Over the last century, machines have replaced workers in many tasks. On balance, however, technology has created more than jobs than it has displaced (Frey and Rahbari 2016). Technological progress has transformed living standards. Life expectancy has gone upward; basic health intendance and instruction are widespread, andmost people have seen their incomes rising. And yet, fears of robot-induced unemployment ofttimes dominate discussions over the futurity of work.

The World Depository financial institution's World Development Report for 2019 on The Irresolute Nature of Piece of work (World Banking concern 2019) addresses these issues, analysing what exactly is irresolute and what needs to be done. The report argues that, on balance, concerns most robot-induced unemployment appear to be unfounded. Instead, the hereafter of work is driven by the competing forces of automation and innovation, the other 'AI' (Figure i).

Figure 1 In the future, the forces of automation and innovation will shape employment

The ordering of the sectors in the figure should be understood as running from the most automatable to the least automatable, or from the low-skill and middle-skill jobs to high-skill jobs where there is a decline in the relative demand for some less educated workers.

Technological progress enables firms to automate, replacing labour with machines in production, and to innovate, expanding the number of sectors, tasks, and products. The footstep of innovation will determine whether new jobs or tasks sally to counterbalance the pass up of quondam, routine-based jobs.

For example, recent testify for Europe suggests that while technology replaces some workers, it also raises labour demand. Overall, engineering that replaces routine work is estimated to have created more than 23 meg jobs across Europe from 1999 to 2016 (Gregory et al. 2016).

The report casts its net wider than an effort to predict the number of jobs that engineering science may create or destroy, focusing instead on the irresolute nature of the firm, its bear on on skills and the terms on which people piece of work, and how regime policy should be reoriented in response.

The digital economy has expanded firm boundaries and driven a fundamental shift in the nature of firms. Physical presence is no longer a prerequisite to doing business: companies provide online services from abroad or profit from intangible assets such equally software and intellectual belongings; digital platforms generate income from the capital of others. Firms in the digital economy tin can evolve much faster from local start-ups to global behemoths, often with few employees or tangible assets (Figure 2).

Figure 2 Recent technological advances accelerate the growth of firms

WDR 2019 team, based on Walmart annual reports; Statista.com; IKEA.com; NetEase.com

For governments, identifying where value is created in the digital economy—and capturing some of those corporate gains—is not always straightforward, particularly when information technology comes to user data. Under these circumstances, information technology has get easier for companies to locate assets (and subsequently profits) in countries with preferential corporate tax frameworks. Digital markets also provide new risks in the contest context.

The changing nature of firms coincides with a shift in the demand for skills among workers. The demand for less-advanced skills that can be replaced by technology is declining. At the same time, the demand for advanced cerebral skills (Krueger and Kumar 2004), socio-behavioural skills (Cunningham and Villaseñor 2016), and skill combinations associated with greater adaptability are rising (Hanushek et al. 2017).

The ascent of platform marketplaces is besides irresolute the way people work and the terms on which they work, through the so-called 'gig economy'. Individuals and firms need but a broadband connection to trade goods and services on online platforms. This 'scale without mass' brings economic opportunity to millions of people who do non live in industrialised countries or fifty-fifty industrial areas (Brynjolfsson et al. 2008).

That said, the number of gig economy workers remains small as a proportion of the overall workforce. Data is scarce merely, where information technology does exist, the numbers are still low. Information from Germany and kingdom of the netherlands indicate that only 0.4% of the labour force in these countries is agile in the gig economic system. The report estimates that, worldwide, the total freelancer population is around 84 meg, or less than 3% of the global labour force of 3.5 billion. A person counted as a freelancer may too have a regular salaried job. In the Us, for instance, more than than two-thirds of its 57.iii 1000000 freelancers too hold a traditional chore, turning to freelance work to supplement their income (Upwork 2017). The best estimate is that, globally, less than 0.5% of the active labour strength participates in the gig economy.

These changes in the nature of piece of work take been more pronounced in advanced economies, particularly Europe and Due north America where the uptake and penetration of applied science aregreater and labour markets are more developed. Correspondingly, the growth of the gig economy has raised warning bells in those parts of the globe considering it blurs the separate between formal and breezy piece of work: in both cases, workers are typically in low-productivity employment, with most labour laws unclear on the roles and responsibilities of the employer versus the employee. This group of workers often lacks access to benefits. There are no pensions, no health or unemployment insurance schemes, and none of the protections provided to workers in long-term, contract-based employment.

Governments have to invest more than and improve in lifelong learning if workers are to stand a chance of adjusting to future labour markets—from early childhood development programmes and formal schooling, through to college didactics and developed learning programmes. But rethinking social protection systems is simply equally important.

A formal wage employment contract is still the most mutual basis for the protections afforded by social insurance programmes and by regulations which, for instance, set up a minimum wage or severance pay. The German chancellor Otto von Bismarck is acknowledged equally the founder of social insurance—providing benefits for workers in the formal sector financed by dedicated taxes on wages. The organization relies upon steady wage employment, articulate definitions of the employer and employee relationship, and a fixed retirement engagement. But this contributory approach is kickoff to look outdated as the changing nature of work disrupts these traditional norms. Technology shifts the need for workers' benefits from employers towards directly enervating welfare benefits from the state.

Direct social assist programmes also demand to exist revised to ensure that they baby-sit confronting growing labour marketplace risks. The bear witness is irrefutable that cash transfers brand positive contributions to the wellness and didactics of current and futurity generations of people. They reduce stress and depression, increase mental bandwidth, and foster more involved parenting. All of these undoubtedly make for happier, more productive households. But there is generally low uptake of social assistance. In the Eu, only about 60% of social benefits are claimed (Eurofound 2015). This is due to a lack of data well-nigh such benefits, the stigma attached to them, and the bureaucratic hurdles required to be overcome in club to receive them.

'Universal basic income' is the fashionable solution, but in truth, the world knows very little nigh how it would piece of work in practice. Studies advise the financial implications would be significant. The price of a universal basic income for adults ready at the boilerplate poverty gap level ranges from nine.6% of Gross domestic product in depression-income countries to 3.5% of GDP in upper-middle-income countries (Figure 3). A simulation for iv European countries shows that a universal bones income would price (if set at a level equal to existing cash transfer programmes) 13.viii% of GDP in Finland, ten.1% in France, eight.9% in the UK, and 3.3% in Italian republic (Browne and Immervoll 2017). In each case, it was non e'er possible to offset the price of the universal basic income simply by abolishing existing allowances. Other initiatives would have to be cut or taxes raised to provide the necessary cash.

Effigy iii The cost of a universal basic income climbs every bit the income level of countries decreases