The Nordics could take a digital lead – with the right measures

The Nordic region could be a digital leader and create more or less the same number of jobs as those that will disappear when robots and automation start taking over more and more working tasks. But that depends on the Nordic governments paving the way, and they need to start now, says Jens Riis Andersen, junior partner at the management consulting firm McKinsey, which has written a report on the effects of automation on the labour market on behalf of the Danish government. Riis Andersen presented the report’s conclusions during a Nordic conference in Stockholm on 15th May 2018:  

Jens Riis Andersen, McKinsey. Photo: Björn Lindahl

“In the Nordic region we have a very strong starting point for becoming digital leaders, and our estimates show that new jobs can be created at around the same pace as we lose jobs because of the automation of many working tasks. But new jobs depend on employees in the Nordic labour market having the necessary skills,” he said.

Nordic skills in the lead

As part of the report, McKinsey has developed a skills index by comparing knowledge from a range of surveys of the skills level in many different European countries – for instance digital skills, problem solving abilities and social skills. Nordic employees top this skills index. 

As a result, the Nordic region enjoys a unique advantage, and if this advantage gets support, the Nordic region can become or remain a digital leader. But two types of political measures are particularly needed, reckons McKinsey: The labour force must be educated for this, and a political framework must be created in order to stimulate the development of new technology-driven jobs. 

Start now

The Nordic governments need to start this work right away, or risk losing their digital head start, Jens Riis Andersen told the conference ‘Shaping the Future of Work in the Nordic Countries – the impact of technological development on work and skills’, which was organised by the Nordic Council of Ministers.

The McKinsey report’s conclusions have been discussed by the Disruption Council, a forum for dialogue established by the Danish government, comprising a range of government ministries and the social partners, business leaders and artists. Among the issues discussed there is how Denmark prepares its education system for a labour market increasingly influenced by robot technology, automation and digitalisation.

About the McKinsey report

‘The effect of automation on the Danish labour market’ was written in 2017 for the Danish government and the Disruption council. Some of its conclusions are:

• Automation technology first and foremost creates opportunities. The technology can create the basis for continuing support of high living standards, improved products and services and more competitive companies. The starting point for exploring the opportunities is strong. Nordic societies are more digital than most, the labour force is highly educated, the labour market is flexible and people are positively inclined to new technology. 
• Exploring the technological opportunities will demand a marked shift across society. Nearly all people in work must learn new skills, some must find new jobs and companies will have to navigate through ‘disruptive’ market dynamics across classical trade divisions.
• Some workers will find the transition difficult: Many of their working tasks can be automated, and they cannot easily move to different jobs. 
• Some four out of ten working hours can be automated by existing technology.
• Machines and robots can take over both physical and some cognitive tasks, including searching for information, online customer service and simple case handling. This will lead to the loss of many jobs. 250,000-300,000 Danes can be affected by 2030.
• The number of jobs that will disappear is approximately the same as the number of new jobs that can be created. There will also be a need for employees to develop and control the robots. In addition to this, a range of new jobs will emerge as a result of the technological development and the increased productivity this creates.
• The need for IT specialists and others with strong digital skills will increase in coming years.
• All students in upper secondary education should to a greater extent than today secure basic digital skills and an understanding of new technology. 
• Robots and artificial intelligence (AI) can lead to growth in the Nordic region without creating more unemployment – but rapid political action is needed, according to the management consulting firm McKinsey.