Disruption shakes the Nordic agreement model

The Coop supermarket chain transports many tonnes of goods every day, and some are being moved around by driverless forklift trucks. Coop’s headquarters in Albertslund near Copenhagen got a visit from Prime Minister Lars Løkke Rasmussen (The Liberal Party Venstre) and several other members from the government’s new Disruption Council as it met for the first time on 15 May 2017. Disruption has become a buzzword in Denmark for the changes brought on by technology.

The Disruption Council consists of the Prime Minister and a wide selection of government ministers, the social partners, business leaders and experts. The Council’s task is to find out how many new trends like digitalisation, robots and artificial intelligence can make Denmark richer and improve welfare – and at the same time find out how the Danes can safely face a future where many traditional jobs will disappear, including the jobs of forklift truck drivers.

It is too early to say which routes the Disruption Council will go down, but there will be a need for further education for workers who are losing their jobs as more working tasks can be solved without employees, said Prime Minister Lars Løkke Rasmussen as he watched a demonstration of Coop’s driverless forklift trucks:

“This technology brings a lot of good things. We avoid people getting worn out from monotonous repetitive movements, but of course when some working tasks disappear we need to find new ones. If you have trained to drive a forklift truck, and that truck suddenly becomes driverless, you have to do something else. You need further training to be able to perform a different working task,” said the Prime Minister.

Education, further training and retraining are also keywords in the new booklet ‘Forwards into the future’, which the Prime Minister has published to coincide with the Disruption Council’s first meeting.

Protecting the community

The Minister for Employment, Troels Lund Poulsen (The Liberal Party Venstre) and the President of LO-Denmark Lizette Risgaard also accompanied the Prime Minster during his visit at Coop. The LO President also sits on the Disruption Council and has written several opinion pieces about how she does not fear disruption will lead to technological mass unemployment. 

Yet she does consider disruption to be a challenge for the Danish labour market model, and points to the fact that nearly four in ten working tasks in the Danish labour market can be automated already. Postal workers represent one group which is threatened by disruption, says the LO President:

“They toil away conscientiously in an increasingly high tempo. Still their job is about to disappear. Because we are sending emails and texts rather than writing letters. This makes life easier for many people, but the postal workers are paying the price for that development.”

She believes offering a helping hand to people who do not benefit from new technological opportunities to be a central task for the Disruption Council:

“The community must give a helping hand to those left behind by the technological giant leaps. If not our society will disintegrate.”

More types of work

A Danish expert on the sharing economy and digitalisation, Anna Ilsøe, also predicts that the Danish and Nordic labour market models will come under increased pressure because of new trends. She is an associate professor and PhD at the Employment Relations Research Centre FAOS at the University of Copenhagen, and currently heads two research projects – one about the digitalisation of service work, the other about digital platforms.

“The structure of the labour market is changing. We are moving from a job economy to a gig economy, and this has major consequences. Many jobs will disappear and new ones will emerge, but many of these new jobs are less safe than we have been used to in the Nordic countries so far.”

She expects in the future more people will have part time jobs, be paid per gig or work both part time and do fee-based work on the side. The Nordic model needs to adapt to this, as it is now based on having a majority of the workforce working full time and saving for their retirement through a negotiated labour market pension scheme, while relying on state support during times of ill health or for child care.   

In the new gig economy, many will be insufficiently insured and expected to save up themselves for instance to cover periods of parental leave and for their retirement. In that scenario, new players will emerge to offer insurance solutions:

“If the social partners do not develop solutions themselves here, private players will. So we will for instance see insurance companies offer citizens products that will make their lives more secure,” says Anna Ilsøe.