Blog: Towards a just transition for inclusive digitalisation

Photograph: ICT Authority/Flickr licensed under CC BY 2.0.

Mar 2017
22/03/2017

The Digital Development Summit 2017 took place on 13th March 2017. In this, blog Anna Bykhovskaya shares key learnings from the Trade Union Advisory Committee to the OECD. 

The ‘Future of Work’ historically is tied to technological change and nowadays particularly to digitalisation. Only a few years ago, the links between jobs and ‘artificial intelligence, the Internet of Things, or Uberisation’ were not part of a mediatised policy discourse as they are today.

New technologies offer the prospect to improve productivity and the quality of work. For example, technology could be used to ensure ethical global supply chains through data monitoring. If combined with good management practices digital tools have the potential to enhance the quality of life of workers in all sectors. But there is concern that some business models are assigning little priority to workers’ rights or social protections. Policymakers and all stakeholders need to ensure that digitalisation leads to overall better living conditions and more equal societies. Disruption is avoidable. We should aim for an inclusive technological diffusion instead.

In February 2017, the Trade Union Advisory Committee to the OECD (TUAC) held a Trade Union Forum on Digitalisation and the digital economy and released a set of key recommendations. One of the main conclusions was that to make digitalisation inclusive, a policy and regulatory mix is needed.

The scale of change

Predictions on job losses linked to digitalisation vary widely and often are alarmist. A more nuanced assessment is needed before jumping the gun. First, distinction between technologies and the combination thereof, their state of development and adaptation needs to be made before looking into their varied impact on job tasks (not entire occupations), skills needs, and different sectors.

A more positive outlook points to job fields with strong growth potential (also prompted by the introduction of technologies). This applies to tasks requiring ‘complex reasoning or socio-emotional skills, tacit knowledge, and judgment’ (as described in the 2016 World Development Report). There will be so-called ‘complementary jobs’ to new high-tech jobs. New roles will emerge in the transition to a low carbon economy (recycling, re-manufacturing), and will be created in the service and the care sector.

Besides, some scenarios set the role of organisational design aside that would paint a more realistic picture since:

  • Any digitalisation process can be used to make workers more efficient and their working conditions better without replacing them; and
  • Technology can enhance a firm’s productivity (and service delivery), while maintaining or even increasing its workforce.

The real emerging challenge might be that job creation will be polarising, with more jobs in basic data filtering or in semi-precarious platform jobs. 

The social costs of digital divides

Clearly, there are digital divides within countries (regions) and across countries (state of development, sector coverage, levels and quality of employment and competencies). According to a recent McKinsey Institute report, four countries (China, India, Japan and the US) make up for two-thirds of the workers whose tasks could be automated. Developing countries and emerging economies face the introduction of entirely different technologies as some do not have sufficient broadband access. Although some leapfrogging occurs by adapting new technologies faster than the overall adaptation level would suggest, they overall lag behind in the capacity to use new technologies, such as 3D printing, to create new products or to facilitate work tasks. This bears the danger of re-shoring with simultaneous outsourcing of low-skill, low-paid tasks.

Delayed or uneven adaptation not only leaves sectors behind but entire social groups (rural populations, young people, etc.). Over half of the world’s population is still offline, according to the ITU, and the gender divide is not getting smaller. The affordability of internet services might increase inequalities further. Missing out on the opportunities of connectivity (access to information, finance, online work) will only increase income and skills gaps – and not fulfil developmental targets.

Digitalising non-standard work

And then, there is Uberisation. The debate about regulatory arbitrage by online platforms and the creation of a new precariat in industrialised countries is well-documented. Several class actions, led by trade unions, against the misqualification of workers as self-employed contractors are ongoing. A high-profile example is the case the UK GMB trade union has taken against Uber. Italian trade unions are trying to unionise Deliveroo drivers and the German sector union IG Metall created an information platform for crowd-workers. Other trade unions are opening to ‘self-employed’ platform workers.

In developing countries, the situation is a bit more complex. While there are protests (most recently in Kenya) and rulings to grant employee status (see the case of Uber in Brazil for example), many observers make the point that the platform economy might be a chance for people to get out of informality and/or to access jobs remotely. While this is a valid point, some online platforms are still setting a precedent for regulatory arbitrage, unequal risk-sharing and wage dumping (spurred by a global competition for tasks). They do not lift up working conditions and do not necessarily create skills for longer-term employability.

Already, some Asian countries are hubs for outsourcing of IT services and data processing. The latest ILO report on non-standard work shows that it is growing. In Mali and Zimbabwe, one in three jobs is considered casual. Non-standard work makes up for nearly two-thirds of employment in Bangladesh and India. Trade unions in India (the women’s committee of the INTUC or SEWA that organises female workers) are trying to fight against outsourcing that leads to non-decent work.

A just transition towards digitalised societies

What is needed is a constructive multi-stakeholder dialogue on the direction and terms of technological change and a commitment by corporate actors to responsible business conduct. It is crucial to look beyond technological spread and at the more important socio-economic factors (infrastructure coverage, social protection, levels of inequalities etc.). For a Future of Work that is characterised by quality jobs and decent incomes, it is key to close investment and regulatory gaps and to apply international labour standards now.

Change if it leads to inclusive societies is a good thing. Technology and automation have consistently transformed the way work gets done. So, technology itself is not a problem. However, the terms for a digital diffusion need to be debated, set and managed. Risks need to be mediated to avoid a polarisation scenario.

A just transition applied to technological change needs to be at the centre of policy packages. The Just Transition framework is a package of policy proposals which addresses the different aspects related to the vulnerability of workers and their communities. While the framework was initially devised by trade unions in the context of climate change (and is now included in the COP21 commitment), its key principles are valid and relevant to address technological change and the digitalisation of the economy.

Key principles of a Just Transition include:

  • Research and early assessment of social and employment impacts
  • Social dialogue and democratic consultation of social partners and stakeholders
  • Active labour market policies and regulation, including training and skills development
  • Social protection, including securing of pensions
  • Community renewal and economic diversification plans
  • Sound investments leading to high quality, decent jobs

Trade Union involvement in digitalisation processes reflects the long tradition of accompanying working people in past industrial revolutions so as to ensure the alignment of technological change and social progress. Workers need to be involved in policy and business discussions so that their interests are fully taken into account through collective bargaining and social dialogue.

What happens if they are not is perfectly illustrated by Foxconn. It had almost 1.3million workers in 2013-14, but in 2016 their number was reduced to 1.06 million despite profit gains. This is thanks to the unilateral introduction of the ‘Foxbot’costing around 25.000 US$ and capable of replacing four  workers.

If Sustainable Development Goal 8 on decent work were to be fulfilled, workers whose occupational tasks are indeed subject to full or partial automation need to be re-trained and re-employed within the same company or elsewhere. Trade unions – if labour rights and freedom of association are respected – can give them voice and agency. Institutionalised social dialogue results in fewer fears about displacement as a just transition approach can be worked out jointly in an anticipatory manner. Robots are not the cause of growing wage inequality, unemployment and underdevelopment – lack of policy action, regulation and consultation are.

Read related blogs:

 Visit our resource page to watch videos from the event, refer to the key papers, or view the highlights as a Storify: Lessons from the Digital Development Summit 2017.  

References: 

This post was originally published by the Institute of Development Studies on 9th March 2017. 

The Impact Initiative blog posts are either from individual researchers or from major research programmes. Some of the blog posts are original source and are written by researchers and experts connected to the two research programmes jointly funded by ESRC and DFID: the Joint Fund for Poverty Alleviation Research and the Raising Learning Outcomes in Education Systems Research Programme. Other blog posts are imported from related websites and programmes. 

The views expressed in these blogs reflect the opinions of each individual and may not represent the Institute of Development Studies, the University of Cambridge, ESRC or DFID.

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