Philippe Pochet of the ETUI and LSE sets out what we can expect to see in labour markets, the economy and society as a result of the march of digitalisation

It has become commonplace to predict big, even fundamental, changes in the world of work, in relation to what we call the digital transformation. However, this approach is too restrictive. We are confronted with at least two fundamental changes: on the one hand, the digital revolution and, on the other, the impacts of climate change. Too often, if not almost always, these two transformations are considered separately.

The first challenge is therefore to think about how to reconcile these two futures or even, more ambitiously, the various megatrends that are unfolding (for more on which see the joint ETUC-ETUI conference of June 2018). While there are sometimes complementarities between these transformations (for example, the development of clean, self-driving cars), they can also head in opposite directions, (for example, increasing irregular working time on digital platforms against the wish of working time reduction for limiting our footprint).

The first point of debate is therefore how to take both of these transformations into account, along with their accompanying social and regulatory challenges. The approach of Carlota Perez in her work on technological revolutions offers us a useful analytical framework. She identifies in each of the five great waves of innovation that have taken place since the Industrial Revolution four successive phases: irruption, frenzy, synergy and maturity.

Considered within this framework, the digitalisation of the economy is in fact not a new industrial revolution but the result of a synergy between different innovations that have already existed for 15 to 20 years. For this phase to lead to a new prosperity, new rules of the game must be accepted by the different actors involved.

In adopting this (briefly summarised) approach, we see that the current challenge is to regulate digital platforms and find all possible and necessary protections (contracts, pay and social protection) in these sectors of this ‘new’ economy. Without this, the conflicts that we can already see erupting in such platforms as Uber, AirBNB, Deliveroo, etc., will multiply, preventing economic development and the social acceptance of these changes.

In this context, we can view the European Social Pillar as an attempt at finding new rules acceptable to everyone (this can obviously also involve the application of old rules) and at tackling the increasingly porous boundaries between employment statuses and their respective rights, as well as the issue of defining what an employer is and what obligations they have. However, this is not enough. This phase of synergy must happen with the objective of reducing our environmental impact and radically limiting greenhouse gas emissions. This must be the goal and the direction of this new cycle of innovation.

This radical transformation therefore requires two elements. First, the transition needs to be financed, both in terms of investment and of compensation for those who will be affected by it. This should be made a priority in the next multi-annual Community budget but also in those of the Member States. Secondly, political leadership is needed to decide on the direction to take. The urgency of the climate challenges means we cannot allow constant vacillation and U-turns. Together, these are the actions that will determine the direction and effects, positive or negative, of the big transformations that are currently taking place.

Philippe Pochet is General Director of the European Trade Union Institute and Senior Visiting Fellow in the LSE’s European Institute