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THE DIGITAL AGENDA
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immense manufacturing sector (which employs
millions of workers)?
It seems likely that the gradual automation
of processes will ultimately affect all industrial
activities, wherever they may be located, so
long as this is supported by an economic cost-
benefit analysis and is not prevented by legisla-
tion. The greatest and fastest impact will occur
where there is the greatest quantity of labour to
replace, and where manufacturing activity is
based on low salaries for unskilled tasks (which
are, therefore, more easily automated). Many
emerging countries are very aware of this threat.
What can we do in such a challenging
environment?
As with the previous revolutions, the fourth in-
dustrial revolution has the potential to raise
global incomes and to improve the quality of life
of the planet’s population. Until now, the big-
gest beneficiaries of change have been consum-
ers with access to the digital world: technology
has made possible new products and services
that increase the efficiency of their work and
allows them to enjoy their free time.
At the same time – as many economists have
noted – the revolution could generate more in-
equality as disruption extends to the labour
market. Because automation replaces human
work in the economy, the net displacement of
workers by machines could widen the gap be-
tween the return on capital and the return on
labour, and between the incomes of the rich
and those of the poor.
It is also possible that the displacement of
workers by technology could, overall, lead to a
net increase in more creative, better paid jobs
with shorter working hours, leaving more time
for leisure and culture. It is impossible to predict
with any certainty which scenario will prevail,
and history suggests that the outcome will be a
combination of both effects, with moments of
huge instability and occasional, local disruption
until the impact of the new technology has
spread and stabilised.
It seems very likely that technological devel-
opment will give rise to an increasingly segre-
gated labour market: one characterised by a
division between the skilled and the unskilled,
with corresponding differences in terms of in-
come and opportunities, leading to the gradual
erosion of the middle class under the threat of
automation. It goes without saying that this sce-
nario is both socially unstable and economically
inefficient.
This intensification of the segmentation of
wealth and opportunities will inevitably also be
reflected in differences between those countries
and regions that are at the vanguard of the
digital revolution, and those that prove unable
to adapt to the new situation. In this respect,
the priority for Europe is to focus all its efforts
on ensuring that our labour force – at every
level – is properly prepared, and that education
and training are given the priority they deserve.
Talent and knowledge will be key assets in the
competitive challenge that lies ahead.
Is the European Union ready to meet this
challenge?
The next few years will be decisive in determin-
ing whether the Europeans are to be global pro-
tagonists of the digital age or mere spectators.
Are we to be driving the train or will be stuck in
the caboose?
If our societies are to cope with the economic
and social challenges that lie ahead, we must make
a firm commitment to education, innovation and