EY: The Future of Work

The impact of digitalization on the labour force in Germany, Switzerland, and Austria

An EY report prepared in collaboration with Oxford Analytica examined coming technological changes to the means of production, collectively known as Industry 4.0, which are set to radically change both national economies and the lives of individuals.

Nowhere is this more pronounced than in central Europe, where economies such as Germany must balance the successful transition to these tools while also to losing an estimated 3.5 million workers between 2015 and 2030.

Through examining tailored scenarios for the adoption of Industry 4.0 tools and techniques, the Future of Work study reveals likely industrial winners and losers, and wider economic effects that will shape the coming decade in each country.

Germany

  • The automotive sector will undergo a radical shift, with each scenario predicting at least a 50% drop in total employment by 2030
  • Manufacturing will fare similarly 
  • Jobs will be created in other sectors such as health and IT
  • The future of the Mittelstand is undetermined, with smaller companies needing to adapt quickly to digitalisation in order to meet customer demand.

Switzerland

  • Potentially 1.35 million Swiss jobs are at a high risk of automation, upwards of 25% of the total labour force
  • However talent-heavy industries such as chemicals and pharmaceuticals are well positioned to grow, with even the most conservative scenario predicting a 30% increase in GDP growth
  • The finance sector is also set to remain important, as while roles may change, implementation of Industry 4.0 technologies will itself drive relative sector growth .

Austria

  • While nationally well positioned for the adoption of digital tools and new technologies, the impacts of Industry 4.0 are unlikely to be spread evenly, leading to clustering in places such as Vienna, which are already well connected;
  • Clustering is a bigger driver of growth than access to talent, further reinforcing the strong growth pattern of cities and areas with high levels of digitalisation over those less advanced; although
  • the structural importance of Germany will ultimately determine the pace and direction of digitalization, as its role in accounting for more than 30% of both Austrian imports and exports will be a significant factor in shaping demand, and thus the adoption of Industry 4.0 technologies.