According to BusinessEurope, escalating global trade tensions are a big risk for the EU’s economic growth, which could potentially shrink global GDP by almost 1% in 2020. This, combined with the lack of digitally skilled technical workers to meet the demands of rapidly increasing digitalisation, adds up to worrying times for Europe’s economy in the coming years.
These concerns were reported to BusinessEurope by its 39 member federations and formed the basis of the Autumn Economic Outlook 2018. It showed that the EU economy slowed slightly in the first half of 2018, although growth is expected to proceed above its long-term rate.
According to the organisation’s Director General Markus J. Beyrer: “An escalating global trade war and digital skills shortages in Europe are the major concerns for many businesses in Europe. We need more skilled labour to avoid harm to the EU economy. We also see that with digitalisation more jobs will be added than lost. Our analysis shows that we can expect EU growth of 2.2% for 2018 and 2% for 2019, a slight downward revision from our spring 2018 analysis. We need wide-ranging reforms in product and labour markets in order to raise the EU’s underlying capacity to grow.”
Focusing on digitalisation, the Outlook concludes that, contrary to what is often argued, new technologies such as robotics and Artificial Intelligence (AI) are likely to increase, rather than reduce overall labour demand.
According to the World Economic Forum, while globally 75 million jobs may be displaced by new technology by 2022, 133 million additional new roles could emerge in their wake. But steps need to be taken to help workers develop new skills for the digital age to enable them to transition to new roles and sectors.