Countries
in the European Union (EU) must enact policies designed to better help
workers adapt to new jobs being created by the internet if they want to
avoid increasing inequality and exclusion in the region, notes a new
World Bank Report.
According to Reaping Digital Dividends: Leveraging the Internet for Development in Europe and Central Asia,
launched in Bucharest, affordable and nearly universal access to
the internet has not been enough for countries in the EU to fully
benefit from opportunities being created by digital technologies and
more needs to be done to develop a policy environment that can better
leverage this access by linking workers to digital jobs.
Low
usage of digital payment systems and stringent regulations are some of
the complementary factors hindering the growth of the Internet economy
in the EU, notes the report. For example, early retirement and the lack
of lifelong learning opportunities for older workers limit their access
to jobs in the digital economy of several EU countries.
Additionally,
less than 30 percent of firms in the EU use cloud computing and even
fewer use this technology for more sophisticated uses beyond e-mail,
such as managerial and accounting tasks.
“Romania
is well positioned to benefit from opportunities being provided in
today’s digital world. We have fast and affordable broadband access
around the country and an all-round high-quality infrastructure. Our
goal is to correlate these opportunities with the capable Romanian
workforce through targeted and sustainable policies. And this is exactly
what we aim to do in the following phase of our Government Program for
Digital Convergence,” said Augustin Jianu, Romania's Minister of Communications and Information Society.
In
Romania, less than 10 percent of firms use cloud computing and high
barriers to entrepreneurship in the services sector hinder the adoption
of digital technologies. Furthermore, only five percent of individuals
in Romania use the internet to download official documents from public
websites, offering opportunities for big efficiency gains through
further adoption of technology.
Individuals
can also benefit from increased internet usage. Today, only 20 percent
of unemployed people in Romania use the internet to search for a job.
For those who are currently working, almost none of them telecommute,
compared to more than 10 percent in Northern and Western Europe.
The
report also notes that existing inequalities in the EU could be further
exacerbated, as unskilled workers are less likely than skilled ones to
use the internet to find a job or participate in professional networks.
“Although
new and unprecedented opportunities are being created by the internet,
there also exists the possibility of further exclusion – especially for
unskilled workers,” says Hernan Winkler, World Bank ECA Economist and lead author of the report, “We need to put policies in place that can help people adapt to new challenges.”
“Focusing
on measures that increase health and pension coverage for workers of
the ‘gig’ economy or facilitate the transition of displaced workers
toward new jobs can be more effective than creating regulations aimed at
preventing inevitable technological changes.”
Policies
to facilitate tax and social contribution payments in the sharing
economy could nudge workers out of the shadow economy and provide them
with some employment protection, according to the report. Improving
competition may also help foster the adoption of ICT among firms in the
EU, especially in Southern Europe, a region with a relatively weaker
competition environment.
The
rise of the sharing economy and alternative work arrangements pose a
new challenge to existing labor market regulations and the social
contract, which were established to protect workers in lifelong salaried
jobs. The EU has the unique opportunity to lead the policy agenda to
make the jobs of the digital economy more inclusive and more productive.
