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Dossier 20/12/2015

Jobs: where will they be created, where will they vanish?

Digital technology is now stimulating and changing every sector of the traditional economy. But it is possible to anticipate this renewal of the economic landscape? Do we know which sectors and which people are going to be affected?

"Change should take place in two waves" explain University of Oxford researchers Carl Benedikt and Michael Osborne. The first to be affected by automation will be the transport and logistics sector, office and administration jobs and production jobs. The next wave will affect jobs in services, sales and construction, due to the development of robots and software capable of creativity and social intelligence. Overall, 47% of the working population work in sectors which are at high risk of unemployment.

Which sectors?

On the other hand, other sectors should become more dynamic. Those involving new technologies above all, but the environment, management, education, the arts and media also have the advantage of creative prospects, notes the Roland Berger institute. New jobs will involve highly-skilled roles requiring scientific skills, design skills or psycho-social skills in services. In other words, the digital revolution is creating new polarisations within business sectors.

Should we limit the introduction of new technologies to protect against job losses? Quite the opposite: studies carried out at a company or business sector level show that the sectors investing in ICTs are more dynamic and tend to create more jobs. Is this a contradiction in terms? These jobs could become obsolete in a few years' time, according to some, and the overall outcome remains uncertain due to losses experienced elsewhere. But there is no innovation without automation, insists one of the founders of Wired magazine, Kevin Kelly. Without it, there would be no new prospects and no new production methods. At the end of 2011, France had 34,000 robots, a figure which is much lower than Italy (61,000) or Germany (163,000) according to the International Federation of Robotics - an observation which could partially explain our lack of competitiveness. Could the solution be found in digital industries?

Are GAFA illusionists?

Six billion euros, 232,000 indirect jobs created in Europe, including 78,000 in France. These figures are attributed to the hegemonic Facebook by Deloitte, a research firm, and are for 2014 alone. Are Facebook, Google, and their ilk a breeding ground for the jobs of tomorrow? Nothing could be less certain.

In addition to the fact that Facebook ordered this study from Deloitte and provided all the data, the methods used can be disputed: The calculation of economic activity includes, for example, equipment (smartphones, packages): "Given the popularity of Facebook, we suggest that part of the demand for new equipment is down to the desire to use Facebook", states the institute. Thanks to the average replacement rate, the social network's activity amounts to 1.8 billion euros, and is credited with the creation of 16,000 jobs. For the entire study, 16% of smartphone sales are therefore attributed to Facebook.

"These results don't make sense" the economist Roger Noll points out in the Wall Street Journal. On the other hand, the number of Facebook employees is not up for debate. The social network currently has 10,082. In France, a few dozen employees work for a turnover of several hundred million euros. This principle is also true for the other giants: Amazon has 110,000 employees (including some who will lose their jobs... to robots), Google 46,000 and Twitter 4,100 with 300 layoffs to come. The typical characteristic of these firms is to generate a large turnover with few employees, rather than hiring many employees. On average, Google generates a million dollars in turnover for each active employee!

A start-up solution?

Is jobs growth in fact based in SMEs? Several studies confirm that the effect of ICT leads to job losses in large companies and jobs growth in small organisations. In fact, the former often integrate "process" type innovations (optimisation of information flows, collaboration tools, for example) which tend to have a negative impact on employment. On the other hand, small companies often benefit from the positive effects generated by "product innovations".

In terms of start-ups, the figures given by Ernst & Young and France Digitale are encouraging: in 2013, staff numbers increased by 22% in relation to 2012 at the 116 start-ups which they surveyed, with a total of 7,566 jobs created (including 91% permanent contracts). This figure seems poor compared with the 132,500 job losses recorded in the same period, but is enough to encourage major industrial groups and services to focus on collective innovation and develop start-up incubators and accelerators. Compared with established companies, the newcomers tend to be more modest employers. The CBS Corporation, one of the largest television networks, has 21,000 employees, whereas Netflix, the American streaming service, has only 2,200 despite the fact that it beat CBS' turnover in 2014! In addition, based on new models, players involved in the collaborative economy have a very high user/employee ratio compared with the classic economy. Blablacar, a world leader in the car pooling industry, has 20 million users worldwide and only 300 employees!

Do start-ups have the necessary flexibility to continue to develop? "Make no mistake" warns Nicolas Colin, engineer, former ENA graduate and creator of The Family, an investment company which supports digital start-ups: "Our leaders often see the world of start-ups as a cute little sandbox where kids play. (...) So long as these new players are small and don't interfere, everything is fine, but as soon as they start to undermine the industry or major national companies, (...) digital technology becomes dangerous, dishonest and oppressive and leads to job losses". In his opinion, public authorities need to encourage these innovators, which can potentially lead to job creation, rather than looking to protect established companies. Furthermore, while the "winner takes all" economy can encourage start-up innovations to great heights, they can be absorbed, such as WhatsApp, which was absorbed by Facebook. In the digital innovation sector, there are frequent restructurings. Who will create the jobs of tomorrow? The answer doesn't only depend on financial dynamics, but also on legislative, institutional, administrative and social policies and systems, which will support these innovations.


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