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Articles

How digital technologies affect the labor market

When looking at new technologies, it becomes clear that artificial intelligence will never replace humans. Why people's fears and concerns are unfounded and what advantages the Technology Supertrend can offer the labor market.

New technologies cause unease

We live in a time of rapid technological change. Many people are uneasy about this. It often raises the question of whether there will even be enough jobs for people in tomorrow's world, with all the new technologies, the use of artificial intelligence and robots, and increased digitalization of the world of work.

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The rise of robots

Number of robots per 100 workers in production and industry
Source: International Federation of Robotics, International Monetary Fund

Concerns about the digitalization of the world of work are unfounded

Although concerns about the digitalization of the world of work are understandable, in the past they have largely proven completely unfounded. The washing machine came into our lives 80 years ago, the internet around 25 years ago, and the smartphone less than ten years ago. But even though the washing machine made manual work redundant, it clearly helped to increase our standard of living and make our everyday lives easier. And even though digitalization made many activities redundant in the world of work, information technology companies have created millions of new jobs in recent years. Google (Switzerland), for example, opened an office with two employees on Zurich's Limmatquai in 2004. Today the company has 5,000 employees in Zurich.

Globalization is also accelerating the spread of new technologies. It facilitates particularly complex or capital-intensive developments. Science took almost 15 years to decode the human genome for the first time. The research project cost the equivalent of around 30 billion Swiss francs. Today, it is possible to sequence the entire human genome in a few days.

Technology Supertrend influences the future of work

At this point it seems reasonable to make a few generalizations about the digitalization of the world of work.

First: The positive impact of new technologies on our standard of living should continue into the future. Indeed, the most important impact of the Technology Supertrend appears to be less about destruction than about changing the contents and processes of work.

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Technological innovations and economic development cycles

Source: International Monetary Fund and Maddison Research Project
Historical performance and financial market scenarios are not reliable indicators of future results. 

Second: Technological innovations tend to increase the productivity of capital and work. And let's not forget that this also promotes earnings growth, the job market, and tax income in the medium term.

Third: Countries and companies can mitigate unwanted side effects of technological transitions by promoting continuing professional development, offering flexible employment relationships, and providing financial incentives. Low-skilled workers will naturally benefit most from this.

Fourth: In the future, it will be less important for individuals to have encyclopedic knowledge than to have a capacity for lifelong learning and willingness to be inquisitive and flexible.

Fifth: As the shelf life of technologies, products, and patents becomes ever shorter, the value of continuity will increase. But what matters more than ever is not the artificial intelligence of robots. Human creativity, empathy, and the ability to think and feel holistically are called for. The value of these skills and qualities in particular is rising disproportionately in the digital world of work.