European Trade Union Institute, ETUI.

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13 December 2018

Slovakia: work in transition or the impact of robotization on the labour market

In a report analysing the impact of robotization on jobs, the European Bank for Reconstruction and Development finds that workers in Slovakia are at some risk of displacement from the labour market, with robots mostly concentrated in the textiles, agriculture and manufacturing sectors. This finding is all the more remarkable as the country already has the highest proportion in Europe of industrial robots compared with the number of workers.

The study, Transition Report 2018-19 : Work in Transition,  published by the European Bank for Reconstruction and Development (EBRD) analyses the dependence of the Slovak economy on a few sectors that are sensitive to robotization (such as automotive and engineering). On average, workers in the EBRD regions face a significantly higher risk of job automation than their counterparts in advanced economies. It is calculated in Chapter 2 of the report that the mean probability of a job being automated in the foreseeable future is 57% in the Slovak Republic.

Technological innovations are quickly shifting the balance between activities performed by humans and tasks performed by machines, according to the EBRD report, and in manufacturing, the percentage of jobs that are at risk of automation may be particularly high. At the same time, robots can help fill job shortages in Eastern Europe, a region with an ageing population. Slovakia is, in this regard, at the top of the ranking of countries facing automatisation of jobs.

Observers question whether the country is aware of these developments. For instance, the National Reform Programme of the Slovak Republic 2018 and the related Action Plan do not mention any activities that anticipate future technological changes, apart from some activities in the area of e-commerce. With the increasing use of industrial robots across the globe, an average worker in Slovakia faces a 62% median probability that his or her job will be automated in the near future. The country already has the highest share of industrial robots against the number of workers in Europe, with an increase in the number of robots between 1993 and 2016 to 93 robots for every 10,000 manufacturing workers. A more dynamic growth has been observed only in Germany and Sweden. The expected automation of the manufacturing sector, will require the right skills needed to operate and programme such robots.

The main driver for the robotization is coming from foreign-direct investment, with the highest ratios for the EBRD region in Slovakia and Slovenia. The latest investment comes from Jaguar. For the production of the form’s Land Rover model, Jaguar is investing 1.4bn euro in a new car manufacturing plant in Nitra. The plant is due to have a production capacity of 150,000 cars per year. The production is not yet launched, but collective bargaining was successfully concluded in a first round of talks with trade unions. Although the company the trade unions demanded 13.5% pay hike, the agreed increase is one of the biggest one-off pay increases in the Slovak automotive industry ever.

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