The European Commission Expert Group on the Economic and Societal Impact of Research and Innovation (ESIR) has on several occasions supported the objective of fostering a systemic industrial transformation that goes beyond the deepening of digital technology in industry, in order to adopt a sustainable human-centric and resilient paradigm. The ‘Industry 5.0’ approach, still far from being universally recognised, is essential for the future of the European economy and is a much-needed step to ensure that industry becomes a protagonist rather than a passive transformative factor. In this policy brief, the ESIR specifically analyses the intersection between industrial transformation and the future of work.
The future of work is undergoing a perfect storm, which has also given rise to increasingly strong warning signs of labour displacement and skills shortages and equally worrying trends to eliminate labour disruptions as less important than other emerging issues, including those related to economic competitiveness and strategic autonomy. In this note, the ESIR presents many dimensions of the debate on the future of work, placing them in the context of current EU industrial and innovation policies. Research focuses in particular on the debate on industrial transformation from the perspective of Industry 5.0.
Section 1 of the note argues that the reference paradigm for industrial transformation, the so-called Industry 4.0, takes insufficient account of the size of jobs and skills, as well as the related social impact; and that, similarly, the current focus on ‘net zero’ does not place sufficient emphasis on the urgency of jobs. The ESIR therefore proposes that the EU adopt a comprehensive ‘Industry 5.0’ strategy to make systemic industrial transformation a protagonist of future resilience and sustainability rather than an obstacle to a more prosperous future. This ‘Industry 5.0’ approach must include the future of work as a key dimension of future sustainable development, at the same level as other key objectives such as protecting climate and biodiversity and, more broadly, ensuring long-term resilience. We also propose that this approach be accompanied by a strategic foresight and outlook analysis, given the uncertainty associated with the evolution of industry (and work) in the coming years. It should be recalled that the future of long-term work implies too much uncertainty for any safe projection.
Section 2 proposes a step-by-step approach to integrating jobs into EU industrial policy, both at EU and regional level, based on foresight and retrospective analysis. This approach would help policymakers to consider key issues such as:
- “What future” or better: what other futures contracts may arise, with different consequences for the future of work, and how to take into account increased uncertainty and the high-risk world when planning the future of work;
- Whatjobs will emergein Europe in terms of quantity, quality and specialisation; and
- Whatskillswill be needed, especially if a human-centric approach to digital transformation is taken, which requires complementarity between people and machines, as well as the primacy of the former over the latter.
This will lead us, beyond the traditional focus on STEM and programming, towards a wider recognition of critical thinking, social and soft skills, as well as field-related knowledge, creativity and imagination as distinctive features of future human occupations. ESIR also proposes methodologies to map Europe’s relative technological specialisation and future job creation potential in a way that also takes into account the regional specificities of the EU territory; and advocates integrating the creation of “quality jobs” into all EU policies.
In short, the EU currently lacks a comprehensive strategy for the systemic transformation of the economy that takes due account of the quantity and quality of future jobs. The recent launch of the Net-Zero Industry Act and ad hoc “academies” to create the necessary skills is a promising step; however, even this welcome step does not attach sufficient importance to the issue of job creation and skills stimulation. In addition, Europe’s ambition to become a world-class destination for green investment, which in turn would create new jobs, seems to have been undermined by the relaunch of industrial policy in competing destinations such as the United States, where several policy measures (including in particular the Inflation Reduction Act) attract clean energy investments with the promise of tax credits and comparatively lower regulatory burdens.