No. 38




Labour Market 2035. Future Trends and Scenarios on Labour Market

05 December 2018


RiTo No. 38, 2018

The Foresight Centre at the Parliament of Estonia is working on a scenario-project on the future of work. Four alternative development paths were developed for the Estonian labour market under the heading Tööturg 2035 (‘Labour market 2035’).

The scenarios were developed on the basis of project specific research on the topics of working flexibly, virtual work, mobile work, developments of long-term migration and demography in Estonia, and legal status of workers. The process involved several discussion seminars with Estonian opinion leaders in economy and society, policy makers, and experts. The main impact factors in the scenario packages are the effects of technological development on the labour market, and changes in labour migration in the European Union. One type of scenario observes both the loss and creation of jobs, with the effect of creating jobs dominating during the scenario period; in other types, the effect of the loss of jobs dominates during the scenario period. In terms of migration, the migration policy and attitudes towards labour migration from third countries may become more open in the European Union, which may lead to a situation where migration policy and attitudes towards labour migration from third countries are becoming more closed in the European Union. The specific features of the situation in Estonia play a role in every scenario, resulting in unique scenarios and possible development paths. The four scenarios, in short, are:

Talent hub Tallinn: The skilful use of technological development and the opportunities of the global labour market create workplaces that use smart, flexible, and varied work methods. Tallinn is developing into an international centre for talents, and economy is growing rapidly, but a certain part of the labour force is dissatisfied with the increasing social and regional inequalities and consider the change too drastic.

Global village of nomads: Estonian companies are postponing automation because it is quite easy to find and employ lower-paid labour force from third countries. Elsewhere, automation leads to improved efficacy and, over time, Estonian companies are also forced to invest into technology or risk falling behind their competitors. High level of migration, poor wage growth and rising unemployment will lead to social dissatisfaction.

New world of work: As a result of automation and restricted labour migration, the workforce employed in routine work will decrease while labour shortage in fields requiring more specialised skills will simultaneously increase. Routine work will start to disappear, yet there are very few new work opportunities. Society will face a new complex challenge.

Self-reliant Estonia: Estonian companies have the opportunity to modernise their operations and processes and shift to more innovative business models, but the resulting shortage of talents due to restrictions to labour migration holds back the development. Estonia’s economy suffers from the lack of innovation and the shortage of starting breakthrough companies, which also means a slow change in the employment structure and limited opportunities for self-realisation on the labour market.