Trade & Sector NewsThe future of manufacturing in Europe
- Macroeconomic modelling of the implementation of the Paris Climate Agreement estimates that GDP in the EU will increase by 1.1% and employment by 0.5% up to 2030. Manufacturing employment is projected to increase by 0.7%. While this scenario implies more jobs, mainly in areas such as construction, many of them are at the bottom and the middle of the wage and skills distribution.
- Macroeconomic estimates indicate that a further increase in global tariffs will have a more severe impact for jobs in the EU than in other parts of the world. They lead to a 0.3% fall in employment in the EU by 2030. Of all sectors, manufacturing sees the largest percentage decline, of 1.1%.
- Currently, the commercial application of the technologies studied is limited and mainly in highly productive firms. However, they can have a game-changing impact. The commonality of data processing suggests both an application in many sectors and, at some critical juncture, an acceleration of synergetic diffusion all along the supply chain of manufacturing production.
- The diffusion of advanced technologies may accentuate regional disparities within Member States, due to economies of scale and the high investment costs in advanced manufacturing, together with the need for a highly skilled workforce.
- Europeans are concerned about the negative impact of these technologies and there are numerous estimates of huge potential job losses. However, these predictions take little account of the economic rationale of the substitution of workers by machines or of the macroeconomic feasibility of the scale of capital investment implied by the estimates of job loss.
Since 2011, manufacturing employment growth has been in well-paid jobs requiring tertiary education. This trend will continue. The need for better literacy, information processing and problem-solving, even in blue-collar jobs, is driven not only by digitalisation but also by more quality control and standards. Despite a projected decline in physical tasks, dexterity will still be important, notably when operating machinery.
- New and higher skills are the most relevant labour market implication of advanced manufacturing. Newer skillsets, notably those of industrial data scientists, and data security analysts, will be in high demand. The most sought-after profile will be a combination of engineering and IT skills. Other often-mentioned skills include: creativity, communication, leadership and problem-solving.