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Digitalisation of work

At a glance

Automation and digitalisation are expected to cost many jobs, but there will also be entirely new, digital professions. Today, thousands of people are already finding work on digital platforms.

The digitalisation of work affords developing nations in particular many opportunities. It provides new sources of income for specialists, while new markets in remote and disadvantaged regions have the potential to forge new connections. But there are also risks inherent in the digital transformation – developing markets often lack access to global digital markets, have a shortage of experience, and lack the regulatory standards for global competitiveness.

To prepare the local population for the impacts of digitalisation, targeted educational and training activities should be provided within those markets jointly with the private sector. New forms of technology transfer will also enable German development partnerships to lay the proper foundations needed to increase employment in partner countries, compensate for job losses and support international collaboration in the digital sector.

Several people on a motorcycle in Rwanda

Fairwork – fair working conditions on digital platforms

To minimise the negative impact of digital platform economies on employees in developing nations, fair working conditions are required. This is why the Federal Ministry for Economic Cooperation and Development has established the “Fairwork Foundation” jointly with the Oxford Internet Institute.

Which topics will be relevant for the German development partnerships in the coming decades?

The digitalisation and automation of work poses many questions that the development partnership is called to answer. But where lies the boundary between scepticism and hope? Which topics will be relevant for the German development partnerships in the coming decades? 

Which specific developments are expected on the job markets?

Modern information and communication technologies (mobile telephones, internet) have also created new opportunities for income and work in low-wage countries, especially in relation to financial services (mobile payment systems) and agriculture (consulting and market information). Women benefit from this too. How automation will diminish the opportunities for low-wage countries to attract work-intensive export industries such as the textile and clothing industry remains to be seen. However, there are still technological limits to automation, and that includes the clothing industry. There are also industries (such as the agricultural industry) that require commodities held by low-wage countries, putting them at a geographical advantage beyond the mere low cost of labour. In many low-wage countries, demographic and economic change has also resulted in the development of a growing middle class with greater purchasing power, creating an internal market that is becoming increasingly appealing and in which local providers enjoy a comparative advantage due to their good knowledge of consumer preferences and their lower transport costs.

Digital change offers new work opportunities in the digital economy (IT sourcing, platform economies, etc.), but digitalisation can also exacerbate inequality – women in particular are at risk of being left behind by the digital trend. A lack of basic literacy and poor skills in the use of new technologies are obstacles in this regard. Not only that, but matters such as the handling of privacy and data security are underdeveloped in many cases.

The global digital economy creates new sources of income for specialists and markets in remote and disadvantaged regions. Mid-income countries, however, are often lacking adequate market access and the necessary experience and quality standards to be competitive on a global scale.

Emerging markets are in a unique position to benefit from digital change. However, it is necessary to reduce the digital divide – between the urban and rural spaces, between the old and the young, and between the sexes. Not only that, but matters such as the handling of privacy and data security are underdeveloped in many cases. Overall, many places lack the necessary infrastructure and digital know-how for the rural populace to even make use of digital applications in the first place, let alone benefit from them. Digital skills and qualifications are essential for women and girls to have better opportunities and greater access in an increasingly digital world.

The Federal Government expects the following specific developments for these economic sectors: