No. 37




The Development Trends of Future Economy and Future Skills *

04 June 2018


RiTo No. 37, 2018

  • Raul Eamets

    Dean, Professor of Macroeconomics, Faculty of Social Sciences, University of Tartu

This article deals with the development trends that await us in the coming 20–25 years. On the basis of these trends, an overview of the skills and knowledge that will probably be necessary on the future labour market is drafted.

When we describe the future, it is necessary to keep in mind two things. First, we can predict the future events on the basis of the information we have today. Second, very many things will happen in the future about which we know nothing today. The most important trends that we have to face in the coming years are: ageing of the population, diversification of the labour market, increasing of inequality, and growth of flexibility of the labour market. People will change jobs and professions considerably more often than today, thus the importance of life-long learning will grow. Transferable skills that enable to cope in different sectors and professions will become essential. Such skills include the gross cultural competences, critical thinking, virtual collaboration, mathematical thinking and empathy.

New technologies and automation will change the production process, and also the services, and the need for IT skills will increase in all fields of life. The share of emerging economies in global economy will grow, new business ecosystems will emerge, and the importance of clusters and networks in business will increase.

At the same time, there will certainly be trends that work against globalisation. Like polarisation of workers, and increase of cybercrime and the stricter data protection it will bring along. The geopolitical developments of today indicate that protectionism will increase in the world, artificial intelligence (AI) will take away jobs also from the whit-collar workers, the development of MOOCs will reduce learning mobility, etc.

In the last section of the article, some visions on the developments of future economy in the long run are presented. With great probability, there will be great changes in the use of resources, such a notion as garbage will disappear, because everything will be recycled. We can see already today how many people, especially the younger generation, prefer to share and rent things instead of owning them. This will give an impetus to sharing economy and other innovative business models. At present, we are yet unable to assess the impact of climate change on tourism and agriculture. We already have climate refugees who look for better living conditions because of lack of clean water or desertification. Today, the divide between humans and artificial intelligence goes along the border of empathy, ability to adapt, culture, outlook on life, and conscience. Robots do not yet form a community or a society. If we speak of real threats, then the greatest threat in the perceivable future is that an evil person will use robots against other people by hacking into the systems, organising terrorist acts, etc.

The article ends with a quotation of the well-known Amara’s law: We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.

* The article was written with the support of the financing of the study of the Foresight Centre “Supply of Labour Force in Estonia: Long-term Perspective” and RITA1 project “Migration dependency and integration challenges for Estonia, employers, communities and educational system”.