How the digital revolution changes the way we work, produce and consume

By Martin Schmalzried

The sixth edition of the IMCO Working Group on the Digital Single Market focused on the topic: “Digital jobs: how the digital revolution changes the way we work, produce and consume”. It brought together a number of experts and MEPs to discuss challenges that the digital revolution brings in our daily lives and how these challenges can be addressed by legislators. Two external experts gave very insightful keynote speeches:

Robert Atkinson, from the Information Technology and Innovation Foundation, underlined that the digital revolution has been overblown. Artificial intelligence is not around the corner, jobs will not be massively lost, the “gig” economy represents only 1% of the current work force in the US and will only slightly grow by 2020. Furthermore, the Gig economy is not about watering down labour laws, working conditions, undermining the welfare state and avoiding taxation but rather about increased flexibility of work, putting pressure on other services for increasing their efficiency/quality and providing better consumer service.

Stefan Herwig, from Mindbase Strategic Consulting, insisted on the need to regulate the digital economy to avoid the abuse of market power which could lead to market failure. He also addressed the question of online business models relying on the exploitation of personal data. From a survey carried out in Germany, 80% of people believe it is not OK for services to be offered for free but make money with the personal data of their users. New developments such as personal assistants like Google Now, Cortana and Siri pose a number of issues regarding user privacy and protecting their rights. More transparency is needed to help consumers navigate the digital revolution, but at the same time, we need stronger regulation to protect consumers but also the creative content industry. There is a clear struggle between the infrastructure (Google, Microsoft, IBM, Apple, Amazon) which serves to disseminate digital content and the digital content creators. When comparing the “analog” creative industry with the “digital” creative industry, we see that the “digital” creative industry fares much worse in terms of growth and turnover. A new balance must be struck to ensure that both the creative industry and the infrastructure thrive, notably through a revised and better copyright law.

Finally, Edward Chancellor stresses in his work that the digital economy and the Internet does not affect the whole value chain. It has provided jobs for relatively few people. For instance, Google has only 33.000 full time employees. The Internet has produced a handful of billionaires but has done nothing regarding median household income.

COFACE is very sensitive to a number of these issues. The question of privacy and fair use of personal data is at the center of its lobbying activities within the Safer Internet policy area. While Robert Atkinson’s presentation minimizes the impact of digitalisation on work, production and consumption, COFACE is skeptical whether the changes that are yet to come will be “smooth” and gradual rather than disruptive. Even if developments in technology, robotics, AI, are gradual, there is no guarantee that the transition for families and workers will be smooth. Job creation may not be fully in sync with job destruction, creating large frictional unemployment which may even become structural as the workers whose jobs were destroyed might not have the necessary skills to transition to new jobs.

With regards to the gig economy, COFACE does not believe that it provides true flexibility, especially in terms of holidays, work life balance considerations, maternity/paternity leave, sick leave and so forth. While “traditional” workers have a paid holiday, paid sick leave, compensation for loss of employment, access to healthcare, access to maternity/paternity leave, gig economy workers are fully dependent financially upon their continued and uninterrupted work, with no guarantees such as minimum salary or maximum working hours.

Finally, COFACE has taken good note of the challenges posed by the unequal distribution of the benefits of the digital revolution and the Internet and will reflect on the way all parties can benefit. There should be a fairer distribution of wealth and profit between digital infrastructure companies and individual families where one or more members of the family is a content creator and which rely on the digital economy for their livelihood.

COFACE intends to hold a conference on how the digital revolution affects the lives of families and especially how it will affect the world of work. Subscribe to our newsletter and follow us on social networks to receive updates on our upcoming events!