Brave New World

That is precisely what a team around Pillars’ star Tommaso Ciarli has done. Tomasso and Ekaterina Prytkova, Fabien Petit, Deyu Li and Sugat Chaturvedi measured the exposure of industries and occupations to 40 digital technologies that have emerged over the past decade in order to investigate their effects on European employment. To do this, they used some of the very technologies that have come on stage lately, such as sentence transformers derived from natural language processing tools.

They applied these tools to text data from patents and standard European occupation classifications, an approach that has the advantage of being universal and not influenced by any specific European country. Furthermore, since their method does not rely on keywords (or tokens), it is replicable in other contexts, such as for green technologies.

The good news first. Among their main findings was that emerging digital technologies have an overall positive impact on regional employment-to-population ratios, meaning that they actually create more employment opportunities rather than destroy jobs. They found that a one-standard-deviation increase in regional exposure leads to a 1.069 percentage point change, corresponding to 2.1%, in the employment-to-population ratio from 2012 to 2019.

The less good news is that their research did not address the question of the quality of these employment opportunities (that would be a subject for further research). They did find considerable variability in the employment impact of these technologies, however. Clerical support workers, plant/machine operators, and assemblers are the most exposed to emerging digital technologies, followed, surprisingly, by high-paying occupations, including managers, professionals, and technicians. Other occupations benefited.

To highlight some examples: the technology families of Smart Mobility and HealthTech have a positive impact on employment, whereas E-Commerce exhibits a negative impact. A one-standard-deviation increase in regional exposure to SmartMobility results in a 0.62 percentage-point increase in the employment-to-population ratio. For HealthTech, this increase is 0.93 pp. Contrarywise, an equivalent increase in regional exposure to E-Commerce corresponds to a 1.54 pp decline in the employment-to-population ratio. In the same vein, the researchers quantified many more exposure-derived impacts on employment by technology, occupation, industry and region.

The best part is that they made all these pioneering data available as a user-friendly, open–access database, which they christened TechXposure. It offers an unprecedented level of detail in analysing the exposure of occupations and industries to emerging technologies, encompassing not only those frequently discussed in economic literature, such as robots and AI, but also less-studied ones like social networks, cloud technologies, and health technologies. (It will presumably be continuously updated, since it does not yet include the likes of ChatGPT).

This powerful tool for researchers and policymakers is but one of the contributions made to navigating current and future labour markets by the Ifo-led, CESifo-tinged Horizon 2020 Pillars project. Check it out.