As you know, on November 29, 2018, the Forum “The Future of the Labor Market: New Opportunities” is held in Astana.
Kazakhstan has launched an initiative to provide a platform for dialogue between international experts and major employers and to identify common areas for development in shaping the future labor market for government agencies.
Below is an overview of leading international labor market organizations.
Today, the whole world is undergoing profound changes: technological, economic and social. As the Head of State noted in his Message “New Decade - New Economic Growth - New Opportunities”, the development of its main wealth, a human being, is the answer to global challenges and the key to success of Kazakhstan.
The issues of human capital development and the future development of the labor market are in the focus of attention of foreign countries and international organizations, such as the Organization for Economic Cooperation and Development, the World Bank, the World Economic Forum, the International Labor Organization, the Asian Development Bank.
The OECD report “Employment creation and regional economic development. Preparing for the work of the future ”of September 18, 2018, examines the impact of technological progress on regional and local labor markets. The report also presents the geographical distribution of the risk of automation and analyzes whether job losses are compensated for by the creation of jobs with less automation risk. It also addresses issues of flexible forms of employment, self-employment and the maximum inclusion of vulnerable groups in the labor market.
In early 2018, the World Bank released The Changing Nature of Work report for its World Development Report. The main focus is on the assessment and prospects for the impact of technology on the nature and nature of work in the future. The report calls on governments to ensure a universal, guaranteed minimum level of social protection. This can be done through reforms aimed at ending useless subsidies, improving labor market regulation, and revising tax policies.
The report “Future of Jobs” was published by the World Economic Forum on September 17, 2018. This report focuses on the fact that business, government, and workers must actively plan and implement a new vision of the global labor market. The WEF report lists major trends that will affect the future of jobs. These are modern technological innovations, accelerated introduction of modern robotic technologies. This report also predicts a significant change in the geographical distribution of production and value chains and notes the importance of retraining and the growing instability of the required skills.
The ILO Global Commission plans to publish a report on the future of the labor market on January 22, 2019, thereby marking the beginning of the organization’s centennial year. The report will outline the necessary steps to achieve a future labor market capable of ensuring decent and stable work in the context of rapid transformational changes in the world of work and employment. Relevant attention will be given to issues requiring timely solutions, such as youth employment, mismatch of qualifications, income inequality, informal employment, rural economy, the digital divide, and gender equality. The report will include a number of concrete proposals for a new, inclusive approach to economic growth and development, which will be aimed at changing priorities in global and national economic policies.
ADB published the Asian Development Outlook (Asian Development Outlook) entitled “How Technologies Affect Jobs” in April 2018. This document reveals how the increase in the number of jobs and technological changes will affect the labor market in the region. According to the ADB report, the economic feasibility of automation in many parts of Asia today is lagging behind, leaving aside the introduction of new labor-saving technologies, which slows down the process of shaping the labor market of the future. At the same time, a combination of technological progress and economic growth will lead to the emergence of new professions and industries, which will contribute to further employment growth.
Along with international organizations, individual countries are introducing new directions. For example, in Germany, employment 4.0 (Germ. 4.0) is a concept in which the future of jobs in Germany is discussed. The concept describes how jobs can change until 2030 under the influence of Industry 4.0 and dynamic digitalization. The concept was first introduced in November 2015 by the Federal Ministry of Labor and Social Affairs (FMLSA), entitled “Rethinking Employment: Green Book of Employment 4.0”. Employment 4.0 is characterized by a high degree of integration and cooperation, the use of digital technologies (for example, the Internet) and the growth of flexible forms of employment. Employment 4.0 drivers are digitalization, globalization, demographic change (aging, migration) and cultural change.
Thus, we are witnessing a global interest in the problems and opportunities of the future labor market. Kazakhstan, as a developing country with great labor potential, also shares the vision of the international community in view of the widespread influence of such trends.
The labor market is shrinking in OECD countries, but the number of unfilled vacancies is growing
This is stated in the annual report of the OECD Employment Outlook, which was published on July 4, 2018. This report covers labor market trends and prospects in OECD countries. This study focuses on specific aspects of the functioning of labor markets and policy implications for expanding and improving employment.
The picture of the labor market of OECD countries is still mixed in terms of quality and safety of workplaces, while the level of poverty has increased among the working-age population, reaching 10.6% in 2015 compared with 9.6% a decade earlier.
Today, the labor market is worried about the fact that the unprecedented stagnation of wages affects low-paid workers much more than those who work in high-paying jobs.
The labor market is shrinking and the number of vacancies is growing, which remain unfilled. The main reason is the slow growth in productivity. Although the reason for this slowdown is currently one of the most hotly debated issues in macroeconomics.
According to the OECD secretary, the decline in real wages while increasing labor productivity and employment emphasizes the need to assist workers, especially low-skilled ones, from the state. Targeted measures and closer cooperation with the social partners are needed in order to help workers adapt to the rapidly developing labor market.
Low inflation and increased productivity contributed to stagnant wages, as well as the growth of low-paying jobs. The report notes a reduction in the average wage of part-time workers compared with full-time workers. The above trend can also affect the reduction of unemployment benefits in many countries and the persistence of long-term unemployment. On average, in OECD countries, almost one in three job seekers receive unemployment benefits, and the long-term tendency to reduce benefits persists in many countries after the crisis.
Kazakhstan’s participation in the OECD project will help improve the quality of education
In 2017, the OECD invited Kazakhstan to join the OECD Skills Strategy project. It involves the Education Committee, the Labor Policy, and Social Affairs Committee, as well as the Working Group on Small and Medium-Sized Business.
There are separate projects with each of the committees, the main focus is on the field of education - PISA, and PIAAC. In 2019, for the first time, Kazakhstan will be included in the PIAAC report, which assesses the key skills of adults - literacy, arithmetic and problem-solving in a technologically rich environment.
This project is fully consistent with the instructions of the Head of State on the need to increase the human potential of the country, indicated in the message of January 10, 2018. Participation in the OECD Skills Strategy project will help the country adapt the education system to the needs of the new digitalization industrialization and increase the efficiency of the national labor market.
The result of the proposed project will be the development of a National Skills Development Strategy, for which the OECD proposes the following steps: mapping the skills system in Kazakhstan to better understand the institutions, policies and stakeholders that influence demand and supply of skills; identifying political priorities to help Kazakhstan orient investments in policies where it is most likely to improve skills outcomes; agreed policy; providing policy advice and identifying ways to support Kazakhstan in moving from diagnosis to action.
Until 2030, the labor force in developing countries of Asia will increase by about 11 million people per year
This is stated in the Development Bank of the Asian Development Bank called “How Technologies Affect Work,” published in April 2018. This paper focuses on how job growth and technological change, accompanied by unprecedented workflow automation and labor movement due to increased productivity, will impact the labor market in the Asian region.
The review describes that the economic feasibility of automation in many parts of Asia today lags behind the technological feasibility, leaving aside the introduction of the latest labor-saving technologies. While higher productivity will generate greater demand for new products and services, thereby balancing labor movement due to automation. Moreover, technical progress and economic growth will lead to the emergence of new professions and industries, which will contribute to further employment growth.
According to forecasts, in the period from 2015 to 2030, the labor force in developing countries of Asia will increase by about 11 million people per year. This means that Asia needs not only more jobs but also an improvement in their quality. Today, measures such as timely and sufficient investment in education, infrastructure, research, and development, as well as policies aimed at supporting macroeconomic stability, openness to trade and foreign direct investment, an investment climate conducive to business, are well known in solving employment problems. However, there are increasing doubts about the effectiveness of some measures to improve the labor market.