Game-changing technologies in European services sectors

Background

Emerging transformative technological innovations have the potential to reshape and disrupt the services sectors. These sectors include the arts and entertainment, education, financial services, health and social work, public administration, retail, and transport. Services play an important role in the EU economy, not only in terms of job creation but also because they boost economic growth and enhance industrial performance.

New and potentially ‘game-changing’ technologies such as advanced robotics, autonomous transport devices, blockchain, virtual and augmented reality, and wearable devices will inevitably impact these services sectors.

Goals

RAND Europe was commissioned by Eurofound to assess the applicability and wider socio-economic implications of the following technology areas to European services:

The study examined how these areas will influence key dimensions of the services sectors such as employment, productivity and output, skills, working conditions and work organisation.

Methodology

The study allowed us to examine the above socio-economic factors in the context of different services sectors and geographical areas. Specifically, the study adopted a mixed-methods approach involving horizon scanning, trend analyses, literature reviews, stakeholder interviews, and case examples to illustrate the applicability and implications of the technology areas. The research was largely qualitative in nature but, where feasible, relevant quantitative data sources were also used to demonstrate the (potential) implications of the five technology areas.

Findings

• Advanced robotics

  Robots with a physical presence that combine improvements in machine dexterity and the ability to interact with the environment with intelligent functions

• Robot adoption may drive employment in specific areas (such as supervising or developing these technologies), however the ultimate impact on job creation/loss is difficult to predict. The use of robotics will likely change the nature of tasks performed by humans, automating some repetitive tasks but relying on human collaboration for others.
• While robots may enhance productivity by augmenting or replacing human labour, work environments may need to be redesigned to accommodate them.
• Robotics, along with wider digital technologies, may change work organisation within the service sector by enabling greater remote and platform working.
• New services sector business models may be created, including system integrators and a new ‘robotics as a service’ sector may develop.

• Autonomous transport devices

  Road, air or other vehicles that sense their environment and navigate without human input

• The potential for job losses is a common fear around autonomous vehicles, though experts argue there will still be a role for humans in transport in the near future. New jobs requiring technical skills may also be created, though training, re-skilling and upskilling would be required.
• Autonomous transport devices promise better safety for drivers and passengers, though some ethical issues could arise due to the algorithms used.
• Technical and natural challenges could prevent passengers from accomplishing other tasks.

• Blockchain

  A digital ledger that stores information on a network of machines with changes to the ledger cryptographically authenticated and reflected simultaneously for all holders of the ledger

• There is currently limited analysis of the potential implications of blockchain on job creation/destruction. However, new roles are likely to arise relating to the design, maintenance and operation of the technology, and new services relating to the applications enabled by blockchain.
• Blockchain platforms may enable new methods of collaboration between organisations based on a shared data layer, affecting the role and nature of intermediary service providers.
• Through the use of smart contracts and internal/sector currency tokens, blockchain technology could enable the automation or streamlining of business processes, impacting both productivity and internal organisation.

• Virtual and augmented reality

  VR is a computer-generated scenario that simulates a real-world experience; AR combines real-world experience with computer-generated content

• There is mixed evidence as to whether VR/AR training programmes yield better performance outcomes than traditional methods. In the logistics sector however, evidence suggests it could.
• VR/AR could increase procedural effectiveness and improve resource distribution, particularly in the healthcare services and retail sectors. It could also improve employee interaction and support team processes, alongside worker safety in high-risk environments. While it could also simplify workplace tasks, this could result in decreased worker autonomy.
• The use of this technology could also enable vocational rehabilitation of individuals with disabilities and trauma.

• Wearable devices

  Devices comprised of an ensemble of electronics, sensors and software which are designed to be worn on the body and have data collection (and transmission) capabilities

• Wearable devices gathering data on employees could transform human resource decision-making processes and make them more data-driven.
• The collected data could be leveraged to generate time, cost and manpower savings, while the hands-free design of the majority of wearable devices on the market could support process efficiency and productivity.
• Wearable devices could support more effective training processes, and highlight new roles and skill requirements. Increased scrutiny of employee performance and behaviour could however create unease and present legal and ethical challenges.
• The use of wearable devices in the workplace could result in improved inter-employee communications.

Infographics summarising these findings are available on the Eurofound website.