Technology scenario: Employment implications of radical automation

This report looks into the impact of the accelerated application of automation and digitisation technologies on the wage and tasks structure of employment in Europe. Despite the high level of uncertainty of these projections, the contribution of this report is to extend the analysis beyond just the technologically feasible substitution of workers by machines by incorporating some economics to the analysis. This includes the macroeconomic feasibility of the investment cost of automation, the multiplier effects of loss of demand – not only because of initial job loss, but also as a result of the shift away from other labour incomes – and job creation in the supply chain emanating from the increased demand for information and communications technology (ICT) equipment. The analysis is carried out using the E3ME macroeconometric model, which provides information on sectoral impacts, together with the Warwick Labour Market Extension model for occupational analysis. Further analysis of the employment developments in Europe is undertaken using Eurofound’s European Jobs Monitor.