Impact of Digitalization on the Labour Market

The First Digital Revolution began in the 1940s, when the world initially saw a shift from analogue technologies of the Industrial Revolution towards digital electronics. In less than a century, with exponential advancement in computer and communication technologies and the invention and proliferation of the Internet, humans have lived through three more Digital Revolutions that saw the invention of home computers, the World Wide Web, and, more currently, forays into the digital space. 

Alongside this technological growth, societies have adapted in a plethora of ways, from changes in socio-economic infrastructures to the establishment of new policies. Indeed, whether it’s fire in the days of Homo erectus, the wheel in the 4th Millennium BC, or the factory system of manufacturing in the 18th Century, humans (and early human species) have continuously demonstrated the ability to change with the times.

Within the last decade, the rise in artificial intelligence, virtual reality technologies, and advanced robotics, among other digital innovations, have ushered in what experts are calling the Fourth Digital Revolution. As such, now is an integral time in which we must, yet again, adapt, especially when it comes to the labour market.

How the Digital Is Changing the Work Force

It’s no secret that with the advancement in technology comes the elimination of certain jobs. From switchboard operators to factory and warehouse workers to retail cashiers to even travel agents, computer technology—or, more correctly, automation—has effectively replaced human workers across a multitude of industries. A means of increasing efficiency and productivity, computers have helped improve company performance, essentially allowing them to re-focus human labour towards more valuable tasks.

At the same time that some jobs are lost, however, there has been the creation of new ones, like computer specialists and programmers, social media managers, developers, and content creators. In fact, for every job lost to technology, there seem to be two more created by it. As ubiquitous as digital technology and media are—and will only continue to be—one of the biggest issues humans faces now is adapting to its impact on the labour market.

How the Labour Market Needs to Change with the Digital Age

With the creation of new jobs within the digital space, there are naturally new sets of skills required to perform them. In fact, in the digital industry, there are five key skills that companies now look for: data analysis, cybersecurity, programming, automation, and digital business and sales skills. What this essentially means is that, as the world shifts towards a more digitally oriented labour market, there is a definitive revision of core skills needed to not only enter the workforce, but to maintain one’s position within it as well. The precarious part, here, is that this shift affects everyone differently.

For older employees—or for those already in the work force—learning the core skills needed for an increasingly digital labour market becomes a matter of re-education. More importantly, re-skilling should also take into consideration the strategy of up-skilling so that any employee’s entire career span sees continual opportunities for growth and promotion. Likewise, for younger employees—or those who have yet to enter the work force—educational programs will need to now include training to better equip them for the digital world.

Wherever one falls on this spectrum, what’s ultimately paramount is an investment from policymakers, governments, educational institutions, and even companies to support individuals across skill development and, in many cases, career transitions.

A Human-Centric Plan into an Unknown Digital World

For better and worse, the COVID-19 pandemic has irrevocably changed many people’s relationships to their careers. When combined with other factors like record-high inflation, insurmountable student debt, a steep housing market, socio-economic inequities, and a disproportionate living wage compared to the actual cost of living, vast populations of workers—particularly the younger ones—are reshaping the way they think about and mobilize their careers.

Foremost, the last few, pandemic-laden years have, literally and figuratively, isolated many people from the lives they were living before. Whether it’s being laid off from careers they poured countless hours into, and thus being coerced into starting anew, or discovering better work/life balance, the “hustle,” as they say, has morphed from solely company-focused goals to include more personal ones. This isn’t to say employee loyalty is in decline, but rather workers are looking for a more holistic experience in their nine-to-five. 

And that’s if they even have a nine-to-five at all. Indeed, as global industries progress in their digitalization, there has been a significant move towards more service-oriented and contract-based (and therefore less permanent) work. This flexibility has allowed workers to achieve a better work/life balance, but, in many cases, has effectively precluded them from reaping the typical benefits of full-time employment. 

Gone are the days when Henry Ford’s 40-hour work week was the gold standard for companies and their employees. Now, folks want to be able to not only believe in the work they do, and that they’re making a difference—that they matter and are essential—but they also want to be able to be present for themselves and their loved ones when they’re off the clock.

When you consider that automation has replaced human labourers in many industries across the globe, it’s more important than ever that companies implement a human-focused plan as they forge through an increasingly digital world. The last thing an employee wants is to feel disposable, so the last thing a company should want is to lose their employees’ faith and dedication. 

Humans, after all, are the ones who ushered in this new era. Critical thinkers, hard-working creatives, ingenious problem-solvers—all humans who strived to engineer the computers and programs that have benefited the companies who now use them. It goes without saying, then, that humans must be at the forefront of this change, but they can only do that if they are supported—more correctly, empowered—by the companies and leaders in charge.

Jericho Tadeo |  Contributing Writer



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