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Know Davos White Paper on Shifting Labour Demands

Davos (ABC Live): Shifting Labour Demands : A combination of powerful forces – both technological and macro trends – are altering where and how goods are made and shifting labour demand.

Jobs will be displaced by automation across global production value chains, but there will also be pockets of job creation within the wider manufacturing ecosystem. However, widespread mismatches are likely between where new jobs are and where there are workers with the required skills, which creates a new employment challenge that could be particularly difficult for developing economies.

Production industries play a significant role in economies around the world. They are engines of growth and large employers. They contribute far more to research and development (R&D) than other industries. For these reasons, the performance of production industries is often regarded as an important indicator of an economy’s strength.

In recent decades, jobs in production industries have brought millions of workers in developing economies out of poverty and helped citizens in advanced economies move up to the middle class. The geography of production remains high on the agenda of policymakers, who continue to view production industries as an enabler of social progress as well as an essential component of economic growth.

Today, production industries are undergoing massive change, which could potentially slow or even stop the progress made in recent decades. The Fourth Industrial Revolution is altering global production value chains. Value chains are becoming simpler. Sources of value are shifting, both across the value chain and geographies.

Companies are increasingly generating value outside the core manufacturing and distribution segments, for example in preproduction phases such as R&D, product development and after-sale services. In addition, macro trends, such as concentration of demand and rising protectionism, are influencing where products are designed and built.

These trends are leading to a shift in the geographical distribution of production jobs. In this research, a model was built on macroeconomic data to create a set of scenarios for the purpose of identifying which regions and types of workers within the production ecosystem are most vulnerable to job disruption and displacement.

Through this modelling, it is possible identify the places where workers are most in need of retraining to fit production industry demand. The findings reflect the impact of shifts in global value chains for five production industries – automotive, textile and apparel, chemicals, consumer electronics and industrial equipment.

The bottom line: We expect that employment losses in production industries will continue as companies automate work, but net losses will be smaller than some studies have predicted.

The International Labour Organization (ILO), for example, has recently estimated that 61.6% of manufacturing jobs in the Association of Southeast Asian Nations region alone could be at risk. According to scenario modelling, even as automation proceeds, demand for labour will increase in some parts of the supply chain and in some locations. An estimated 16% of jobs are susceptible to displacement in the five production industries analysed, after accounting for potential job gains that would arise from the same trends.

Source : Davos White Paper on Shifting Labour Demands

About Andrew

Mr. Robert Andrew is Geneva based Research Journalist reports for ABC Live on super specialized subjects from all around the Europe.

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