Ladies and Gentlemen,
I would like to extend my appreciation to Mr. Peter Tichansky for his kind invitation, and to thank our host, the Business Council for International Understanding, for organizing this important event.
The 2030 Agenda for Sustainable Development notes the important role of the entire private sector, ranging from micro-enterprises to cooperatives to multinationals, in the implementation of the Sustainable Development Goals (SDGs).
According to a recent survey conducted by the World Business Council for Sustainable Development, firms perceive the SDGs as a strategic opportunity to enhance their license to operate, innovate and grow.
Seventy-eight per cent of companies surveyed answered that they had already undertaken efforts to identify priority SDGs for their organization. This is very encouraging news indeed, and it sets the stage for some of the remarks I will make in what follows.
A Changing Labour Market
If I were to be asked which SDG, I consider to be symbolic of the whole 2030 Agenda, I would say SDG 12, Sustainable Consumption and Production. For embedded therein are many of the fundamental and transformative changes that will be necessary for us to achieve sustainable development, including changes in behaviour that will affect the physical world around us, the environmental dimension of the SDGs.
But it would be too easy to stop there. The transformational changes we will have to undergo offer also the opportunity to guide change in positive directions. And nowhere is this guidance likely to be more necessary and more timely than in the world of work.
Guy Ryder will speak with absolute authority on what that entails. I can focus on a few observations that I will use to make a fundamental point—shaping the future of work is not a matter for governments alone. Like all else in the 2030 Agenda, it is a matter of partnerships, with closely interlinked roles of public and private sectors, of private business and labour market institutions, or young and old alike.
We live in a world of change, and many of these changes affect the world of work. Many innovations in the world of work originate in the private sector. These range from management innovations that substantially alter how economic activities are conducted to workspace designs that seek to improve well-being and safety of employees.
On the other hand, market failures, e.g. high search cost and asymmetric information, and society’s need for equality, require public sector intervention in the labour market, as these challenges goes far beyond the capacity of any single private firm to address.
A more organic combination of private sector innovation and the longer-term, social planning role of governments is needed as the world faces a rapidly changing labour market. For that is at the heart of the challenge that we face – the change is deep and wrenching, and it is rapid.
Partly a result of dynamic technological change and economic structural transformation, the traditional concept of a “job for life” has changed in today’s world. New types of contracts have increased the demand for innovative employment services. In the highly globalized world, companies demand flexible staff structures to react faster and more effectively to market developments.
At the same time, employees require employment security, which has worsened in many parts of the world. The United Nations Department of Economic and Social Affairs report, Sustainable Development Outlook, projects that in 2030 – globally – 145 million additional people will be in vulnerable employment, that includes own-account workers and contributing family workers, raising the number of people in vulnerable employment to about 1.5 billion.
The deep-rooted fear of economic uncertainty holds back productive investments and slows down progress on sustainable development.
It also opens the door to populism, inward-looking policies that offer facile and ultimately unrealistic solutions to uncertain people who desperate for comforting solutions.
Perhaps worse, it undermines their trust in public institutions, including global ones, at exactly the time when we need to be able to rely on a multilateral approach.
Employment insecurity will therefore remain a major concern.
Future Challenges
Two challenges in the labour market need to be urgently addressed. First is youth employment. Globally, over one-fifth of young people were not in employment, education or training last year -- a ratio that has not seen any decrease during the entire past decade.
Yet, public and private institutions can collaborate to improve the situation by (1) providing training to improve school-to-work transition; (2) expanding job creation for the youth in existing and new companies; (3) promoting youth entrepreneurship development; and (4) involving youth in open and participatory discussion and agreement on policy and institutional needs.
The second challenge concerns the effect of technological change on labour markets. For example, automation, while presenting great potential for improving productivity, will entail significant adjustments in labour markets, particularly for less skilled workers, who may face widespread unemployment and loss of wages. This would widen the existing income inequality and cause a further decrease in the share of labour in national income.
Linked to this are two further issues. Our economies, in fact our very societies, are digitalizing rapidly. There exists, among countries and within countries, a technological divide that is increasingly a digital one, one which fundamentally affects relations on labour markets, and within and between societies.
Those equipped to participate productively in the digital economy will be able to exploit the many opportunities it offers. They will be paid higher wages. They will have occupations that may prove less susceptible to automation or to being exported.
Those who are not so equipped will fall behind. And they will suffer from widening income disparities, and more restricted opportunities.
On the global scale, advances in digital technology will enable the increasing unbundling and digitalization of service provision, leading to the development of new global service value chains. The geographic location of this service provision will become utterly irrelevant in an age of instantaneous communication and absolute data connectivity.
These may well supplant the global production value chains that have driven so much of trade and development over the past four decades.
It will not be merely lower wages that will enable developing countries to take their place in such value chains. It will be the capacity to add value to these chains, and this will depend on the digital infrastructure available in a country and the digital training its workers enjoy.
The implications of this evolution for labour markets will be deep.
Partnerships Will be Key
Public-private cooperation will be important to contain the negative effects of technological changes. This will entail building forward-looking and inclusive education and training systems, with investment in continuous learning and the development of skills in areas where demand remains unmet, including above all in the digital skills of workers.
It will also entail expanding social protection coverage, with targeted support for the most affected sectors and locations, to provide the basis for a just and sustainable transition of those most adversely affected into new occupations and new skills.
It will require addressing the widening inequalities of income distribution and of opportunity. Progressive and innovative tax systems may be a key element of this, as will targeted social expenditures. Consideration could also be given to the role that a Universal Basic Income (UBI) might play in this regard.
And finally, the rapid changes and rising uncertainties in the future world of work demand the building of strong labour-market institutions to help ensure that the interests of workers are well represented and that future developments in labour markets ultimately reflect the social consensus that should guide the necessary transformations.
Conclusion
Ladies and Gentlemen,
All Member States and non-state actors, particularly the private business sector, should share equal ownership and accountability in fulfilling our global vision of leaving no one behind.
My Department has been offering dynamic and candid multi-stakeholder platforms to discuss the issues related to partnerships with the private sector. These platforms include: the ECOSOC Partnership Forum; the SDGs Business Forum; and the Partnership Exchange.
I encourage you to engage actively in these policy spaces. Only through this dialogue and engagement will we be able to build the kinds of partnerships that offer us the prospect of managing the challenges of changes in labour markets in ways that yield desirable results, and leave no one behind.
I thank you for your attention.
I would like to extend my appreciation to Mr. Peter Tichansky for his kind invitation, and to thank our host, the Business Council for International Understanding, for organizing this important event.
The 2030 Agenda for Sustainable Development notes the important role of the entire private sector, ranging from micro-enterprises to cooperatives to multinationals, in the implementation of the Sustainable Development Goals (SDGs).
According to a recent survey conducted by the World Business Council for Sustainable Development, firms perceive the SDGs as a strategic opportunity to enhance their license to operate, innovate and grow.
Seventy-eight per cent of companies surveyed answered that they had already undertaken efforts to identify priority SDGs for their organization. This is very encouraging news indeed, and it sets the stage for some of the remarks I will make in what follows.
A Changing Labour Market
If I were to be asked which SDG, I consider to be symbolic of the whole 2030 Agenda, I would say SDG 12, Sustainable Consumption and Production. For embedded therein are many of the fundamental and transformative changes that will be necessary for us to achieve sustainable development, including changes in behaviour that will affect the physical world around us, the environmental dimension of the SDGs.
But it would be too easy to stop there. The transformational changes we will have to undergo offer also the opportunity to guide change in positive directions. And nowhere is this guidance likely to be more necessary and more timely than in the world of work.
Guy Ryder will speak with absolute authority on what that entails. I can focus on a few observations that I will use to make a fundamental point—shaping the future of work is not a matter for governments alone. Like all else in the 2030 Agenda, it is a matter of partnerships, with closely interlinked roles of public and private sectors, of private business and labour market institutions, or young and old alike.
We live in a world of change, and many of these changes affect the world of work. Many innovations in the world of work originate in the private sector. These range from management innovations that substantially alter how economic activities are conducted to workspace designs that seek to improve well-being and safety of employees.
On the other hand, market failures, e.g. high search cost and asymmetric information, and society’s need for equality, require public sector intervention in the labour market, as these challenges goes far beyond the capacity of any single private firm to address.
A more organic combination of private sector innovation and the longer-term, social planning role of governments is needed as the world faces a rapidly changing labour market. For that is at the heart of the challenge that we face – the change is deep and wrenching, and it is rapid.
Partly a result of dynamic technological change and economic structural transformation, the traditional concept of a “job for life” has changed in today’s world. New types of contracts have increased the demand for innovative employment services. In the highly globalized world, companies demand flexible staff structures to react faster and more effectively to market developments.
At the same time, employees require employment security, which has worsened in many parts of the world. The United Nations Department of Economic and Social Affairs report, Sustainable Development Outlook, projects that in 2030 – globally – 145 million additional people will be in vulnerable employment, that includes own-account workers and contributing family workers, raising the number of people in vulnerable employment to about 1.5 billion.
The deep-rooted fear of economic uncertainty holds back productive investments and slows down progress on sustainable development.
It also opens the door to populism, inward-looking policies that offer facile and ultimately unrealistic solutions to uncertain people who desperate for comforting solutions.
Perhaps worse, it undermines their trust in public institutions, including global ones, at exactly the time when we need to be able to rely on a multilateral approach.
Employment insecurity will therefore remain a major concern.
Future Challenges
Two challenges in the labour market need to be urgently addressed. First is youth employment. Globally, over one-fifth of young people were not in employment, education or training last year -- a ratio that has not seen any decrease during the entire past decade.
Yet, public and private institutions can collaborate to improve the situation by (1) providing training to improve school-to-work transition; (2) expanding job creation for the youth in existing and new companies; (3) promoting youth entrepreneurship development; and (4) involving youth in open and participatory discussion and agreement on policy and institutional needs.
The second challenge concerns the effect of technological change on labour markets. For example, automation, while presenting great potential for improving productivity, will entail significant adjustments in labour markets, particularly for less skilled workers, who may face widespread unemployment and loss of wages. This would widen the existing income inequality and cause a further decrease in the share of labour in national income.
Linked to this are two further issues. Our economies, in fact our very societies, are digitalizing rapidly. There exists, among countries and within countries, a technological divide that is increasingly a digital one, one which fundamentally affects relations on labour markets, and within and between societies.
Those equipped to participate productively in the digital economy will be able to exploit the many opportunities it offers. They will be paid higher wages. They will have occupations that may prove less susceptible to automation or to being exported.
Those who are not so equipped will fall behind. And they will suffer from widening income disparities, and more restricted opportunities.
On the global scale, advances in digital technology will enable the increasing unbundling and digitalization of service provision, leading to the development of new global service value chains. The geographic location of this service provision will become utterly irrelevant in an age of instantaneous communication and absolute data connectivity.
These may well supplant the global production value chains that have driven so much of trade and development over the past four decades.
It will not be merely lower wages that will enable developing countries to take their place in such value chains. It will be the capacity to add value to these chains, and this will depend on the digital infrastructure available in a country and the digital training its workers enjoy.
The implications of this evolution for labour markets will be deep.
Partnerships Will be Key
Public-private cooperation will be important to contain the negative effects of technological changes. This will entail building forward-looking and inclusive education and training systems, with investment in continuous learning and the development of skills in areas where demand remains unmet, including above all in the digital skills of workers.
It will also entail expanding social protection coverage, with targeted support for the most affected sectors and locations, to provide the basis for a just and sustainable transition of those most adversely affected into new occupations and new skills.
It will require addressing the widening inequalities of income distribution and of opportunity. Progressive and innovative tax systems may be a key element of this, as will targeted social expenditures. Consideration could also be given to the role that a Universal Basic Income (UBI) might play in this regard.
And finally, the rapid changes and rising uncertainties in the future world of work demand the building of strong labour-market institutions to help ensure that the interests of workers are well represented and that future developments in labour markets ultimately reflect the social consensus that should guide the necessary transformations.
Conclusion
Ladies and Gentlemen,
All Member States and non-state actors, particularly the private business sector, should share equal ownership and accountability in fulfilling our global vision of leaving no one behind.
My Department has been offering dynamic and candid multi-stakeholder platforms to discuss the issues related to partnerships with the private sector. These platforms include: the ECOSOC Partnership Forum; the SDGs Business Forum; and the Partnership Exchange.
I encourage you to engage actively in these policy spaces. Only through this dialogue and engagement will we be able to build the kinds of partnerships that offer us the prospect of managing the challenges of changes in labour markets in ways that yield desirable results, and leave no one behind.
I thank you for your attention.
File date:
Tuesday, September 24, 2019