no longer have to employ people simply to wheel documents around on carts. That, like many other tasks, simply became redundant and disappeared as a result of technological change. Jobs did not disappear, they changed - and the job holders had to change with them.
Putting it this way makes it all sound simple but the reality is rather more complex, and not simply because most people do not like change. In the past, when you made changes to your work it generally meant completing a task in a different way, using new tools or changing a schedule. The world of work today is far different, with almost constant change and the need to adapt to the unexpected. Even in very traditional workplaces, such as car manufacturing, where work involves a series of discrete tasks carried out in a strict order, we see growing pressure on workers to integrate creativity, problem-solving, lateral thinking and group cooperation into their core tasks, whether they work on the on the assembly line, software development, marketing, or customer support.
This structural shift in the nature of jobs requires a corresponding change in our approach to education and training. This means rethinking what and how, when and where we learn. Around 90% of today’s jobs require at least basic digital skills, and as the world becomes increasingly digital, almost everybody needs a basic understanding in order to navigate their way through life. Yet around 40% of European citizens, and a third of the EU labour force, lack these essential skills.
The rapid pace of digitisation in our society is also increasing demand for advanced digital skills. Yet here again there is a real skills gap: although the number of ICT specialists working in Europe has grown significantly over the last 5 years (by more than 2 million), many more are still needed: 53% of companies looking to take on new ICT staff struggled to do so in 2018.
But improving people’s digital skills are only part of the solution. As the world of work becomes increasingly digital, we will need to focus increasingly on what truly distinguishes human beings from machines: creativity, empathy, the ability to cooperate and take decisions in complex environments. These so-called soft skills, which are fiendishly difficult to acquire unless you start from a very early age, effectively constitute the added-value of humans, essential insurance for workers at risk of being ‘phased out’ by digital technologies.
So much for the what - but how do we change the how, where and when we learn?
Our education systems were basically designed at a time when the structure of labour markets, and the needs of key industries, were reasonably clear and stable. The transition from school to work was mostly a one-time event and careers tended to be longer.
This is not the case today and is likely to be even less so in the future.
We must make sure that people have the flexibility to choose a combination of skills and competences that match the complexity of today’s - and tomorrow’s - job market. We need to support continuous, life-long learning and development. This requires both financial support for current and future workers, but also good and accessible services (public, private or a combination) to provide steering and guidance to choose the best learning pathways throughout an individual’s life and career.
New ways of working
In the past decade or so we have seen a significant increase in so-called non-standard forms of work, a broad category that includes different contractual arrangements such as part-time and on-call work, zero hours contracts, temporary agency work, and others. You might argue that such forms of work are not truly new, not least since in most developing and emerging countries informal labour relations actually dominate labour markets, but in Europe at least it is clear that we are seeing a shift away from the industrial structures and labour relations that characterised the post-war years, characterised by the so-called ‘job for life’.
This shift has multiple causes, of which the digitalisation of production processes is certainly one. From a purely economic point of view it is arguably a logical response to increasing demand for more complex products and services, more distributed value chains and faster feedback from private markets.
From the political and societal points of view, though, things are not that simple.
Some see these changes as a welcome move towards more flexible labour markets, with positive impacts on productivity and competitiveness that Europe badly needs. Others characterise these non-standard forms of work as a return to the precarious working conditions that the labour movement fought against throughout the 19th and 20th centuries.
Working in the platform economy
Regardless of the truth of these differing points of view, the so-called platform economy is here to stay, for the foreseeable future anyway.
While it remains only a relatively minor part of the labour market at the moment - studies suggest that the percentage of workers in Europe using online labour platforms as their only or main source of income is not more than 4-5% of the total working population - the platform economy has grown steadily over the past five years. So this is clearly a phenomenon that deserves attention, even if other forms of work, including the more standard contractual relationships, are not under any immediate threat of disappearing.
Much like the broader debate on non-standard forms of work that I mentioned before, there are different perspectives on the positive and negative implications of platform work.
Let us leave aside for a moment the purely legal question of whether and in what circumstances online platforms should be considered as employers. A number of courts, in Europe, in the US and elsewhere, have been looking at this question. The jurisprudential results so far can be fairly described as: “it’s complicated.”
There is however a case to be made for a more active involvement of online labour platforms in the well-being, professional development and training of the people using them to provide their labour. Corporate Social Responsibility and self-regulation can be a good way to start experimenting with approaches to platform work that are socially more sustainable.
But we must be careful not to let our prejudices against online platforms operating in this legal grey area get the better of us. Platform work is a way to address the very real needs for flexibility on both sides of labour transactions. Not every business out there can afford to hire a full-time, permanent worker for every task it needs to fulfil. Platforms can also provide opportunities for people who are excluded from labour markets, because full-time work relations are just not the right fit for them – for example students, parents, migrants, young people with less experience, and so on.
I think we should not exaggerate the enthusiasm of people to be their own bosses, but we should not demonise flexible work relations, either, especially when they can be an effective gateway to better jobs.
We need to accept that platform work is here to stay and put the right legal framework in place to make sure that workers taking advantage of its flexibility are not in turn taken advantage of by operators exploiting loopholes in labour laws from another era. Platform work is complex, with many different types of online labour platforms, each with their own specific business models, worker profiles, and need for public policy intervention (or not). We should not be scared by this complexity but rather tackle it head on.
The European Foundation for the Improvement of Living and Working Conditions (EUROFOUND) has already done just that. It has proposed a number of categories of online labour platforms based on a matrix of different factors:
- the skill level required to perform the task: low, medium or high
- the format of service provision: on-location (delivered in person) or online
- the scale of the tasks: micro tasks versus larger projects
- the selector: tasks assigned based on a decision by the platform, client or worker
- the form of matching worker and client: a task offer or a contest
The challenges, opportunities and possible need for public policy intervention in the case of an online labour platform that focuses on low-skilled, on-location, task-based labour (for example, a platform that coordinates private vehicles for mostly urban transportation) are arguably different than the ones for a platform that focuses on high-skilled, online, large projects (for example, a platform that caters mostly to graphic designers or software developers).
But at the same time, I think that there are a number of common questions that require answers.
First: what are the responsibilities of online labour platforms? Should they be responsible for supporting worker training, upskilling and life-long learning and development as other employers?
Second: what about decent working and living conditions, notably enforcing rules on working hours, health and safety, unemployment insurance enjoyed by workers at large?.
To be clear I am not arguing that online labour platforms should turn into national welfare agencies. However, the notion that everyone has a responsibility to contribute to the common ‘social contract’ has been for a long time part of the European social model. Simply saying that because you are an intermediary you are exempt from such responsibilities will not cut it – as temporary work agencies have learned, sometimes painfully, in the past.
Third, and closely related to the second question: the increasing shift to non-standard forms of work is putting pressure on the financing of social protection systems, including pension and health funds. This financing has historically been based to a significant extent on contributions from traditional employer-employee relationships. It is also often not entirely clear to what extent non-standard workers have legal and practical access to social security entitlements, for example health and unemployment support.
An EU Recommendation on Access to Social Protection for Workers and the Self-Employed, which has already been politically agreed and will soon be formally adopted by all Member States, will need the input and concrete expertise of practitioners in order to be useful for our citizens. In short, online labour platforms should be fully part of this conversation. An issue that comes to mind is the simplification of social entitlements that are currently very fragmented across different types of workers – sometimes with no obvious logical or functional reason.
Fourth and final point concerning platform work: the role of data, and what that means in terms of relations and responsibilities for all the actors in the triangular relationship among platforms, the providers and the requestors of labour.
One of the reasons why many online labour platforms have been so successful is because of their ability to collect vast amounts of data, sometimes of a personal nature; and to process and analyse this data using different techniques, for different purposes. This is not an issue per se. The European Commission has always been very clear that using artificial intelligence and other technological innovations in order to extract added value from data should be fully supported. But it is equally clear that this has to happen within the clear legal framework provided, among others, by the General Data Protection Regulation, and also in a socially sustainable and ethically respectful manner.
I recognise that it is not always easy to translate these aspirations into concrete operational decisions, but we are not working in a vacuum here. The UN Sustainable Development Goals include clear metrics and guidance for its social and economic dimensions. The Ethics Guidelines for Trustworthy Artificial Intelligence provide a blueprint that many online labour platforms should look at very carefully.
The bottom line is if the main driver of the success of online labour platforms lies in the smart use of data (including worker data) then the same platforms have a responsibility to clarify how they apply principles such as transparency, accountability, non-discrimination and others, in their own internal data processing.
It is understandable that many online labour platforms are not particularly keen to share the details of their data processing with third parties. However, there is a public interest argument to be made that a better and more coherent picture of what is going on with platform work will help us to design and implement better policies – and that is in the interest of everyone, online platforms included.
This is particularly important because it is far from clear to what extent EU cross-border labour is being used as opposed to relying on workers from other countries, for example from Africa or Asia.
It is also important to understand to what extent online labour platforms are being used by companies to outsource activities such as online content moderation or the training of AI learning systems, for example for voice and image recognition. The risk here is that we create a race to the bottom in terms of wages and working conditions, potentially violating EU and Member States’ labour and other laws.
So I would also encourage you to think about ways in which more and better data could be shared, in ways that preserve privacy and business interests, and allow us to better understand the real dynamics at play.
The new European Labour Authority, which just started its mission (16 October 2019) to provide workers and employers with better access to information on their rights and obligations and will support national labour authorities in their cross-border activities, is certainly a key EU stakeholder for this.
The EU has shown regulatory restraint in these matters, notwithstanding pressure from many directions. For example, the Platform-to-Business Regulation is widely praised as an example of a light-touch approach in terms of transparency and predictability obligations for online platforms. Likewise, our strategy on the Cooperative Economy clearly refrained from introducing specific regulatory obligations in very innovative and dynamic sectors.
More regulation likely in the future?
But this restraint should not be taken for granted - and this leads me to my conclusion: what is the EU doing, and what is it planning to do?
Let me stress first of all that we are not starting from scratch.
We have already launched a number of policy and regulatory strategies over the last five years, including:
- the Digital Single Market strategy to boost investments and innovation in the digital economy, across the EU;
- the European Pillar of Social Rights to work together towards decent working conditions, social protection and equal opportunities for all;
- the New Skills Agenda for Europe, to boost skills to support employability and competitiveness, improve skills intelligence, facilitate smoother labour market transitions and reskilling, and promote more and better vocational education and training, including for what concerns digital skills.
- the Coordinated Action Plan on Artificial Intelligence to support investments in AI, coupled with ethical guidance developed by the independent High-Level Group on Artificial Intelligence.
- the EU Digital Skills and Jobs Coalition, and the national coalitions, to bring together all stakeholders in support of better and more coherent education, training, up- and re-skilling policies for the digital age.
The Commission has also supported a wide-ranging independent report by the High-Level Expert Group on the Impact of the Digital Transformation on EU Labour Markets. This report, published in April 2019, includes a number of recommendations to the Commission and other stakeholders, including online platforms, that are well worth remembering:
- Enabling digital skills personal learning accounts;
- Scaling up career counselling and creating innovative learning environments;
- Supporting labour market intermediaries to reduce structural skill gaps;
- Preventing occupational safety and health risks like mental health and stress related issues resulting from digitalisation and increased volatility in today's world of work;
- Reinvigorating and innovating the social dialogue using digital tools;
- Creating a system for automated digital reporting for labour contributions and taxes.
The Commission also intends to make significant investments to support universities and higher education institutions, in order to develop dynamic digital ecosystems where academic excellence, research and innovative industries attract and retain the best talents. Our education and training systems do not produce enough graduates with advanced digital skills. As EU graduates often pursue their careers in other regions, policy-makers are worried the EU is becoming the incubator of US or Chinese tech behemoths.
And on the subject of investment, let me close with a clear message.
Our ambitions must be matched by resources. And if we truly want the European economy to be innovative, sustainable, competitive and fair, we need to put in place the necessary financial resources at both EU and national levels to do so.
In the context of the next EU multi-annual budget, the Commission has proposed the creation of the Digital Europe programme (of €9.2 billion) to allow co-investment in state-of-the-art capacities to reinforce Europe's capacities in key digital technology areas and widen their diffusion and uptake in areas of public interest and the private sector.
Its goal is to provide support in five key areas that are essential for the future competitiveness of Europe, namely (i) high performance computing, (ii) artificial intelligence, (iii) cybersecurity and trust, (iv) advanced digital skills and (v) deployment and best use of digital capacity and interoperability.
The programme will also provide funding of €700 million for advanced digital skills (AI, cybersecurity and high power computing, etc.). Interventions will finance university level courses, specialised training courses for workers in areas such as artificial intelligence, cybersecurity and high performance computing. Complementary proposals have been made to also finance less specialised digital skills under the Erasmus+, Horizon Europe and the European Social Fund.
I believe that these investments are essential for online labour platforms, too; and that the sector can only benefit from a skilled workforce that is better equipped to handle the increasingly complex and ever-changing requests for labour services.