Research summary on the impact of digitalization on the labor market

- Productivity growth was very weak in the wake of the financial crisis and economies, particularly in southern and continental Europe, have not yet recovered properly. Even though we in Sweden have had a boom and productivity has started to increase somewhat, we are far from what it looked like before the financial crisis," says Eva Uddén Sonnegård.

Several economists argue that we will not return to the high productivity growth of the past and that it was not a normal state, while others argue that we are currently in a transition phase where firms on the technological front are growing fast while others are lagging behind. Eva Uddén Sonnegård sees great potential for improvement that can be accelerated by economic policy:

- Less of a regulatory burden and more flexible labor laws are cited as examples by several economists.

Were there any conclusions in your research summary that surprised you?

- I was somewhat surprised that digitalization in the future will not affect Sweden as much as, for example, Germany. Based on the analysis in the OECD Adult Study, it is estimated that around 8% of jobs will disappear while around 25% will change content. This could either be because the pressure to transform is low in Sweden - in which case there are no positive productivity gains - or because we have been so early with automation, robotization and digitization compared to other European countries that there are not many gains to be made.

Currently, the labor market is characterized by the current pandemic. How did you think about it in your compilation?

- The studies on which I based the report came before the pandemic, so it is natural that the questions would look a little different today. But at the same time, it will be a while before we see the end of the pandemic and the transformation that is taking place in society. I believe that digitalization will take off - and has already done so to some extent - in all areas, not just in the most knowledge-intensive workplaces where people are open to new technologies. This could have influenced the results of the surveys I used in this report.

You have highlighted the importance of ensuring that even low-paid and fixed-term workers have the opportunity to develop their skills. Why is this important?

- A common suggestion to increase productivity is that the skills of the workforce need to be upgraded and focused on digital skills. An OECD survey of skills development in business-related skills shows that it is precisely the low-skilled who do not acquire business-specific training. Moreover, they often work in temporary jobs, which do not have the same opportunities for skills development as permanent employees. The agreement reached by the Confederation of Swedish Enterprise, PTK, Kommunal and Metall will be central and important for increasing digitalization skills.

What do you think of the IT&Telecom companies' proposal on tech checks?

- This is an example of a well thought-out proposal that the Government Offices can take on for implementation. It is important that everyone can benefit from the advantages of digitalization and that both those who do not have a job and those who have a job can take the initiative for guidance and skills development themselves thanks to the financial support. It is important that the intervention is temporary and that the actors providing the training are approved in accordance with the proposal. It is proposed that the Swedish Agency for Economic and Regional Growth and the Swedish Agency for Higher Vocational Education do the follow-up. It will be a delicate task for the authorities to ensure that the support is given to the intended skills development. Not least the Swedish Agency for Economic and Regional Growth has, in connection with the corona crisis, gained important experience in order to be able to evaluate the seriousness and effectiveness of applications for state aid of various kinds. The fact that employers also receive support in the form of skills deductions makes it possible for small businesses to invest in skills development. Legislation may need to be reviewed to ensure that fixed-term employees also have access to skills development during working hours.

What are the most positive effects of digitalization according to the report?

- The most positive thing about digitization is that it affects people's well-being; it is much easier to perform many tasks using computers and routine tasks are performed by computers instead. Especially now during the corona pandemic, there are reports of how many people find it easier to get the so-called family puzzle together when the opportunity to work from home is great. But the measure of welfare that we usually use (GDP per capita) may not capture the importance of digitization. It can be difficult to measure the contribution to output.

And what can be done about the most negative ones?

- Invest in education, education, education! Universities need to participate in adult education and offer more flexible conditions; it should be possible to follow most of the course offerings online and courses should be tailored to different groups of adult learners. In this respect, I believe that the coronavirus pandemic has contributed very positively to universities changing their ways of working. Another advantage but also a disadvantage of digitization is the possibility of gig-jobs; the freedom is great for the contractor while the client is anonymous and does not feel any responsibility for the working conditions. Nor does the person who mediates the assignment consider himself an employer in the regular labor market. Some regulation may be needed here, but a balance is needed so that gig jobs do not disappear. For many, such jobs can be a first job in the Swedish labor market.