Digitalization belongs right at the top of the political agenda!

Digitalization and automation will soon bring radical change to our society. A lack of skilled workers and unemployment loom large and dangerous. However, few politicians show much interest in this issue. But what we urgently need is a broad discussion of how we can prepare for this imminent revolution.

Industry 4.0, Blockchain, the cloud, artificial intelligence, permanent networking are a few digitalization buzzwords. Indeed, hardly a week passes without discussion of some aspect of digitalization. This reveals the dominance and relevance of the issue. In fact digitalization and automation will greatly influence our life-style and the world of work and will have lasting effects. And what importance did the recent Grand Coalition negotiations attach to this issue? It attracted no more than marginal interest.

Digitalization and automation will change the working world radically in the next few years. In a nutshell, all activities that are repeatable will be scrutinized as to whether they can be automated or not. And in most cases it will be possible to do so.

The same applies to activities that are not very creative. It will also be possible to automate these at least partly in a few years’ time using artificial intelligence. Of course, it is not certain to what degree and above all at what speed digitalization and automation will progress. Companies need to make use of digitalization to optimize their processes and reduce their costs.

This process optimisation with the help of digitalization is already well advanced in industry and is picking up ever more momentum due to the networking of machines and tools (key word here is: Industry 4.0). But in the service sector and at the banks we are only at the beginning of the road and the changes in these sectors of the economy are likely to be much more keenly felt in the next few years.

In past eras of technological change the number of employed persons decreased significantly. This does not have to be the case this time. In this respect, we are in the happy situation that the effect of digitalization on the employment market can be largely offset by demographic effects. The baby boomers will be drawing their pensions in the next few years, which will make it possible in purely arithmetic terms to shed a large part of the jobs jeopardized by digitalization without increasing unemployment.

But this gives rise to another problem. The job profile for employees will change significantly. On the one hand, with the baby boomers it is mostly very well-trained workers that will be leaving the employment market, and, on the other hand, working together with robots and artificial intelligence requires a high level of qualification and in some cases completely new skills. Without a significant amount of qualified immigration Germany will be able to meet only part of the demand for such well-qualified employees. So the lack of skilled workers could still increase substantially.

On the other hand, demand for human resources to carry out only simple activities will decline significantly. Educational deficits will make themselves felt correspondingly quickly. As a result, the employment market is likely to become a two-class society that is divided by qualification and salary levels. This development could have far-reaching social consequences. It would mean that it is no longer possible to guarantee that large sections of the population are not excluded from participating in society. This could then also have negative repercussions on political decision-making and benefit populist parties accordingly.

The effects of digitalization and automation on the employment market are inevitable and actually only a question of time. Accordingly, a serious discussion of political ideas capable of preventing such disadvantageous consequences arising in the first place is urgently necessary. Above all, education policy will need to be modernized: we will need to re-think old structures in the educational system and provide it with more funding where necessary. But a discussion that is limited to the educational system alone is not enough. In many matters we need to go down completely new roads. A serious discussion in society about the unconditional basic income is necessary here. Linked to this are also ideas for reorganizing the tax system. After all, as digitalization progresses, ever more added value is created by machines. But at the moment, this added value is not taxed in the same way as normal added value. In the long run this is not sustainable.

Digitalization and automation will entail many changes for society and for each human being. If it fails to engage in adequate political and social debate Germany will possibly become less attractive and competitive as it would lack the ideas needed to master the challenges it will face. One thing is also clear: the world will not wait for Germany on this issue, either. If Germany as a business location is unable to offer companies what they want, then investments will be made in countries that are better positioned.

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