1 Introduction
Technological development is a key process fueling changes in society and the economy. The Fourth Industrial Revolution is not only a continuation of the previous transformation processes brought about by technological development. For instance, production was automated in the Third Industrial Revolution with the power of computers and electronics, but the world maintained the same social relations and policies as before. In comparison, according to Klaus Schwab, the Fourth Industrial Revolution is different from three points of view, namely its speed, its breadth, and its overall impact (World Economic Forum, 2015). The overreaching impact of these transformations goes beyond the production process; they extend into the management, the work structure itself, and into the basic fabric of society. The sharing economy, the platform economy, as well as business models derived from the collection of data and automation, reshape industrial relations and challenge jobs. In this sense, these changes may be extensive, but they are not entirely positive.
Additionally, they require a concerted approach, which is difficult to attain. States have different interests and may enact different public policies to help mitigate the difficulties and to foster technological development. Therefore international organizations, due to their scope and activity, could address the challenges related to digitalization via the provision of global public goods (GPG s). Sustainable Development Goal (SDG) 9, entitled “Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation,” also focuses on the provision of GPG s. Within this goal eight targets were specified (United Nations, n.d.). The international organizations by providing GPG s respond to this development goal and enable their member countries to cope with the challenges related to digitalization which are of multidimensional nature.
The purpose of this chapter is to investigate the role of international organizations in influencing and channeling the processes of transformation in
2 Theoretical Framework
This section provides a theoretical framework for the empirical analysis on the role of international organizations in the digitalization processes in society and the economy. It starts from a simple question to establish a clear conceptual framework: Do we discuss digitization, digitalization, or digital transformation? Then, it ties digital transformation with automation, so that it can specify the challenges with which society and the economy are confronted.
The discussion regarding digital transformation is founded on the concept of the Fourth Industrial Revolution or Industry 4.0. It refers to a change in the production system, not only in the sense that technology is upgraded, but that “real and virtual” systems work together without too much human supervision (World Economic Forum, 2015). These are called cyber-physical systems, as they blend data and technology with machines. The Fourth Industrial Revolution is not a revolution of the machines; it is the result of decisions made by the people developing the technology guided by the purposes they aim to achieve (DeNardis, 2020). Productivity increase is one such purpose. There is an intertwining between the designers of these technologies and governments, which aim to deploy resources to help boost these gains. At the same time, these governments must also take into consideration another side of this effort, namely, the unavoidable changes in labor and education. Considering this, we should not only talk about digitalization, but also about digital transformation, because the digital systems blend with the physical objects. Hence, actions do not take place only in the digital sphere.
Digitization, digitalization, and digital transformation are catch-all terms that have gained attention in public discourse in recent years. In the EU, the current digital transition discourse, and the post-pandemic recovery with the help
Larsson also notices the misuse of the terms in public discourse, and emphasizes the broader outlook of digital transformation, which requires several transformative processes within the entity. He also states that digitalization and digital transformation can be used interchangeably to analyze the core changes happening in society (Larsson & Teigland, 2019, p. 3). Other studies also agree that digital transformation represents an evolution in terms of ICT-enabled transformation, focused both on the significant changes brought about by ICT, but also on the expected means of action that are necessary to channel these changes for the better (Majchrzak et al., 2016). At the same time, Van der Zande et al. (2019) clarify the differences between the three concepts and use “digital transformation” to describe the wider effects of digitalization on society.
Regardless of the terminological overlap, the various definitions of digital transformation can offer significant insights into its effects in society and the economy (Majchrzak et al., 2016). While most definitions focus on the internet underpinning this process, they also delve into the challenges that digital transformation creates. For instance, Bowersox et al. (2005) focus on the idea that digital transformation is a process by which businesses reinvent themselves, as well as re-energize themselves by using technology in their supply chain management. In a similar manner, other authors focus on the idea of the evolution of an entity, in line with the technological revolution (Mazzone, 2014). Mazzone deliberately emphasizes the idea that it is an ongoing process, hence it requires constant and conscious adaptation to the wave of technology.
The conscious and ongoing effort of an entity to integrate information and communication technologies (ICT s) in growing facets of its activity by taking advantage of the process of data collection and analysis enabled by technology, as well as of emerging technologies, to facilitate its activity and balanced functioning.
This definition balances between the improvements in terms of efficiency and optimization that ICT can bring about and the need for conscious actions to mitigate the challenges that it creates. In short, it strives for a societal approach to digital transformation.
While most of the literature on digital transformation stems from a business perspective, a social science perspective is also required to understand the effects of technology in society and the economy. In this sense, Salento (2018) criticizes the mainstream interpretation that digital transformation is deterministic and will bring about only positive change. He points to the popular idea from public discourse that the negative effects of digital transformation will be offset by new opportunities, especially on the labor market. In this sense, the key concept from the definition provided above is “balanced functioning”, since digital transformation should be conceptualized as a process by which actors and entities strive not only for efficiency and optimization, but also for better quality of life. In this sense, according to Salento (2018), digital transformation can also be a threat to citizens.
A complementary process adds to the challenges of digital transformation, namely automation, the process by which technology replaces humans from performing routine and non-routine tasks. To round up the theoretical discussion surrounding the effects of technology in society and the economy, automation needs to be conceptualized, as well.
This brief theoretical framework has explored the potential of automation, digitalization, and digital transformation to challenge existing socioeconomic relations. The next section delves deeper into their effects into society and the economy, by mapping the transformations triggered, as well as the predictions for the future.
3 Contextual Framework: Challenges to Society and the Economy
Based on the theoretical framework presented above, this section deals with the challenges brought about by digital transformation, digitalization, and automation. It approaches this discussion in two manners. Based on the literature review, it maps the transformations that are already underway. The section provides conceptual clarity and serves as a bridge towards the discussion on the role of international organizations in channeling processes of digitalization in society and the economy.
3.1 Transformations in the Labor Market
This subsection analyzes the current labor market trends influenced by digitalization. It focuses on the job perspectives affected by automation, but also by platformization. Platformization refers to the process by which digital platforms penetrate significant infrastructures, social relations, and institutions, causing substantial changes in a variety of sector (Poell et al., 2019). It also penetrates the world of work and has contributed to the development
Along with digitalization and digital transformation, automation is also included in the wide domain of research entitled “future of work,” since it significantly impacts the labor market and, with it, education, and social relations. Several studies have analyzed these effects, with varying degrees of optimism regarding the effects of automation and digital transformation in society and the economy. One of the landmark studies regarding the potential of automation to displace jobs is Acemoglu and Restrepo (2018), who adopt a task-based approach meant to quantify more clearly the potential for job disruption in the American economy. They conclude that the replacement of humans with machines reduces the demand for labor, as well as wages and overall unemployment. At the same time, production costs will decrease, leading to more automation. Nevertheless, they maintain an optimistic perspective by emphasizing the potential of automation to create new tasks and, hence, new skills.
Van der Zande et al. (2019) use a similar task-based approach to map the changes brought by automation in tandem with the categorization of human capabilities in the workplace. They stress the idea that the more complex and non-routine a task is, the more difficult it is for an automated system to perform it. Van der Zande et al. (2019) illustrate this idea with the example of natural language processing, which is developed, but has not reached human-like potential. Other examples include the capacity to recognize human emotions or fine motor skills. While certain tasks have been replaced by machines, there is no clear consensus regarding the complete elimination of jobs that require complex human thinking, according to Van der Zande et al. (2019). The task-based approach in relation to the impact of digital transformation on the labor market opens the door not necessarily to the elimination of jobs, but to their transformation. Indeed, there is a trend towards more human – machine interaction in manufacturing or other industries rather than the complete elimination of jobs (Acemoglu & Restrepo, 2019).
In this sense, the policy trend is to invest in reskilling and upskilling, considering integration of technology into the world of work. Schmidpeter and Winter-Ebmer (2021) have analyzed the relation between risk of automation and probability that the displaced workers find new job opportunities. Often, job seekers must shift sectors to find employment. They conclude that the higher the risk for automation, the more difficult is for workers to find new opportunities. They also assess the potential of training policies for the mitigation of these adverse effects and find that labor market training is significant in boosting chances for re-employment for those who have been displaced by automation.
Another effect of automation and digitalization relates to the polarization of the labor market, with a reported decrease of the share of mid-sector jobs
The decline of the middle-class sector can be seen in tandem with another trend observed by researchers, namely reshoring. Reshoring is the opposite process to offshoring and it refers to the return of production back to the more developed countries, but the processes are not symmetrical. Reshoring can take place when automated manufacturing returns to the original production sites, but requiring fewer employees with a higher skill set. Research argues that reshoring is still a limited occurrence and may just be anecdotal (De Backer et al., 2016). Nevertheless, growing discussions around “taking back control” over global supply chains are poised to reignite the debate on bringing jobs back.
The second trend related to digitalization is the so-called “platformization”. This trend has resulted in significant changes in the labor market as well. With the advent of platforms and the gig economy, the traditional model of the employer – employee relationship has shifted. Employees become collaborators or self-employed persons who find work using digital platforms.
Although the narrative of these platforms focused on the flexible worker experience, the reality is different. Protests by taxi drivers in Barcelona against Uber, accusations of surveillance by other platform workers, or the lack of willingness to ensure basic social rights to gig workers have reignited the debate over the gig economy and the role that such platforms should assume. They face regulation both at a national and at a European level to mitigate the side effects of a technological change that is meant to make workers more flexible, but which can also be destructive to social rights. The European Union is stepping up its efforts; its intervention will be analyzed in the section dedicated to international organizations.
3.2 Transformations in Education
Education is also affected by digitalization, not only with the way technology can improve teaching and students’ experiences, but also with transformations to the curriculum and to adult training with consequences on the labor market and in the economy. We focus on three aspects: digital inclusion, skills, and training.
Firstly, the literature on digital inclusion provides interesting insights into the changes brought about by digitalization for the education system. Digital inclusion research stresses the significance of a layered approach to integration in the new digital society, starting from building motivation, continuing with providing access, building skills, and culminating with usage of technologies (Van Dijk, 2005).
Secondly, digitalization influences what students should learn because it creates the need for new skills. Additionally, the educational sector should support the development of a proper workforce. The discussion above related to reskilling and upskilling is significant here as well. Symeonidis et al. (2021) analyze the EU discourse with regards to education policy and find a strong connection between digital transformation and a developing discourse on reskilling and upskilling the European workforce. The lifelong learning approach is at the forefront of these efforts, since these two terms relate especially to adult training rather than to the traditional education sector. Indeed, research shows that labor market training plays a role in mitigating some of the effects of automation (Schmidpeter & Winter-Ebmer, 2021). Companies, as well as the education system, should adapt to the new requirements in the economy and to the innovative technologies and create agile teaching programs aimed at teaching hard IT skills necessary for working with machines, artificial intelligence, or with big data, as well soft skills.
Thirdly, the Future of Jobs report released by the World Economic Forum illustrates the urgency for rethinking education and training, considering the “double disruption” trend that describes the displacement of jobs by the pandemic and by digital transformation (World Economic Forum, 2020). The report argues that job destruction has surpassed job creation, considering the accelerated pace of digitalization in the wake of the pandemic. This has a double effect on the education sector, considering that it will render some specializations obsolete, but it will also pressure the institutions to adapt, to reskill trainers, and to deliver updated content.
4 The Role of International Organizations: the ILO and the EU
The challenges brought about by the processes described in the previous section require multiple interventions by a variety of actors in light of their widespread effects. Considering that technology knows no borders, efforts should
4.1 The Role of the ILO in Promoting Mechanisms to Respond to Digital Challenges
The processes of digitalization and digital transformation affect workers and different social groups, causing some to be excluded from the labor market, which may contribute to increasing socioeconomic inequalities. The challenges of digitalization have been reconsidered and addressed by recently adopted policies, programs, and activities of international organizations.
Two organizations and their activities are noteworthy: the International Labour Organization and the European Union. They have adopted diverse policy agendas and actions in order, on the one hand, to meet the challenges and seize the opportunities presented by digitalization processes and, on the other, to counter the risks that can inevitably be observed. This is also due to the specificity of the mentioned organizations that provide public goods. Global public goods are “thought and action on common concerns that affect a substantial proportion of humanity” (Sagasti & Bezanson, 2001, p. i). However, as was stressed in Chapter 1, there are public goods with benefits that are not limited to national borders but extend the border of one country. A distinction can be made between core and complementary activities, where core activities refer to all activities that produce international public goods, while complementary activities are prepared by countries “for consumption” of international public goods (World Bank, 2001, p. 110, after Sagasti & Bezanson, 2001, p. 22).
4.2 Role of the ILO
The International Labour Organization (ILO) provides global public good by easing the transition of people to the future of work and facilitating the acquisition of skills, competencies, and qualifications to cope with the challenges of digitization. Today an agency of the United Nations based in Geneva, the ILO was originally created in 1919 as an organization of representatives of three
The ILO operates through the following bodies, which include the three parties mentioned above: the International Labour Conference or the General Conference, meeting annually in Geneva, which is also a forum for discussion, held at least once a year; the Governing Body, which is the executive council of the ILO, responsible for ILO policy, program, and budget; and the International Labour Office, which is the permanent secretariat of this organization and with a director general appointed by the Governing Body. The work of the ILO is supported by tripartite commissions and committees of experts (ILO, n.d.-d; ILO, n.d.-g, Article 2–8). This organization has some instruments at its disposal.
In its daily activities, the International Labour Conference adopts the following instruments: conventions, recommendations, and others, such as declarations (of wide application). The following declarations (which were also updated) were adopted: the Philadelphia Declaration on the Aims and Objectives of the ILO (1944), the Declaration on the “Apartheid” Policy of South Africa (1964), the Declaration on Gender Equality, the ILO Declaration on Fundamental Principles and Rights at Work (1998), the Declaration on Social Justice for a Just Globalization (2008), and the relatively recent Centenary Declaration for the Future of Work (ILO, n.d.-f) adopted in 2019, which is of great importance for further considerations in this chapter.
The Declaration for the Future of Work (hereafter referred to as the Declaration) was adopted at the International Labour Conference held in Geneva during the 108th session of the ILO. It affirmed that there has been a transformational change regarding the “world of work”, which is driven by, among other things, technological innovation, and persistent inequalities, which will affect the future of work. The primary areas of action envisaged by the Declaration relate to investments in people’s capabilities, in work institutions, and in decent and sustainable work (ILO, n.d.-f).
The Declaration indicated that ILO efforts must ensure the transition to the future of work, harness the potential of technological progress, and stimulate
However, the pandemic has created new circumstances for the world of work. The pandemic, as highlighted by the ILO, has caused significant changes related to the world of work, namely technological change, alongside environmental sustainability, or demographic change. During the COVID-19 pandemic, the digitalization of work accelerated, and remote working was introduced, but it was not a trend. Some people have been unable to take full advantage of this phenomenon. The reasons for this situation are due to the nature of work or connectivity problems. The dramatic situation caused by the COVID-19 pandemic was reflected in the labor market figures, as the global number of working hours in 2020 fell by about 9 percent compared to 2019 (through the last quarter), representing a loss of 255 million full-time jobs (ILO, 2021c, pp. 10, 7). Thus, the pandemic has accelerated the process of digitalization, which inevitably affects people at work and work organization.
The transformational changes observed inevitably affect the world of work and required the development of skills adapted to the needs of the labor market, with a particular focus on digital skills. Therefore, the role of the ILO in this area is to (a) support the development of skills policies and systems to meet the demands of the labor market, (b) create relevant competencies that are required for future jobs, and (c) promote the social inclusion of disadvantaged groups through skills development (ILO, n.d.-k).
The aforementioned activities are implemented in collaboration with member countries, where the ILO has a supportive role in policy planning, governance, as well as regulation. Referring to one of the key activities focusing on strengthening skills policies and systems in member countries, the ILO is collaborating in skills systems on improving planning and governance policies. This cooperation is also aimed at greater involvement of workers’ and employers’ organizations in skills development and improving the quality of skills to promote socioeconomic development. To achieve this, research is conducted, and technical assistance is offered. ILO activities in this area include digitizing
The importance of digitalization has been recognized by the ILO and its Skills Branch, whose work examines the impact on TVET and skills systems that leverage technologies, and supports greater commitment to digital transformation, digital inclusion, and bridging the digital divide (ILO, n.d.-a). There are some research initiatives dedicated to digitalization. One example is the project “Digitalization, the Future of Work and the Teaching Profession,” which commenced in November 2019 (through December 2021). Carried out by the ILO and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the project examines the impact of digital technologies on the primary and secondary educational systems of a range of countries and includes a coronavirus and digitalization perspective on teaching and education. The countries analyzed were Ethiopia, Kenya, Malawi, Rwanda, and the United Republic of Tanzania. It was highlighted that these countries are making efforts to use technology to improve the quality of teaching and learning, although these efforts are rather diverse. Some measures aimed to ensure access to quality digital education services while others designed policies to guide digitalization in education, increase investment in digital technologies, develop digital skills of teachers, ensure decent working conditions for teachers, and improve social dialogue (ILO, n.d.-b; ILO, 2021b).
To create the right skills required by the labor market, a strategy for skills anticipation must be developed. Therefore, the ILO is working on “Skills Strategies for Future Labour Markets,”, both in terms of research on the adaptation of skills to future labor markets and by providing technical assistance relating to knowledge and tools for skills anticipation (ILO, n.d.-k). This work focuses, among other things, on skills related to technological change, meaning that technological change makes it necessary to change skills, retrain them or upgrade them because they are sometimes outdated. Two aspects of their activity were identified: (a) technological change skills, which refers to a focus on the demand for digital skills, as well as other skills and digitalization, and (b) technological skills foresight (STF),which focuses on collaborative skills anticipation, primarily at the sector level and working with sector stakeholders (ILO, n.d.-j). Society should adapt to these changes because “digital transformation not only means that some jobs disappear, but also that the vast majority of the existing work tasks with traditional jobs will be modified” (ILO, 2021a, p. 9). For instance, the Training for Rural Economic Empowerment (TREE) program,
Another area of ILO work includes activities aimed at improving the labor market and the quality of work for disadvantaged groups, including women, youth, migrants, refugees, and rural workers, as well as activities aimed at establishing TVET systems and active labor market programs, which are the focus of the ILO activity (ILO, n.d.-i). By promoting the development of right skills required by the market in the face of digitalization, the activities undertaken by ILO contribute also to SDG 9, where promotion of inclusive and sustainable industrialization is underlined.
4.3 The Role of the EU in Promoting Mechanisms Related to Digital Challenges
4.3.1 A Common Online Market Tackling Digital Challenges
As underlined, digitalization brings about some opportunities for EU countries and their regions, for citizens and businesses. However, there are certain groups of European citizens and entities/actors who may be excluded from the digital market. The creation of a Digital Single Market, which aims to remove barriers to online transactions in the EU, enables the potential of digitalization, and, by promoting digital skills and learning related to digitalization, all European citizens should be able to benefit from this process. It can be argued that the creation of the Digital Single Market by the EU provides global public goods, including a legal framework and mechanisms for adoption. Financial support from the EU will support the efficient implementation of the Digital Single Market. Thus, the multidimensional benefits provided by this market cover the EU, but extend even beyond it, thus fulfilling the Sustainable Development Goal 9.
The Digital Single Market is a market where the free movement of factors of production is ensured “where individuals and businesses can seamlessly access and exercise online activities under conditions of fair competition, and a high level of consumer and personal data protection, irrespective of their nationality or place of residence”. (European Commission, 2015, p. 3). The Digital Single Market Strategy consists of the following three pillars:
- –“Better access for consumers and businesses to online goods and services across Europe.”
- –“Creating the right conditions for digital networks and services to flourish.”
- –“Maximizing the growth potential of our European Digital Economy.”
The first pillar of the strategy focuses on removing barriers to cross-border online activity. The main proposals regard the creation of an appropriate
The second pillar refers to promoting high-speed networks and services that protect consumers and ensure privacy and data protection. The proposed actions in this pillar include aligning telecommunications laws and providing a regulatory framework for telecommunications, as well as a regulatory framework for media, platforms, and intermediaries, and ensuring the security of digital services, personal data, and privacy.
The third pillar promotes big data, cloud services, and the Internet of Things, which are key issues for EU competitiveness, promoting interoperability and standardization. The Digital Single Market should be inclusive by promoting digital skills; it can benefit not only from e-services, but also e-government, e-justice, e-health, e-energy, or e-transport (European Commission, 2015). The growing pace of regulations and directives proposed and discussed within the European Union is a testament to the idea that there is consensus at the member state level regarding the idea that a European governance umbrella is required for mitigating the risks of digitalization and channeling its potential.
On June 20, 2019, the European Council agreed on “A new strategic agenda 2019–2024” for a five-year period identifying four priorities, also important as a direction for the institution (European Council, n.d.). “The development of a strong and vibrant economic base” was identified as a priority. The document emphasizes that digital transformation will develop and address infrastructure, connectivity, services, data, regulation, and investment. All aspects of the digital revolution and artificial intelligence should be taken into consideration (European Council, 2019).
These have been translated into policy priorities for the European Commission for 2019–2024 and the following six priorities have been defined: “A European Green Deal, an economy that works for people, a Europe fit for the digital age, protecting our European way of life, a stronger Europe in the world, a new push for European democracy” (European Commission, 2019, p. 4).
4.3.2 Tackling Societal Challenges Brought by Digital Transformation
The focus of European policymaking has shifted from economic to societal challenges related to digital transformation. The priority of “a Europe fit for the digital age” underlines that Europe should seize the opportunities of the digital age, highlighting the role of digital technologies, including artificial
The objectives are specified in detail, namely they refer to “technology that works for people, a fair and competitive economy and open, democratic and sustainable society” (European Commission, 2020). The March 2021 Digital Compass provides a vision for 2030 in terms of key milestones and measures that are being used to achieve clearly defined goals. As underlined in the document, digital ambitions are translated into targets and an improved monitoring system that will include milestones and cardinal points. These points refer to a digitally skilled population and digital professionals, secure and sustainable digital infrastructure, digital transformation of businesses, and, finally, digitalization of public services (European Commission, 2020).
[T]he Commission wants a European society powered by digital solutions that are strongly rooted in our common values, and that enrich the lives of all of us: people must have the opportunity to develop personally, to choose freely and safely, to engage in society, regardless of their age, gender or professional background. (European Commission, 2020)
This vision clearly mirrors the theoretical discussions in the previous section on the societal impact that digital transformation has. In this vision, digital solutions are shaped around European values and European society and not the other way around, pointing away from the deterministic, mainstream vision that Salento (2018) criticizes. This is also evident in the priorities that the strategy discusses. Technology serves socioeconomic relations and not the reverse.
- –Developing gigabit connectivity by means of action plans for 5G and 6G, revisions of the Broadband Cost Reduction Directive and other initiatives to boost connectivity
- –The Digital Education Action Plan, “to boost literacy and competences at all levels of education”
- –An updated Skills Agenda, as well as a “reinforced Youth Guarantee to put a strong focus on digital skills in early career transitions”
- –Regulatory initiatives for platform workers
- –The Digital Services Act and Digital Markets Act (European Commission, 2020)
At the same time, the societal orientation of digital transformation in the EU is evident also in the Digital Compass Communication. The document crystallizes the European vision for a digital society as follows: “The European way to a digitalised economy and society is about solidarity, prosperity, and sustainability, anchored in empowerment of its citizens and businesses, ensuring the security and resilience of its digital ecosystem and supply chains” (European Commission, 2021e). Additionally, this vision is distilled into four cardinal points that map out the next decade:
- –A digitally skilled population and highly skilled digital professionals
- –Secure and sustainable digital infrastructures
- –Digital transformation of businesses
- –Digitisation of public services (European Commission, 2021e)
Moreover, the document also contains a list of digital principles that are the cornerstone of the European digital society, namely:
- –Universal Access to internet services
- –A secure and trusted online environment
- –Universal digital education and skills for people to take an active part in society and in democratic processes
- –Access to digital systems and devices that respect the environment
- –Accessible and human-centric digital public services and administration
- –Ethical principles for human centric algorithms
- –Protecting and empowering children in the online space
- –Access to digital health services (European Commission, 2021e)
The strategy of the European Union does not stop at promoting best practices or encouraging common standards, but it focuses on shaping the socioeconomic relations in the digital society of the future. It does so in two ways: by providing regulatory frameworks for the digital challenges and by providing a
The platform economy, also known as the gig economy or the sharing economy, has been one of the major disruptors of social relations in the digital sphere. From food delivery to freelancing, major platforms have become marketplaces for work in the European Union. The EU estimates that approximately 28 million Europeans work in the platform economy with a steady growth potential. According to the accompanying Communication on better working conditions in the platform economy, platforms are indeed effective in matching supply and demand for labor, thus offering numerous opportunities for work, while challenging the traditional labor model. However, the Communication also emphasizes that this new model has the potential to undermine the European social model (European Commission, 2021b). The challenges stem from the fact that platform work “does not automatically translate into quality jobs” (European Commission, 2021b). Additionally, the Commission states some of the challenges that platform workers face in this disrupted labor market:
- –Difficult working conditions
- –Ambiguity regarding the status of workers
- –Limited access to rights and protections associated with the worker status
- –Challenges related to surveillance, mismanagement of data, equality, and potential algorithmic discrimination
- –Lack of transparency and predictability of contractual arrangements to health and safety challenges
- –Limited social dialogue
Taking these difficulties into consideration, the solution proposed by the Commission in the form of a directive aims to clarify the employment status of platform workers and to build a solid framework for their protection against the potential challenges mentioned above. In terms of employment, the directive creates a set of criteria that will determine whether one such platform classifies as an employer. If this happens, then the people involved in contractual relations with that platform will automatically be classified as workers. Once the workers attain this status, they are entitled to a set of rights, such as the “right to a minimum wage, collective bargaining, working time and health protection, the right to paid leave or improved access to protection against work accidents, unemployment and sickness benefits, as well as contributory old-age pensions” (European Commission, 2021c). Platforms will also have a right to dispute this classification, but they must prove that “there is no employment
The situation of this proposed legal framework is rather peculiar, considering the limited social policy competences that the EU has. At the same time, it is also a perfect example of the idea that international organizations, such as the EU, can offer a governance umbrella for their member states because it does not aim to change the existing social policy mechanisms from the national level. It rather focuses on a wide set of rules that are applicable in every member state and are neutral from a legislative point of view, given that it creates a legal framework where many member states do not have one yet. It intervenes in an area that has not been completely covered by national legislation, while respecting the existing social rules at the national level.
For instance, the set of rights that workers may enjoy once their status is recognized is the right to minimum wage, a notoriously contentious issue in the EU nowadays. However, the right is only valid where it is applicable under the national law. Indeed, the proposed directive cites the support competence of the EU to provide a framework for worker protection, by setting a set of minimum standards and, at the same time, by abstaining from “imposing administrative, financial and legal constraints” (European Commission, 2021d).
The second example that aims to illustrate the role of the EU in channeling the processes of digital transformation in society and the economy refers to its constant push towards the improvement of citizens’ digital skills. While the previous example focused on a proposal for legislation that would become hard law, the EU Skills Agenda is classified as soft law, a set of policy initiatives spearheaded by the Commission in tandem with the member states and other stakeholders.
If we refer to the principles set within the Digital Decade and the Digital Compass, we observe that the first cardinal point relates to the digital skills of Europeans. At the same time, the Resilience and Recovery Framework (RRF) incentivizes member states to upskill and reskill their citizens to adapt to digital transformation. In fact, one of the seven major priorities of the RRF refers to reskilling and upskilling, both in terms of adult education, as well as in the education system that needs upgrading to the new requirements of the labor market (European Commission, 2021a). Yet again, the Commission has no direct competences with relation to the national education systems, but it does create yet another framework by which it incentivizes member states to act. In terms of reskilling and upskilling, the financial assistance by means of the RRF pushes member states to create their own programs, which are adapted to the national specificities.
The main objective of this chapter has been to highlight the role that international organizations play in developing policies for the challenges brought about by digitalization in society and the economy. The chapter starts with short overview of the theoretical framework of digitialization. It further assesses the contextual impact of digitalization on the world of work and education, being the basis for the analysis of the activities of international organizations. Labour market polarization, changes in the educational system due to the requirement of new skills on the labor market, or platformization are the main effects that digital technologies have on society and the economy. These challenges are inherently transnational, and they require transnational policies.
Within this context, the chapter analyzed the activity of the ILO and of the EU. On the one hand, the ILO has a global outreach due to its statute as a UN agency. On the other, the EU is a regional integration project, but its legislation and policies echo across its borders and it can influence other jurisdictions as well.
Both organizations stress the need for a human-centered digitalization, but they have different angles to tackle this problem. The ILO cooperates with member states and organizes programs and projects, but its policies are not mandatory. The European Union, by virtue of its organization and logic, can issue legislation that is binding for the member states and its policies have the possibility to shape global trends as well. Data protection legislation is one example of a legal framework that the EU leveraged globally. Moreover, with its current strategy, the EU focuses on values at the foundation of digital transformation and aims to lead by example globally.
Both organizations’ steering activities are essential for developing strong policies as answers to significant changes in society and the economy that digital transformation causes, especially because this process is ongoing.
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