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The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 José M. Salazar-Xirinachs Regional Director for Latin America and the Caribbean

The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

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Page 1: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

The Future of Work

Caribbean Future of Work Forum, Kingston, Jamaica

Wednesday 22 February, 2017

José M. Salazar-XirinachsRegional Director for Latin America and the Caribbean

Page 2: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

THE FUTURE OF WORKis influenced by four main groups of drivers

•- New business models- On-line platforms: e-Bay- Gig economy - crowdwork- Work-on-Demand- Global supply chains - Outsourcing

- Consumer awareness about:privacy, health, diet, environment,ethics.

• Economic cycle -“deceleration”

• Large productivity gap

• How to achieve greater productive diversification / economic complexity

• - Internet- Cloud technology- Big data - Internet of things- Automation- Robotics- Additive manufacturing, 3D- Genetics and bioprocesses

• - Longevity

- Youth explosion

- Greater humandiversity, migration

- Gender parity IDemographic

and population-

related

IITechnological

IITechnological

IVRelated to

models/enterprisestrategies and

forms of contracting

IVRelated to

models/enterprisestrategies and

forms of contracting

IIIRelated to productive

development (or under-

development)

IIIRelated to productive

development (or under-

development)

Page 3: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

FUTURE OF WORKDrivers of change in the world of work

New business models•- On-line platforms: e-Bay•- Gig economy - crowdwork•- Work-on-Demand•- Global supply chains •- Outsourcing

• Consumer awareness about:•privacy, health, diet, environment, ethics

• Economic cycle -“deceleration”

• Large productivity gap

• How to achieve greater productive diversification / economic complexity

• - Longevity

• - Youth explosion

• - Greater human diversity, migration

• - Gender parity IDemographic

and population-related

IITechnological

IITechnological

IVEnterprise

models and forms of

contracting

IVEnterprise

models and forms of

contracting

IIIRelated to productive

development (or under-

development)

IIIRelated to productive

development (or under-

development)

• - Internet• - Cloud technology• - Big data • - Internet of things• - Automation of knowledge

work• - Robotics• - Additive manufacturing, 3D• - Genetics and

bioprocesses

Page 4: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

Impacts: opportunities and risks of theTechnological Revolutions

1) Disruption: impact on employment:

Dynamic of job destruction and creation –“technological unemployment” because of digital economy, automation

• Pessimistic outlook:– Machines will massively replace humans in

many occupations– McAfee & Brynjolfson, 2014; M. Ford, 2015;

Frey & Osborne: 47% of occupations at risk

• Optimistic outlook:– There will be replacement, but also complementarity and

an increase in human skills – For every ’ordinary’ job lost, three more will be

created with the ‘innovation explosion’ - Gil Giardelli, expert on innovation.

Page 5: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

Impacts: opportunities and risks of theTechnological Revolutions

2) Transformation of occupations:– Demand for new, advanced skills

increases (STEM jobs), and– Existing skills become obsolete

more quickly

3) Risk of greater inequality:– Highly skilled, “connected”

workers win– Those with low skills, who are

“disconnected,” lose (Hollowingout - Author).

The rapid change in the skills profile for the 4th IR challenges formal education and occupational training systems and puts the focus ona Human Talent Development Agenda.

Page 6: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

Impacts depend on degree of prepared-ness (capabilities) at various levels

Connectivity and

Computing Power

Connectivity and

Computing Power

Internet of Things (IT)

Data analysis and

Intelligence

Data analysis and

Intelligence

Advanced analytics and

Artificial Intelligence

(AI)

Human-machine Interface

(HMI)

Human-machine Interface

(HMI)

Augmented reality/ virtual

reality/ wearables

Advanced robotics

3D printing

• Innovation in Products or Services (Supply of the future)

Digital and Physical Transfor-mation

Digital and Physical Transfor-mation

• Individual (Operator of the future)

• Factory (Factory of the future)

• Enterprise (Producer of the future)

• Industry (Value chain economics)

• Government (Policies for productive development & jobs)

• Global (Global supply chains)

Degree of Prepared-ness

Rate of Adoption

CapabilityAssessment

Impact and rate of adoption depend on the degree of preparedness (capabilities) at various levels:

Convergence of New Technologies = Industry 4.0

Page 7: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

21st Century skills at individual level

Basic knowledge:• Scientific:

mathematics, science.

• Reading • ICTs• Financial• Cultural/Civic

Competencies:

• Critical thinking• Creativity• Communica-

tion• Collaboration

Character traits / socio-emotional skills• Persistence• Adaptability• Curiosity• Initiative• Leadership• Social and cultural

awareness

The “operator of the future” must have:• Ability to deal with intelligent machines• Ability to adapt, observe, judge and take decisions • Ability to learn to learn and adapt • Innovation is done by people!! • The best jobs demand these skills

Qualifications and skills are the key to the Future!

Page 8: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

FUTURE OF WORKDrivers of change in the world of work

•-•New business models•- On-line platforms: e-Bay•- Gig economy - crowdwork•- Work-on-Demand, •- Global supply chains •- Outsourcing

•- Consumer awareness about:•Privacy, health, diet,•environment, ethics

• Economic cycle -“deceleration”

• Large productivity gap

• How to achieve greater productive diversification / economic complexity

• - Internet- Cloud technology- Big data - Internet of things- Automation- Robotics- Additive manufacturing, 3D- Genetics and bioprocesses

• - Longevity

- Youth explosion

- Greater human diversity, migration

- Gender parity IDemographic

and population-related

IITechnological

IITechnological

IVEnterprise

models and forms of

contracting

IVEnterprise

models and forms of

contracting

IIIRelated to productive

development (or under-

development)

IIIRelated to productive

development (or under-

development)

Page 9: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

How has Productivity performed in Latin America and the Caribbean?

From bad to disastrous

• The region’s economies have been growing because of raw materials prices and factor accumulation, not because of productivity

• Average productivity is 50% of US level. In some countries, it is 30%. Instead of closing, the gap is widening.

– “The tragedy of Latin America” - IDB 2010– “The Achilles’ heel of the region’s economies” - ECLAC– 2016

• Structural transformation has not shifted enough workers from low-productivity sectors to high-productivity sectors (Rodrik & McMillan, 2012).

• Exports are concentrated in just a few products.

• Large gaps in innovation, education and work force skills.

Productivity and productive development are a pending task and a an urgent agenda!

Page 10: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

What can be done to speed up productivity growth?

• Countries should start new engines for growth. Avenues include:– Quality education and relevant training– Greater formalization of employment and enterprises– More employment in medium and large enterprises and less

self-employment and employment in microenterprises– Diversification of production: new sectors – Policies to improve preparedness for adoption and

dissemination of new technologies and the 4th IR– Policies to promote innovation

• Major institutional instrument for various of these goals: Cluster development policies with a sectorial and territorial approach.

Page 11: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

Cluster and productive development policies

• The functions of cluster initiatives are:

– To accelerate learning, innovation, adoption of technologies and productivity, through “interactive learning” and “discovery” processes, benefiting from “economies of agglomeration”.

– To resolve “coordination failures” and facilitate public-private collaboration.

– To organize collective action: Promote the design and implementation of joint projects among enterprises that belong to the cluster and between those enterprises and other members of the cluster network, and make the provision of public inputs specific to the cluster more efficient.

– To invest in human talent specific to the cluster, resolve skills-mismatch problems and improve local labour markets.

Page 12: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

Questions and Answers

• Where will the jobs in the Caribbean come from?– From new engines of growth based on concrete economic

activities:• Tourism• Financial services• Creative industries• Agriculture and agribusiness• Green growth: Renewable energy, • Blue• Strong entrepreneurial ecosystems

– From formalization and a higher proportion of medium sized enterprises

– From Strong Entrepreneurial Ecosystems

Page 13: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

Questions and Answers

• What are the policies and institutions needed to ensure that innovation and technological change create new and better forms of work?– Policies: Productive Development Policies:

• Productive diversification, • Productivity growth, • Export growth, • Investment attraction, • Innovation, • Education and skills.

– Institutions: Social dialogue institutions for productive transformation and employment

• Productivity and Competitiveness Councils• Skills councils• Dual Education & on the job training institutions

Page 14: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

Questions and Answers

• How do we match the skills and training with the needs? – Comprehensive approach to 21st Century Skills– Technological prospection– On the job training and dual education– Sectoral skills councils and social dialogue– Better alignment of skills development policies with PDPs– Skills recognition and certification– National Qualification Systems

Page 15: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

CLUSTERS IN BASQUE COUNTRY

YEAR

ACEDE – Basque Home Appliances Cluster 1992

AFM – Machine Tools Cluster 1992

ACICAE – Basque Automotive Cluster 1993

GAIA – Electronics & ICT Cluster 1994

UNIPORT – Port of Bilbao Cluster 1994

ACLIMA – Basque Environmental Cluster 1995

Energy Cluster 1996

HEGAN – Basque Aerospace Cluster 1997

Basque Maritime -Shipbuilding Cluster 1997

Paper Cluster 1998

EIKEN – Basque Audiovisual Cluster 2004

• Cluster policies can be a powerful tool for promoting productivity, linkages, formalization, innovation, internationalization and quality employment:

– In 2010, there were more than 130 cluster development programmes in 31 European countries (European Cluster Observatory)

– In 2010, the US SBA launched more than 40 clusters throughout the country

– In the Autonomous Community of the Basque Country, the cluster development policy has been a key ingredient of PDPs, with great success

Cluster and productive development policies

Page 16: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

Industrial and Cluster Policies in the BasqueCountry: Research, Technology and Innovation

• 128 Entities in the Basque Science & Technology System• 4 Universities with more than 67,000 students• Generation of knowledge:

– 9 BERCs: Basque Excellence Research Centres

– 7 CICs: Cooperation Research Centres (Research in biomedicine, biomaterials, nanosciences, advanced manufacturing, micro-technologies, energy, tourism)

• Technological Development:– 2 leader platforms in Europe with 2,900 research professionals

• 6 Sectoral centres• 6 Health R&D units• 6 Public research entities• 4 Science and technology parks with more than 15,000 people

working in more than 400 enterprises• All of that in a country with 2.5 million inhabitants!

Source: R Monge and JM Salazar-Xirinachs, Políticas de Clusteres y de Desarrollo Productivo en la Comunidad Autónoma del País Vasco, ILO Americas, Technical Reports, #3, 2016.

Page 17: The Future of Work - International Labour Organization · The Future of Work Caribbean Future of Work Forum, Kingston, Jamaica Wednesday 22 February, 2017 ... HEGAN – Basque Aerospace

CONCLUSION –Growth and productive development

• A better future of work depends on theimplementation of policies that foster productivedevelopment and human talent, to promoteinclusive growth with more and better jobs.