Written by
Owen Hughes, Senior Editor
Owen Hughes
Senior Editor
Full Bio
on January 20, 2022
| Topic: Digital Transformation
Automation will replace some jobs, but also create new ones.
Image: Teera Konakan/GETTY
Up to a third of job roles in Europe could be made redundant by automation over the next 20 years as companies battle to increase productivity and fill skills gaps created by an ageing population, according to Forrester.
The tech analyst’s latest Future of Jobs Forecast estimates that as many as 12 million jobs could be lost to automation across Europe by 2040, primarily impacting workers in industries such as retail, food services, and leisure and hospitality.
Mid-skill labour jobs that consist of simple, routine tasks are most at risk from automation, the report said. These roles make up 38% of the workforce in Germany, 34% of the workforce in France, and 31% of the workforce in the UK.
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In total, 49 million jobs in ‘Europe-5’ (France, Germany, Italy, Spain, and the UK) face being lost to automation, according to Forrester. This jeopardizes casual work, such as zero-hour contracts in the UK, and low-paid, part-time jobs where workers hold “little bargaining power”.
A combination of pressures is prompting businesses to ramp up their investments in automation, particularly in countries where industry, construction and agriculture are big business.
While small and medium enterprises (SMEs) with up to 50 workers capture two-thirds of European employment, their productivity lags that of larger corporations, according to Forrester. In manufacturing, for example, ‘microenterprises’ are 40% less productive than large companies.
A five-year study of robot adoption at French manufacturing firms found that robots lowered production overheads by reducing labor costs by between 4% and 6%.
Business leaders also see automation technology as a means of filling the gaps created by Europe’s ageing population, which Forrester describes as “a demographic time bomb.” By 2050, Europe will have 30 million fewer people of working age than in 2020, the analyst said.
Productivity lost to the pandemic is seeing organizations look to machine processes to recoup efficiency, while industries that were already using automation to grow their revenues have invested even more heavily in the technology to increase service delivery and mitigate pandemic restrictions.
“Lost productivity due to COVID-19 is forcing companies globally to automate manual processes and improve remote work,” said Michael O’Grady, principal forecast analyst at Forrester.
“European organisations are also in a particularly strong position to embrace automation because of Europe’s declining working-age population and the high number of routine, low-skilled jobs that can be easily automated.”
Business leaders outside of Europe are also exploring the role of automation in bridging skills shortages and speeding up processes in the enterprise.
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Polling of 500 C-suite executives and senior management personnel by automation platform UIPath found that 78% were likely to increase their investment in automation tools to help them address labor shortages. Business leaders are turning to automation because they are struggling to find new talent (74%).
This means that, all told, only three million jobs will truly be ‘lost’ to automation by 2040 – the caveat being that people who lose jobs may not find new ones.
“Automation will subsequently become integral to how European governments and employers look at their competitiveness and manage their older demographic,” said O’Grady.
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UIPath found similar sentiment among executives in the US: 85% of survey respondents said incorporating automation and automation training into their organization would help them attract new talent and hold onto existing staff. Meanwhile, leaders said automation is helping them to save time (71%), improve productivity (63%) and save money (59%).
Academic forecasts of jobs that could be lost to automation vary wildly. The European Parliament’s 2021 ‘Digital automation and the future of work’ report found that estimates varied from as little as 9% to almost half (47%).
“Machine-learning experts often drive this uncertainty,” said Forrester.
“They imagine future computer capabilities without understanding enterprise technology adoption constraints and the cultural barriers within an organization that resist change.”
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