22nd February 2017

Employment issues & Industry 4.0

A PwC survey among more than 100 Czech general managers shows that 25% of companies included in the survey have incorporated digital technologies into their products or services. One-third of the companies are using data or digital technologies in automatization and optimisation of production. Due to the lack of workforce, more and more businesses will aim at decreasing their dependence on human labor. In 2016, it was priority for 49% of general managers who took part in the survey; in 2017, it is 91% of respondents.


PwC: Z důvodu nedostatku lidí ve firmách bude v letošním roce obrovským tématem snaha o nižší závislost firem na lidské práci, jinými slovy robotizace, optimalizace práce a zefektivňování. Jestliže v roce 2016 představovala prioritu pro 49 % generálních ředitelů, letos je to 91 %.


Former CEO of Ceska sporitelna Pavel Kysilka in an interview for www.ihned.cz says that robots are disciplined, they work 24 hours a day and are not united in trade unions. The quality of artificial intelligence has been growing and its price has been decreasing...Investors will make their decisions whether to maintain or close down a plant based on the size of the market and size of the pool of skilled people "culturally ready for the digital era". We have to change the nature and form of our educational system, he says in an interview for www.ihned.cz.

In its recently published study, McKinsey Global Institute says that automation could raise productivity growth globally by 0.8 to 1.4 percent annually. It’s not just low-skill, low-wage work that could be automated; middle-skill and high-paying, high-skill occupations, too, have a degree of automation potential. As processes are transformed by the automation of individual activities, people will perform activities that complement the work that machines do, and vice versa. A recent McKinsey study concluded that 49% of the time workers spend on their jobs could be supplanted by automation, just by using technology that already exists. Our scenarios suggest that half of today’s work activities could be automated by 2055, but this could happen up to 20 years earlier or later depending on various factors, in addition to other economic conditions. Our analysis shows that humans will still be needed in the workforce: the total productivity gains we estimate will only come about if people work alongside machines. That in turn will fundamentally alter the workplace, requiring a new degree of cooperation between workers and technology.

Also, an article Technology vs. the Middle Class, published by the Wall Street Journal, based on discussions at the World Economic Forum in Davos, Switzerland held in January 2017, says the ‘fourth industrial revolution’ will cause income inequality. Still, while there are jobs to be had, they aren’t—to put it bluntly—all that they used to be. The same economists who laud tech for increasing standards of living also note many forms of employment people are pushed into don’t pay as well or aren’t as rewarding as the old ones.When workers lose a middle-class manufacturing or clerical job and end up in the service sector, the effect on their wages, benefits and job security contributes to what economists call polarization. In a polarized labor market, a minority of highly skilled employees—the ones who can leverage technology to be more productive—effectively replace the labor of others and are paid accordingly. Everyone else sees their fortunes dwindle. Polarization has hit the middle class hard, but the devaluation of human labor will continue up the income ladder, says Branko Milanovic, an economist who specializes in income inequality.That’s partly because, more than ever, we have the ability to eliminate higher-paying knowledge work. Read more.

An advice by CplJobs is to work on your technical skills, transferable skills and social skills. These will be invaluable assets as automation maintains its rapid march on all areas of our lives. 

Meanwhile, as part of the EU-level discussion on regulation of AI/robots, Mark Skilton of the Warwick University told BBC World News: There are a lot of positive things about robots...but we have got to be careful as to how these robot devices or supervisory programs evolve, who is controlling this, how can we oversee when things go wrong, because not all things are always going to work correctly.

Members of the American Chamber of Commerce in the Czech Republic