DATA //» Firm survey among 2032 producers and service providers (March 2016)

» Current, past and future work equipment (machines, computers, robots, etc.)

» Linked to social security records of all workers employed in the surveyed firms

2

CONCLUSIONS //» Slow but accelerating adoption of 4.0 technologies

» Widening digital divide in the firm landscape

» Neutral effect on total firm labor demand

» Labor demand shifts » towards interactive and analytical tasks » from medium skilled to low- and high-skilled workers » in favor of younger workers

6

ECONOMETRIC APPROACH //Estimate 5-year changes (∆) in labor demand in firm i and worker group j:

4

NUMBER OF WORKERS

VALUE ADDED

RELATIVE WAGES

TECHNOLOGY TYPE SPECIF IC CAPITAL STOCKS

∆ ln Nij = α ∆ lnYi + β ∆ ln wi +∑ ∑ γjk ∆ ln Cik + єijwij

J K

j=1 k=1

COMPLEMENTARITY/SUBSTITUTION EFFECTS BET WEEN CAPITAL TYPE K AND WORKER GROUP J

RESULTS //IMPACT OF TECHNOLOGY INVESTMENTS ON FIRM LABOR DEMAND BY WORKER GROUP, 2011–2016, IN PERCENT

5

CONTRIBUTION //» Provide first evidence on the diffusion of cutting-edge 4.0 technologies among German firms

» Estimate the impact of technology on jobs on a firm-level

» Estimate complementarity/substitution effects between technologies and worker groups

1

Technology and Jobs in the

Fourth Industrial RevolutionF I R M - L E V E L E V I D E N C E

3.0TECHNOLOGIES

4.0TECHNOLOGIES

1.0/2.0TECHNOLOGIES

LABOR DEMAND EFFECT

RISING DEGREE OF AUTOMATION AND DIGITALIZATION

1.0ECONOMY 2.0

ECONOMY 3.0ECONOMY 4.0

ECONOMY

DESCRIPTIVES //3COMPOSITION OF FIRMS’ WORK EQUIPMENT

PRODUCTION EQUIPMENT (IN %)

OFFICE AND COMMUNICATION EQUIPMENT (IN %)

2011 2016 20210

20

40

60

80

100 5.8 7.8 13.4

50.5 42.8 34.5

49.4 52.1 43.8

2011 2016 20210

20

40

60

80

1003.7 5.1 7.9

85.9 83.1 78.8

11.9 13.310.4

D I G I T A L D I V I D E

» mostly larger and more capital- intensive firms

» larger revenues and profits

» more aware of chances and risks of digitization

» a lot of interactive work

» least digitized

» smaller firms with lower revenues and profits

» least aware of chances and risks of digitization

» employ mostly middle skilled workers

» a lot of manual routine work

GROUP I: FORERUNNERSinvested in 4.0 technologies

GROUP II: LATECOMERSnever invested in 4.0 technologies

Small share but fast growth of 4.0 technologies•

3.0TECHNOLOGIES

4.0TECHNOLOGIES

1.0/2.0TECHNOLOGIES

γjk

≥ 5546–5441–4531–40≤ 30

1.50

2.00

1.00

0.50

-0.50

0.00

Modern technologies complement younger workers while substitut ing for older ones

•

AGE

with university

degree

with vocational

training

without vocational

training

1.50

2.00

1.00

0.50

-0.50

0.00

Polarization within firms in favor of both low- and high-skilled workers at the expense of the middle-skilled

•

EDUCATION

LABOR DEMAND EFFECT γjk γjkLABOR DEMAND EFFECT

γjk

1.50

2.00

1.00

0.50

-0.50

0.00

cognitiveroutine

manualroutine

manualnon-routine

interactivenon-routine

analyticnon-routine

Shifts in labor demand from routine tasks towards non-routine tasks (e.g. problem solving, intuition, creativity and social competence)

TASKS

LABOR DEMAND EFFECT

/ / M E L A N I E A R N T Z , S A B R I N A G E N Z , T E R R Y G R E G O R Y, M A R K U S J A N S E R , F LO R I A N L E H M E R , B R I T TA M AT T H E S , U L R I C H Z I E R A H N/ / CO N TA C T : T E R R Y.G R E G O R Y @ Z E W. D E

95% CONFIDENCE INTERVAL

•