AI and future skills in the labour market

The past provides some guidance on how to handle the effects of technological change on society and the labour market. The question is how much. During the Industrial Revolution, some skilled workers lost their jobs as factories were built and machines gradually came into use. This was a period of rapid and tumultuous change in society. It was also a time of significant urbanisation, as the young and able departed from the regions to find better lives and opportunities in the cities. It was not inevitable, but the social changes thrust upon people led to new ways to organize work and to lessen the risks to which individuals were exposed: The establishment of trade unions, the introduction of suffrage for both men and women, the right to a pension and social security, to name a few. New institutions and safety nets were part of a process towards safer and more inclusive democracies and societies.

One lesson from the past is thus that societies may eventually find ways to respond to changes – be they from technology or some other source. However, this may be scant comfort for those who find themselves in the midst of a major change, as the adjustment period often measures in decades rather than in years. What is more, citizens in modern welfare states also have strong expectations that the current levels of welfare will not only continue but also follow general increases found elsewhere in private production. For example, when the private sector offers interactive services online via web-pages, we soon expect the public sector to provide similarly.

With the institutions that have been developed after the Industrial Revolution, we are now better able to cope with the effects of technology on people’s lives. However, the lessons from the past serve as a rough guide and each period has its own set of challenges without a delineated answer from the past. Looking ahead, we cannot know if the labour market adjustment from digitalization will be harsher than in the last few decades. On the technology side, a particular unknowable is when the next breakthrough in AI (artificial intelligence) will be made.

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