The nature of work is changing as a result of technological progress. Tasks traditionally performed by humans are increasingly performed using robots and artificial intelligence, and the declining cost of machines threatens low-skill, routine jobs — occupations most susceptible to automation and offshoring.
But at the same time, technology brings opportunity, paving the way to create new jobs, increase productivity, and deliver effective public services. In our recent Jobs solution note, “Adapting Jobs Policies and Programs in the Face of Accelerated Technological Change,” we examine how practitioners and policymakers can harness the benefits of technological change. We also highlight a series of facts from the WDR 2019 on The Changing Nature of Work regarding the recent evolution of global labor markets, including: the rapid reshaping of skills demand (increasing premia for higher-order cognitive and socio-emotional skills and adaptability); the disruption of production processes and industrial organization due to digitalization (changing technologies and firm boundaries); changes in employment relationships (including the emergence of the “gig economy”); and the persistence of stubbornly high informality in most developing countries settings (which has remained unchanged, despite the scale of other shifts), leaving most workers in relatively low productivity jobs and uncovered by social protection systems.
The COVID-19 outbreak has amplified the adoption of digital technologies, reinforcing many pre-existing labor market trends and increasing the urgency of the corresponding policy responses.
Below, we lay out some of the strategies to adapt to a rapidly changing world of work.
Increase access to digital technology
Access to technology in developing countries still lags. Although studies show that automation technologies have contributed to higher productivity and larger scale production, this is often limited to cities. Rural and remote communities — where four-fifths of the poor live —are drastically underserved in even basic internet and mobile phone access. Governments should make access to internet affordable while also exploring regulations to help address challenges posed by digital platforms.
Invest in lifelong learning
Governments should invest in all stages of the human development cycle — early childhood, tertiary education, and adult learning. Technological advancements are demanding rapid uptake of new skills. Across the world, employers are increasingly looking for workers with advanced cognitive and socio-emotional skills. Meanwhile, demand for narrow job-specific skills wanes.
Strong skill-foundations are important for developing in-demand skills and adaptability. However, schools in many low and middle-income countries are failing to teach foundational skills. Important skills readjustments happen increasingly outside compulsory education and formal jobs through early childhood, tertiary education, on-the-job learning, and adult learning outside the workplace. Policymakers and practitioners should champion policies and programs that emphasize the importance of lifelong learning.
Strengthen social protection
The changing nature of work and uncertain labor markets call for strengthened social protection.
Three main components of social protection systems can help manage labor market challenges: (a) a guaranteed social minimum, with social assistance at its core, (b) social insurance, and (c) more balanced labor market regulation.
Most social protection systems in rich countries are based on mandatory contributions and payroll (labor) taxes on formal wages. The changing nature of work, including diverse and fluid forms of employment—that is, the “gig” economy and part-time work—challenges this model. While these arrangements have served many countries well, the model remains mostly aspirational in developing countries due to persistently high informality. As a result, in the poorest quintile of countries, only 18 percent of people are covered by social assistance and two percent by social insurance. Given the endemic nature of informality, which accounts for around 80 percent of work in developing countries, most people would be better off with a social protection system that does not depend on formal employment.
Bridge gender gaps
Governments should level the playing field by providing women with better access to technology, skill acquisition, and financing. Legal frameworks and informal institutions such as social norms shape whether women transition to high-skilled jobs that complement automated systems. Recent evidence has shown that removing legal barriers faced by women can help them access high paying jobs and managerial positions.
Technology can be leveraged to close gender gaps too. Virtual learning provides opportunities for women to acquire skills. Online jobs can help women to overcome mobility restrictions, especially in countries where such constraints are pronounced.
This blog is based on the Adapting Jobs Policies and Programs in the Face of Accelerated Technological Change Solutions Note, published in April 2020. This is the fourth post in a blog series based on research and evidence from the World Bank Jobs Group’s Solutions Notes. The Solutions Notes synthesize findings from the Jobs Umbrella Multidonor Trust Fund (MDTF)-funded activities and other sources based on research, evaluations, pilots, and operations. Each Note succinctly analyzes efforts and challenges, and provides an evaluation of what has worked, and what does not.
The first three posts in the series include:
• Promoting a Gender-Inclusive Labor Force Blog 1: Five ways to make skills training work for women
• Promoting a Gender-Inclusive Labor Force Blog 2: Five strategies to address employment hurdles faced by young Syrian women refugees
• Promoting a Gender-Inclusive Labor Force Blog 3: Six strategies to increase young women’s access to digital jobs
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