25 Jul 2024


Industry 4.0 will be a factor in 5m job losses in next five years

The World Economic Forum report aims to help navigate the disruptions caused by the Fourth Industrial Reviolution

The Fourth Industrial Revolution – also known as Industry 4.0 – combined with other socio-economic and demographic changes, will transform labour markets in the next five years, leading to a net loss of more than five million jobs in 15 major developed and emerging economies, according to new research published by the World Economic Forum (WEF) at its meeting in Davos, Switzerland, this week.

The report is based on a survey of human resources officers and strategy executives from companies in nine industry categories and covering 15 of the world’s largest economies. Together, they represent more than 13 million employees and the 15 countries surveyed account for 65% of the global workforce.

A main goal of the report has been to analyse the impact of key drivers of change and assess the relative magnitude of these expected changes by industry and geography, and the expected timing for their impact to be felt on job functions, employment levels and skills.

The Fourth Industrial Revolution is the theme of this week’s meeting, which bring together more than 2,500 leaders from business, government, international organisations, academia and the arts from around the world.

The report, called The Future of Jobs, aims to guide business and policy-makers on how to equip labour forces with the skills to navigate the disruption caused by the Fourth Industrial Revolution. As well as robotics, the report covers the impact of “previously disjointed” developments such as artificial intelligence, machine-learning, nanotechnology, 3D printing, genetics and biotechnology.

It says that these developments will cause widespread disruption not only to business models but also to labour markets, with enormous change predicted in the skill sets needed to thrive in the new landscape.

The report predicts that up to 7.1 million jobs could be lost over the next five years through redundancy, automation or disintermediation, with the greatest losses in white-collar office and administrative roles. These losses will be partially offset by the creation of 2.1 million new jobs, mainly in specialised areas such as computing, mathematics, architecture and engineering.

The WEF says that these predictions “relatively conservative and leave no room for complacency”. The impact of disruption will vary considerably across industry and gender, as well as job type, but will affect every industry and geographical region.

Most of the businesses surveyed believe that investing in skills, rather than hiring more short-term or virtual workers, is the key to managing disruptions to the labour market in the longer term.

“Without urgent and targeted action today to manage the near-term transition and build a workforce with futureproof skills, governments will have to cope with ever-growing unemployment and inequality, and businesses with a shrinking consumer base,” warns Klaus Schwab, founder and executive chairman of the World Economic Forum.