According to analyst firm Forrester Research, 12 million jobs will be lost across Europe by 2040 due to automation technologies.
As the pandemic increases adoption of digital technologies in business, the region is predicted to embrace automation to address its demographic challenges, the analyst said in a new report. By 2050, the five leading economies in Europe – France, Germany, Italy, Spain and the UK – are expected to have 30 million fewer people of working age.
The report also noted that investments in automation will become crucial to the way European governments view their competitiveness.
Forrester points out that health care and pensions still have to be paid at a higher rate. Infrastructure and other services would also need continued funding, potentially with lower tax revenues.
Part of the report failed to emphasize the irony inherent in the idea that automation would then become part of Europe’s response to the loss of not just the taxes owed to those of those that simply won’t exist because of the impending demographic crisis, but also taxes lost from cheap jobs (which would have been paid by the workers appropriated by machines).
The researchers said that by 2035, about one in four people will be 65 or older, up from one in 13 in 1950; by 2060 this will rise to one in three.
Green energy and digital technologies could help offset the jobs lost through automation, Forrester added.
Middle-class workforce consisting of simple, routine tasks in the retail, hospitality, leisure and hospitality industries are most at risk from automation.
According to Forrester, “workers with little bargaining power are most at risk of being evicted, especially in countries where many are subject to fixed-term contracts, including zero-hour contracts in the UK, which do not require guaranteed working hours or part-time jobs.” with low wages, such as ‘mini-jobs’ in Germany.”
According to the study, routine jobs make up 38 percent of the workforce in Germany, 34 percent in France and 31 percent in the UK.
Michael O’Grady, chief forecasting analyst at Forrester, argued that the decline in productivity caused by COVID-19 would force organizations to automate manual processes and improve remote working.
“However, the pandemic is just one factor that will shape the future of work in Europe over the next two decades. European organizations are also in a particularly strong position to embrace automation due to Europe’s declining workforce and high levels of routine low-skilled jobs. that can be easily automated.
“Automation will then become an integral part of how European governments and employers view their competitiveness and manage their older demographics,” he said.
Forrester said robotic process automation (RPA) — which uses software to automate screen-based office tasks — is taking on a leadership role and growing rapidly. The RPA market was valued at $17 billion in 2019, with 21 percent of European leaders saying their organization would adopt RPA by 2021.
Investors certainly see the appeal of automation technologies. RPA specialist UiPath was valued at about $35.8 billion on its IPO last year. British RPA specialist Blue Prism agreed to a £1.243 billion cash offer from Bolt Bidco, the subsidiary of technology holdings SS&C that surpassed a £1.1 billion bid from Vista Equity Partners in December last year.
Meanwhile, established application vendors are on a sort of me-too mission regarding automation. Application bighitters Oracle and SAP are among the software companies that have launched RPA-like features in recent years.
In a separate report, Forrester has said there will ultimately be only one winner among the application vendors in the RPA race — and that would be Microsoft. ®