- Fourth Industrial Revolution technologies are making Europe´s cities smarter and driving advances in public health systems
- Unemployment is high, stemming from a combination of large-scale headcount reductions and sluggish progress on reskilling
- Highly-educated workers in some industries are thriving in the digital workplace, but many are being left behind
- Regulators still struggling to find the right approach to big tech
- Social media is helping to drive wedges into European society
Off to work we go
The year is 2025. It’s 30 April, the day before Labour Day, or Día del Trabajador, as it’s called here in Barcelona. Seventeen-year-old Eduardo is speeding down the boardwalk on a city bike, having learned from his mobility app Moverse that his usual bus journey was likely to be snail-like today. The tourists must be clogging up the roads again, he thinks, as he streaks past the statue of Columbus pointing out to sea beyond the city´s beaches.
He cheers inwardly when he catches sight of Pier 01 – one of Europe’s many thriving tech hubs. He is going to make it on time! After starting his apprenticeship last autumn, Eduardo has been late a few times, and knowing his time on the premises is monitored and that he’ll be automatically docked for absence, he has resolved not to repeat the error.
He remembers the rush of relief at having been accepted into the apprentice programme. His mother, Martina, had been beside herself with worry throughout his final year of secondary school. Youth unemployment in Spain, which has been floating between 20% and 50% ever since the Franco regime, is at 40% – one of the highest rates in the EU. When Martina found out about the EU’s Bridge to Jobs programme, she made sure he got all the paperwork in on time. Martina herself graduated from Universitat de Barcelona with an art history masters in 2008, bad timing for getting a good job. There is not much she wouldn't do to help Eduardo avoid the chronic financial uncertainty she has had to deal with as a long-time temp. And he knows it.
Eduardo absolutely loves the apprenticeship. A veteran gamer and robot geek (a passion that ignited when his cousin showed him Ex Machina at the age of 12), Eduardo has always been fascinated by the mind-bending things that emerge from the combination of code, microchips and mechanics. That he has landed a gig at such a bold and innovative robotics firm is a dream. Renovabotics is one of only a handful of companies in Europe designing robots built out of recycled parts. With China cornering the market on rare earth minerals, and attractive grants available from both Brussels and Madrid, the company’s leadership is betting big on a circular strategy.
Opening doors that seemed closed
Eduardo’s tech enthusiasm is starting to rub off on Martina, once deeply disdainful of anything ´smart´. Her conversion began during the 2020 pandemic. After a few months of being barred from her favourite indulgence – visiting art museums – she gave in and joined an online seminar by the Museu Picasso on one of his earliest works, Science and Charity.
This kicked off a whirlwind of virtual exploration of museums, and not just in Barcelona. Martina was floored by the explosion in access as well as the use of virtual reality – she could see the brushstrokes much better this way than in the museum. But she was left underwhelmed by the educational and experiential dividend of the experience. An idea was born: a subscription-based digital platform for connecting museums, art lovers and art historians. She was still friendly with many of her fellow graduates, many of whom (like her) had never made it into steady employment.
At first, she wasn’t sure how to get going. But when she did the research that led to Eduardo´s apprenticeship, she came across Women in Digital, an EU programme established to correct the stark imbalance between male-led and female-led entrepreneurship in the digital sector. (In 2020, 93% of capital invested in European companies went to all-male founding teams!) Through the programme, Martina received a small grant to supplement the money she had scraped together. She has also been connected to a mentor, who is helping her feel more and more confident about her business plan.
The penny drops – and so do the jobs
In 2025 getting smaller businesses going again remains a priority across Europe. The 2020 pandemic and its 2021 aftermath wiped out more than 10% of all SMEs in Europe, which at the time accounted for two thirds of Europe’s private sector employment. Woman- and minority-owned businesses fared the worst, partly due to the lack of a suitable network and connections and limited access to capital.
For larger firms the great surprise was how easily most adapted; moving white-collar work online turned out to be no big deal. Indeed, with dramatic exceptions – most notably in aviation, hospitality and oil and gas – a surprising number of business reported excellent numbers in 2020.
So, for many CEOs the penny dropped: the same output could be delivered with much lower cost, even within the parameters of existing business models. A wave of headcount reductions in 2021 sent millions onto unemployment benefits and into low-pay, low-security crowd-work. Again, women and minorities bore the brunt.
Over the course of 2022 to 2024 new waves of lay-offs swept across Europe, this time precipitated not by right-sizing headcount, but by the aggressive adoption of ´digital first´ business models making much fuller use of Fourth Industrial Revolution technologies. By forcing businesses through five years’ worth of digitalisation in as many months, the 2020 pandemic turned out to be an effective primer for deeper digital innovation.
Be my co-bot
Martina had felt the sharp end of this ´techceleration´ when her reasonably regular administrative work with a logistics firm dried up. Before the pandemic the logistics industry had been wary of investing in automation – for one, e-commerce demand had just been too spiky to make the RoI conclusive enough. The pandemic loosened the dam.
In 2025, warehouses still typically feature some, but far fewer, humans (some wearing smart glasses to help them ´see´ the whole operation in real time). Robotic arms equipped with sensors have taken over the picking, sorting and palletising of goods; pallets and cases are moved around by automated vehicles and swarm robots. The widespread application of AI to fleet management is reducing road accidents, minimising energy consumption and maximising loads by road, air and sea. And this document-intensive industry has finally purged itself of paper, digitalising all its invoices, bills of lading and customer documents and pulling them onto the cloud.
In 2025 automation is much more BAU across industries. And yet this has not led to the wholesale robot-takeover prophesied by headlines back in the 2010s. While some jobs are fully automatable or close to fully automatable – Martina´s data-entry job and the forklift drivers being examples – most are not. That is, most require a partnership between a human and a machine. These ´co-bot´ arrangements increase output while freeing the human up to do what humans do best – strategic planning, creative problem-solving and empathetic customer service.
Mind the (skills) gap
Meanwhile, new jobs are being created. Just as 63% of jobs performed in 2018 did not exist in 1940, in 2025, 13.5% of jobs – close to 97 million new positions – did not exist in 2020.
The unemployment rate of 2025 – 7% in the EU; 12% in Spain – is not so much about the availability of jobs. It is, however, about the availability of skills. Even before the pandemic, approximately 40% of EU employers said they were struggling to find the right talent; and 30% of graduates were working in a job where the competences they had acquired at university were not required.
In 2025, this disconnect is deeper still. Employers need workers who are not just digitally intelligent but able to learn and master new functions all the time. Yet the education system has not caught up – students are still overwhelmingly being trained on a one-off basis for one kind of job, with too little emphasis on advanced digital skills. And overall we are lagging on reskilling the workers who have lost out in the techceleration.
New solutions attract unlikely allies
By 2025 two things are clear: one, that it will take years to prepare workers for a hyper-digital economy; and two, that the digitalisation of the economy can´t, and won´t, wait. A handful of European governments start piloting universal basic income as a means of providing financial security. The trials have shown that recipients overwhelmingly use the supplement responsibly. What´s more, the bureaucratic burden of a UBI system is significantly less than in a needs-based system, where there is a separate regime for every kind of assistance, from child benefits to disability benefits.
Surprisingly, UBI emerges as one of the few points people along the political spectrum agree on. That it implies smaller government scores well with conservatives. And social democrats are keen to see UBI take a meaningful kick at inequality. The key proof-point turned out not to be the pilots in places like Finland and California but the indisputable success of a long-established UBI-esque programme in staunchly conservative Alaska.
Ultimately, Europe´s skills deficit can´t be solved through universal basic income or educational reform. Companies need to take responsibility for ensuring that their workers can fulfil the jobs required of the business, or they suffer significant consequences. Thankfully, many rise to the occasion. By 2025, Europe´s top firms offer an average of 15 days of organised training per year. And a growing number are collaborating with industry peers and suppliers to improve the quality of skills across the value chain´s labour pool.
Health gets smart
While the labour market is hard for many workers, others are thriving. Catarina is a living example. A paediatric surgeon at Barcelona´s Sant Joan de Beu Hospital, she is (mostly) thrilled with the way her effectiveness has been amplified by robotics and imaging technology. About half of her operations have become remote over the last three to four years, allowing her to take patients from regions that are under-served by the public health system. She also carries out some pro-bono work remotely for a paediatric unit at a sister hospital in the DRC.
At around three o´clock, Catarina logs on to her last appointment – with a teenager she operated on about a year ago. His mother joins too – Catarina can see the tension in her eyes, even onscreen. Eduardo had had a small but malignant tumour behind his right eye – detected by a scan after his uncle was diagnosed with a form of hereditary cancer. Luckily for Eduardo, Spain´s public health service had just kicked off a big campaign to drive pre-emptive medicine, using technologies like AI and machine learning to comb genetic data and lifestyle information to predict illness. Eduardo’s experience matches a broader trend: the cancer survival rate in Spain has climbed 5% in the last two years.
Catarina tells Eduardo that she is happy to see that his hair has grown back, and through the health app checks his pulse, temperature and ECG. With a warm smile, she also reports that the results from the test he had to do at home last week looked good. The shadow on the mother´s face lifts.
Though she misses seeing most of her patients in person, Catarina appreciates the advantages of video consultations. She has noticed that far fewer check-ins get moved or missed since people don’t have to take so much time off from work or school – plus, she likes being able to work from home when that is possible.
One thing Catarina is uneasy about is the management of medical information. She has read that the health service is piloting blockchain records, which would put patients in charge of their own medical profiles. She is happy to hear this, as long as it’s safe and secure. She thinks it´s crazy that medical data, locked up as it is in so many silos, is so inaccessible to the people it actually belongs to – how can we expect people to take responsibility for their long-term health if they don’t even have their own information to hand?
(Anti-) trust in big tech
Catarina is pretty passionate about data ownership writ large. She has been closely following the campaign in the US for a ‘Bill of Data Rights’. She thinks the movement is tackling many fascinating questions, not least the continuing debate around whether and how consumers should get paid for the use of their data. Initially this makes perfect sense to her: why is it that all other companies pay for their inputs, but social media companies do not? And yet she is learning that that could be a red herring. Users would simply end up getting paid a pittance in exchange for control of their virtual selves. Privacy, the camp argues, is a right, not a commodity.
Among the one billion users who have by 2025 left Facebook or let their profiles go idle, Catarina is glad to live in the EU, where governance on big tech feels more robust than in the US and China. After rolling out GDPR in 2018, European regulators have continued to be assertive on tech governance, focusing hard on reining in the power of the tech titans in order to create space for smaller players. Introduced in 2020 and passed in 2023, the EU´s Digital Services Act holds platforms responsible for the content they host and seriously curtails the ability of large companies to dominate their markets.
While Brussels´ bullish posture is appreciated by citizens like Catarina, the real long-term outcome is still not clear. By the time the regulation landed, big tech was already so big and experienced that, after some initial kicking, it used this size and savviness to find workarounds. Indeed, it may be that the intended cure backfires and hurts the patient, with smaller companies suffering from the cost of implementing the legislation.
The journey home
At five o´clock, Catarina packs up and leaves the hospital. Moverse tells her that the tram is quicker than the bus today (knowing that she prefers to avoid bikes when there is a chance of rain, the app does not even recommend bike share).
As the tram makes its way through a previously run-down neighbourhood, she notes the housing developments going up at breakneck pace. Her iPhone vibrates with an alert announcing that these developments will include co-working spaces that can be rented by the hour. Annoyed, she reminds herself to update her privacy settings against ads yet again, thinking: ‘if I can use a robot to operate on a patient hundreds of miles away, why can't they invent a better business model than advertising?’
Out of habit, she opens Instagram and starts scrolling, her initial apathy turning to irritation as she lands on a post by Sofia, a childhood friend from her hometown of Viladecans, a suburban area outside of Barcelona. It is a photograph of Sofia’s six-year-old – a lovely dark-eyed girl, smiling impishly in the late afternoon sun – with the caption:
Fight for your family´s health! #nohayvacunaparamihija #novaccineformykid
She recalls with incredulity Sofia´s vociferous social media support for Vox, the far-right party seeking to roll back ´radical left-wing feminism´ to reinstate 'traditional gender roles'. It´s hard to reconcile the Sofia she remembers from her youth – the star of the football team and a diligent student – with the Sofia she sees on her screen. Why doesn´t she get it? Catarina fumes.
Her watch clocks a slight elevation of blood pressure as she thinks of all the misinformation circulating like a sickness. She thought that her beloved Spain, the birthplace of Picasso, Gaudi and Goya, had learned the lessons of its past. That Spain could become anything like Trump-era America had seemed wildly implausible. Now… she was not so sure. Though out of office and the limelight for years now, Trump’s tactics had been eagerly studied and were now being aped by European populists exploiting the unemployment crisis to win power.
A few days ago she listened to a podcast about the fight against the so-called ´misinfodemic´. The speaker, an e-activist, argued that the future would be won by those who excelled at spreading ideas. He described how his organisation had analysed what made fake news spread so virally and then embedded these traits into public information campaigns. Instead of trying to push the ´truth´ onto people who have already locked onto a different worldview (proven to be about as effective as the Allied practice of dropping leaflets on German lines during the second world war), the campaign was trying to tap into deeper values – the desire for security, respect, dignity and freedom. Even more important than the message, he said, is the messenger. The campaign deliberately eschews celebrity spokespeople, experts and others perceived to be aloof elites, opting for trusted members of the community – church leaders, farmers, shopkeepers, teachers – to bear messages.
Lost in thought, Catarina starts as her phone reminds her that the tram has reached her stop. With her jacket, phone and bag jumbled together in her arms, she hurries onto the pavement in front of her building. The door opens automatically as the system picks up her smartwatch connecting to the building’s wifi; so too does the elevator, which deposits her on the seventh floor.
Her meals for the week are waiting for her on the welcome mat. She is curious to see what has been chosen for her on the basis of previous reviews and her restaurant history. In the box, there’s lab-grown meat, fresh farmed fish and fruit and vegetables grown in the AI-controlled greenhouses of Zona Franca, the old industrial neighbourhood of Barcelona.
She smiles to herself, feeling a twinge of pride at the thought of having helped to get that project going. A few years ago she voted for a public bond that funded the conversion of disused factory buildings into a high-tech vertical farm – intended as a showcase of Europe´s commitment to finally doing something meaningful to reduce emissions from food production. And now here she was, reaping the harvest, so to speak.
As she eats, Catarina re-reads Eduardo´s medical journal while a 1990s soap opera runs in the background. She likes to have the retro TV running; it reminds her of her grandmother.
At ten o´clock her watch beeps, signalling that she should get ready for bed in order to get eight hours of sleep. On the other side of town, Eduardo´s watch does the same.
Both ignore the alert – tomorrow is, after all, a holiday, with only one thing on the agenda – the Labour Day march for employment security for all.
Signals of change
While the story above is fiction, it is inspired by real-time trends. The following ´signals of change´ connect the scenario to current trends.
The state of employment (don´t forget the small guys)
The pandemic has rocked Europe´s labour market. During the second quarter of 2020, 5.5 million jobs were lost; this number excludes the tens of millions on furlough across the region. As of October 2020, the EU´s official unemployment rate sat at around 7.6%; in the eurozone it was a notch higher, at 8.4%. Thanks to aggressive government intervention to cushion the blow, unemployment is considered ´muted´ in relation to the drop in economic activity. The EU expects that unemployment will continue to rise in 2021 as emergency measures are phased out, but that joblessness will ease as the economy recovers in 2022 (or 2023, depending on our success in containing the recent resurgence of the virus as well as the vaccine roll-out). A key test will be Europe´s ability to protect its small and medium-sized enterprises (SMEs), which account for two-thirds of Europe's private sector employment. European SMEs have been slammed by the pandemic – a McKinsey survey of 2,000 European SMEs from August 2020 suggested that 55% would need to shutter by September 2021 if revenues didn´t pick up again.
Covid – an equaliser or destabiliser of corporate gender parity?
Recent crystal-ball-gazing by the Financial Times wonders whether a permanent shift to more remote work could benefit women – the idea being that being able to work from home (as matter of course rather than a perk) will lessen the work-to-family trade-offs that disadvantage women as they attempt to ascend the leadership-and-pay ladder. This sounds both promising and plausible, but in the meantime the pandemic´s impact on employment has hit women harder than men (and women of colour particularly). This seems new: pre-pandemic recessions have tended to hit men hardest or land on men and women equally. This time around, though, we may be looking at a ´she-cession´, with job losses falling disproportionately on women´s shoulders. As of August 2020, the supply of women´s labour in the US had fallen by 20% compared to February 2020 levels, while men´s had shrunk by only 9%. Why? The impact has been worst for occupations dominated by women (eg services), while women typically pick up the slack for school closures, family illness and other pandemic-related disruptions.
The misinfodemic – the other virus
´If the product is free, you are the product.´ This aphorism has been appropriated by critics of platforms like Facebook, whose user value proposition (free connection to friends) is severed from the company´s revenue source (advertising). This disconnect creates a perverse incentive to do whatever possible to keep human eyeballs locked onscreen – at odds with the platforms´ stated aim of fostering connection. According to former Silicon Valley insiders in the 2020 documentary The Social Dilemma, these measures include psychological tricks to deepen engagement (e.g. the ´like´ function) as well as using algorithms to push attention-grabbing but often misleading or straight-up false content. A study published in Science in 2018 found that so-called ´fake news´ propagates to 1,500 people six times faster in Twitter than verifiable news. As the coronavirus pandemic unfolds and we move towards vaccine roll-out, we are feeling the stakes of prioritising the emotive and ideological over the empirical. How will false information about vaccine safety impact our prospects for recovery?
Human labour versus machine labour – are the robots coming?
Yes and no. A recent paper by MIT, summarising a two-year study on ´The Work of the Future´, concludes that ´a robot-driven jobs apocalypse is not on the immediate horizon´. Technology will destroy jobs, yes, but it will create jobs too. According to the report summary, the core challenge is ensuring that technology doesn´t further polarise the economy – automation has benefitted white-collar workers far more than middle-tier and lower-paying services workers. The asymmetry is more pronounced in the US than in Europe, but the warning is the same: people feel that automation is making them poorer while making their countries and employers richer. If we want people to trust technology we need not only to ensure that automation actually creates jobs but that workers are qualified for these jobs. And this means a titanic push on skilling and reskilling. According to McKinsey an additional 1.7 million employees with tech skills will be needed by 2023 across the EU´s public sector alone; 1.1 million of these workers need to be advanced. As always the right policy frameworks are key: the MIT study cited above argues that there is a bigger threat to jobs than automation – bad policy that hinders the transition of workers from old industries to new ones.
Smart cities - on the move
Thanks to covid-19, the evolution of smart cities is picking up momentum. By 2025, the market size of the world´s smart city industry is set to double, from EUR 335 billion to EUR 670 billion. And it is thought that smart cities could generate EUR 17 trillion in economic benefits by 2026 – driving massive opportunities for both business and citizens. Aided by an explosion in digital connectivity and the increasing liberation of datasets, innovations in transport – for example, multimodal mobility as a service (MaaS), ridesharing, autonomous shuttle buses and dockless bikes/scooters – are fundamentally changing the way we move around in our cities. The rollout of 5G, coupled with more advanced AI, will unlock the next frontier for IoT-enabled smart systems – already in use for environmental sensing, traffic monitoring, video surveillance, streetlight controls, and the regulation of grid and water networks. While this potential is viewed with much excitement, concerns exist around privacy and security issues.
Jonas Prising, CEO of ManpowerGroup