Impact of Industry 4.0 and Digitization on Labor Market for 2030-Verification of Keynes’ Prediction

Abstract

The research objective of this study is to examine the changes in technological unemployment and to evaluate Keynes’ theory based on a literature analysis concerning the fourth industrial revolution. The methodology used in this study is a literature analysis of 86 papers published between 2011 and 2020 on topics related to Industry 4.0, the labor market, and technological unemployment. The change caused by the labor market raises employment sustainability issues. Among the goals adopted at the 2012 UN Rio+20 Conference on Sustainable Development, this study is directly related to goals 8 and 9, and indirectly to goal 10. Research evidence suggests that the impact of Industry 4.0 processes will reduce the amount of labor needed, bringing us closer to Keynes’ vision of three hours a day. The analysis suggests that reduced working hours will increase economic efficiency through more intensive work. The literature is used to determine whether the trend of reduced working hours can be interpreted as a positive or negative phenomenon. The extent of technological unemployment is determined by the digitalization strategy of each country and the speed of its introduction, as well as the readiness of the education system in a given country to retrain vulnerable groups in the labor market. However, the overall picture is positive: on the one hand, digital transformation opens up a wide range of opportunities for a more human life, and on the other hand, from an economic point of view, digitalization will become an inescapable element of competition by reducing marginal costs. The study’s novelty is that the effects of Industry 4.0 and technological unemployment on the labor market are analyzed in the context of Keynes’ theory.