Aging population, increased competition, and productivity lost due to the pandemic is accelerating the adoption of automation in Europe
34% of European jobs are at risk and 12 million jobs will be lost to automation across Europe-5 (France, Germany, Italy, Spain, and the UK) by 2040, forecasts Forrester
While the pandemic continues to pressure European businesses to invest more heavily and rapidly in automation, it’s not the only factor contributing to the forecasted job loss. According to Forrester’s Future of Jobs Forecast, 2020 to 2040 (Europe-5), workers with little bargaining power are most at risk of displacement, especially in countries where many are subject to casual employment contracts, including zero-hour contracts in the UK, which require no guaranteed working hours, or part-time jobs with low wages, such as “mini-jobs” in Germany.
Job losses to automation will subsequently impact European workers in wholesale, retail, transport, accommodation, food services, and leisure and hospitality on a bigger scale. Green energy and automation, however, will create 9 million new jobs in Europe-5 by 2040, specifically in clean energy, clean buildings, and smart cities.
Key findings include:
- Europe’s aging population is a demographic time bomb. By 2050, Europe-5 will have 30 million fewer people of working age than in 2020. European businesses need to embrace automation to help fill the gaps of an aging workforce.
- Increasing productivity and improving remote work is a top priority. Countries including France, Germany, Italy, and Spain — where industry, construction, and agriculture provide a larger share of their economies — are investing more in industrial automation to increase productivity.
- The strict definition of a job is starting to break down. Rather than looking at automation as a substitute for a job, European organisations are starting to assess both people and machine skills when executing different tasks, including managing, and updating HR systems or designing training programmes. While jobs will be lost, jobs will also be gained and transformed as new skills become desirable.
- Mid-skill labour jobs that consist of simple, routine tasks are most at risk from automation. Routine jobs make up 38% of the workforce in Germany, 34% of the workforce in France, and 31% of the workforce in the UK; 49 million jobs in Europe-5 are at risk from automation. As a result, European organisations will invest in low-carbon jobs and build employees’ skill sets. Soft skills such as active learning, resilience, stress tolerance, and flexibility — something robots aren’t known for — will complement worker automation tasks and become more desirable.
“Lost productivity due to COVID-19 is forcing companies globally to automate manual processes and improve remote work,” said Michael O’Grady, principal forecast analyst at Forrester. “The pandemic is just one factor that will shape the future of work in Europe over the next two decades.”
However, European organisations are also in a particularly strong position to embrace automation because of Europe’s declining working-age population and the high number of routine low-skilled jobs that can be easily automated. Automation will subsequently become integral to how European governments and employers look at their competitiveness and manage their older demographic.