Research perspectives on the future of work

Our Summary

In a rapidly changing world, the future of work appears as a major societal priority.

Two Directorates-General of the European Commission – the Directorate-General for Employment, Social Affairs and Inclusion, and the Directorate-General for Research and Innovation – have launched a joint initiative for Member States to discuss priorities in research and innovation.

This work is based on four workshops organized with all relevant stakeholders (industry, academia–research–education, central administrations, and social partners), supported by an in depth literature review of materials already published since Covid by academia and the Commission on employment and its challenges for tomorrow.

These workshops focused on the gaps identified in four major areas considered to be priorities.
 

The ecological transition and working life

Ongoing initiatives aimed at shifting industries and economies from “brown” to “green,” such as the European Green Deal and its related industrial plan, are expected to profoundly reshape the EU’s social and economic landscape and lead to a substantial redistribution of labor and capital across key sectors.

Green investments were expected – at least in theory – to generate a net creation of 2 million jobs in Europe by 2030, particularly medium skilled and middle income jobs in the energy and construction sectors. However, achieving this outcome is proving to be far more difficult due to global competition for raw materials and the shortage of qualified workers.

The ecological transition has already required – and will continue to require – large scale reskilling and upskilling of workers. The unequal distribution of resources, capacities, and readiness levels among different social groups, sectors, and regions within EU Member States is slowing progress toward the expected outcomes. This transition involves not only technological changes and policy reforms, but also fundamentally reshapes the employment landscape, labor markets, skills needs, and development. The evolving nature of work in the context of sustainability calls for a nuanced understanding of the potential impact on employment sectors, working conditions, and the skills required for future jobs.

For Sweden alone, the transition in the automotive sector could lead to the loss of 75,000 jobs in the coming years, even though battery manufacturing could create around 2,500 new jobs. Conversely, the circular economy is expected to create up to 110,000 new jobs. But there is greater certainty regarding the loss of the 75,000 jobs than the creation of the 110,000 new ones.

The analysis highlights significant knowledge gaps, particularly concerning the adoption of a green taxonomy that would make it possible to better understand the potential impact of transitions on employment sectors and working conditions. The dynamics of collaboration between the state, universities, and industry differ somewhat between innovation activities related to the digital transition and those linked to the ecological transition. In the field of digital innovation, universities mainly work with small and medium-sized enterprises (SMEs). Conversely, in the field of the ecological transition, universities tend to collaborate more with the state and with other universities and research organizations.

The impact of public administration and governance is significant, particularly with regard to the degree of centralization within a country. Decentralized systems, such as those in place in Northern Europe, facilitate collaboration between universities and local actors.

Over a ten year horizon, several risks and unknowns emerge. These include changes in labor market needs, the pace of technological progress, and the risk of new forms of inequality in access to resources and opportunities. For example, in 2021, only 6 women for every 10 men were considered to have green skills; workers with higher levels of education were more likely to have a green profile; and older workers were generally more likely to be affected by unemployment and job losses in brown sectors.

Navigating an increasingly digital world of work

Rapid technological progress observed in recent decades has had both positive and negative effects across many sectors. Among the positive effects, digitization has the potential to revolutionize the labor market by creating new employment opportunities, improving productivity and job quality, and fostering innovation. But the digital transition also comes with significant challenges.

The first obstacle is the uneven digitization of companies across Europe and its potential to fuel the existing digital divide. The persistence of current trends in digital related inequalities threatens to exacerbate regional disparities in Europe and widen the gap between SMEs, mid sized companies, and large enterprises.

Recent publications have shown that digitization processes reinforce mechanisms of social exclusion and do not contribute to democratizing the benefits of technology, but instead strengthen already privileged positions. Digitization processes may also generate new vulnerabilities, particularly in the world of work, where the digitization of value creation can lead to changes in workforce structures and create new categories of vulnerable workers.

More broadly, the social impact of digitization relates to four main concerns:

1. the pervasive role of technology in platform work
2. physically and mentally demanding jobs
3. the lack of relevant digital skills among the workforce, and
4. the elimination of jobs in the age of AI.

The shared dynamic underlying these challenges is the rise of “platformization,” described as “a general organizational principle that affects industry, the organization of work in the field of consumption, and the provision of public services.” Initially presented as a heterogeneous form of employment, platform work is now far more than a simple flexible matching of labor supply and demand using digital tools. It has evolved into an unequal and exploitative working dynamic between employers and workers, generally associated with low wages and a lack of social protection, affecting workers from particularly vulnerable groups who have no alternative sources of income.

One of the key factors behind the rise and widespread adoption of this new form of work is the development of AI technologies, which has amplified power imbalances between platforms and workers and created new vulnerabilities that companies can exploit. More specifically, innovations in AI have enabled the introduction of algorithmic management practices. These intrusive methods essentially allow employers to collect large amounts of data from employees in order to maximize productivity. Beyond workplace surveillance, AI has also emerged as a “new competitor” to human labor, reducing workers’ bargaining power and creating new categories of vulnerable workers in the digital economy. This is the case for the millions of “invisible” AI workers who train large language models, generally by performing repetitive tasks and sometimes being exposed to explicit or potentially harmful content. The rapid dynamics of digitalization have not only affected job composition and employee well being but have also led to increased labor market polarization, highlighting the need for stronger efforts in upskilling and reskilling workers.

As technological innovation advances and the adoption of AI in the workplace increases, low‑skilled workers are increasingly exposed to the risks of digitalization, while skilled workers and investors reap the benefits.

The dual transition and vulnerable groups

Although the notion of vulnerability does not correspond to a legal concept, it has recently been used in certain jurisdictions to describe specific situations of economic and social disadvantage. Vulnerabilities include disability, unpaid care work, and regional disparities, but they also highlight gaps in available data and underscore the need to strengthen social protection systems as Europe undergoes these simultaneous transitions.

The transition – whether green or digital – does not merely reshape labor markets; it also redefines the very concept of vulnerability, as it introduces new risks and exacerbates existing inequalities. Vulnerable workers, including those in precarious jobs, self employed individuals, or those facing discrimination due to personal characteristics, are likely to encounter heightened challenges in this new context. These challenges are not limited to traditional sectors but are worsened by transition related effects such as job losses in carbon intensive industries or the skills gap many workers face due to the rapid digitalization of industries.

Vulnerability is not inherent to employment arrangements themselves: by definition, vulnerable workers either hold jobs that fail to guarantee minimum social standards, face discrimination or prejudice, or possess personal characteristics that do not align with canonical and rigid work norms or criteria, such as disability.

In the EU sense, the concept of a vulnerable worker encompasses a wide range of people, including migrant workers – often without a valid work visa – and those in atypical or non standard forms of employment. Vulnerability may also extend to self employed workers, who are not covered by collective agreements and who are engaged under “bogus” self employment arrangements – that is, individuals who perform tasks under the supervision of a company but do not have employee status. These categories of workers often face difficulties related to pay, working conditions, job security, and access to social benefits. Income related difficulties faced by atypical and temporary workers are particularly significant in the current context of sluggish economic growth, high inflation rates, and intensified global competition.

While the most vulnerable have always faced difficulties, the unstable economic, political, and social context that is exacerbating these transformations is likely to intensify existing forms of vulnerability and create entirely new challenges. There is a need to deepen research into the interaction between the green, digital, and demographic transitions; into how the identified challenges affect people already in vulnerable situations and reinforce existing inequalities; and into the likelihood that these challenges will create entirely new vulnerable groups. These challenges include skills mismatches and digital exclusion, job security in the gig economy, and the displacement of certain traditional industries toward greener sectors.

Unsurprisingly, among the most vulnerable groups affected by the digital and green transitions are workers with disabilities. According to a study commissioned by the European Parliament, the employment rate of people with disabilities in the EU is only 50.6%, well below the 74.8% rate for people without disabilities. The unemployment rate is also disproportionately higher among young people with disabilities than among their non disabled peers. Women and young people with disabilities are also more likely to experience discrimination at work, which significantly hinders their access to employment. Worse still, for example in the area of informal and unpaid care in Europe, due to the lack of data, nearly 92% of women are considered regular caregivers and 81% daily caregivers, compared with 68% and 48% of men, respectively.
 

The future of work in EU public administrations

In recent years, the European Commission has taken concrete steps to develop digital solutions for the delivery of public services and to ensure cross border interoperability among public administrations. Many European public administrations have already digitized their services and adopted new technologies such as artificial intelligence, blockchain, and other digital tools. The concept of e government goes hand in hand with improving the accessibility and efficiency of public services, providing citizens with easier access and reducing the risk of corruption. It also represents an opportunity to involve more citizens, businesses, and organizations in political life at a lower cost.

At the same time – or rather as a consequence – the attractiveness of working in the public administration has declined sharply over the past decade, particularly for younger generations. Public administration employs 21% of the EU workforce and is often the largest employer in a country. The economic crisis has had a significant impact on public sector reform, particularly in terms of job quality and social protection. Many highly skilled young workers favor the private sector over the public sector, which is often perceived as rigid and restrictive. In addition, workers’ expectations have evolved following the COVID 19 pandemic, with the emergence of new priorities such as a better work–life balance, telework, greater flexibility, and the development of new skills. These priorities are not always compatible with the requirements of employment in public administration.

Another obstacle is the volatility of skills and knowledge gaps, which represent a major challenge for upskilling and training within public administration. As a result, many public administrations – whose working methods are outdated – are unable to provide effective training for their staff, making them less attractive in the labor market.

Finally, public administration penalizes itself through rigid recruitment procedures. The declining attractiveness of public sector jobs is also linked to the specific requirements of competitive examinations, which impose qualifications that limit the number of candidates. Moreover, demographic trends and the aging of the workforce pose a major challenge for public sector staffing levels. Other challenges include the growing complexity of policies and increasing demands in terms of human and financial resources for the public sector to cope with these changes. Lastly, local administrations located in rural and remote areas are often poorly prepared to manage the negative repercussions of transitions – such as job losses and the gradual phasing out of sectors – thereby widening the gap between regions, levels of government, and the public and private sectors.