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What are the challenges for business, governments and society?

From legal risk to the redesign of taxation systems, the rise of technology has far-reaching consequences for different stakeholder groups.

Business

Business

Corporate training budgets have been stagnant in recent times; yet according to a recent McKinsey survey, 66 per cent of executives see ‘addressing potential skills gaps related to automation/digitization’ within their workforces as at least a ‘top-10 priority’.

In another study by PwC, 38 per cent of CEOs expressed their ‘extreme concern’ that a lack of key skills could undermine growth.

However, businesses may encounter resistance among their people. Some workers fear new ways of working and new technologies. Reskilling measures requiring use of personal time may bias against older workers, parents or caregivers. One study by the Economist Intelligence Unit found worker resistance to new technologies was a technology barrier for over a fifth of executives in Australia, India and Brazil.

There are a number of legal questions in relation to reskilling.

  • Are existing collective bargaining requirements for employers to invest in training sufficiently broad to cover re-skilling?
  • How do works councils and trades unions affect these calculations – what information should be shared? Is consultation required? Do they have any co-determination rights?
  • As employee representatives and authorities focus on re-skilling, will business restructuring programmes become more complicated?

Government and society

Government and society

Government and society

Many people lack skills for today’s economy, let alone tomorrow’s. 25 per cent of OECD-region citizens have poor basic literacy or numeracy skills, suggesting that some current education systems require reform before they can be adapted for the future.

If more jobs are rendered obsolete, inequality and poverty rates could rise, straining welfare systems and the social fabric. This shift also calls into question our models of taxation. At present the global tax system is based on income, but if fewer people work this may have to shift to wealth. At the same time, there has been significant debate about the introduction of things like universal basic income (a flat-rate wage paid to all) to cover the gap.

In addition, work has meaning beyond pure wealth-creation. Even if welfare systems can protect the displaced, the loss of community and purpose among this ‘unnecessariat’ could impact people’s sense of self-worth and their participation in society.

By numbers

96.7%

0

was the year coding was introduced to the school timetable for every UK child aged 5–16, making it the first G20 country to implement coding training nationwide.

96.7%

0

the equivalent dollars per year given to all Singaporean citizens aged 25 by the government to access a pre-approved list of courses (this figure rises for mid-career professionals). In 2016, more than 126,000 Singaporeans took advantage of the scheme.

200

0

million pounds invested in the Institute of Coding in the UK, launched in 2018 by a consortium of over 60 universities and industry players like Microsoft, to tackle the digital skills shortage.

Further insights on the future of work

The future of work explained