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Rapid action needed for people to meet challenges of changing world of work

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Governments need to overhaul their approach to employment and jobs to reduce further social and economic tensions, according to a new report from the OECD. Without rapid action, many people, particularly the low skilled, will be left behind in the fast-changing world of work.

The OECD Employment Outlook 2019 is part of the OECD’s Future of Work initiative and the “I am the Future of Work” campaign, which aims to make the future of work better for all, helping to transform learning and social protection systems and reduce inequalities between people and across regions.  

“The OECD Employment Outlook does not envisage a jobless future. But it does foresee major challenges for the future of work,” said OECD Secretary-General Angel Gurría, launching the report in Berlin with Hubertus Heil, Germany’s Federal Minister of Labour and Social Affairs. “With the right policies, we can manage these challenges. We face significant transformation, but we have the opportunity and the determination to use this moment and build a future of work that benefits everyone.”

While the OECD area has fully recovered the jobs lost during the crisis and today the employment rate is 2 percentage points higher than before the crisis, the projected slowdown in the global economy casts a shadow over short-term job prospects, and the job market has continued to polarise. To help workers, firms, and countries adapt to the changing world of work, the OECD proposes in this Outlook a Transition Agenda for a Future that Works for All.                

The employment rate improvement in most OECD countries has been driven by a substantial rise in the share of women in work and older workers staying longer in employment. Moreover, much of the increase in employment reflects the growing number of high-skilled jobs, the share of which has risen by 25% in OECD countries over the past two decades.

However, among young people with less than tertiary education in many countries, a rising share are out of work or, if in work, under-employed or low-paid. Men have seen an increase in joblessness and under-employment in some countries, although labour market outcomes for women remain worse on average.

The digital transformation, globalisation and demographic changes have already been reshaping the world of work. Looking ahead, 14% of existing jobs could disappear as a result of automation in the next 15-20 years, with another 32% set to change radically.

While full-time, permanent employment is likely to still account for many, if not most, jobs in the future, the past few years have seen a further rise in non-standard work in some countries, such as self-employment and temporary contracts. Part-time employment has risen in virtually every OECD country over the past few decades. The share of people who work part-time but would prefer to work full-time has also risen in two thirds of OECD countries for which data are available.

The Agenda recommends that countries focus on four key areas: labour protection, social protection, learning and social dialogue.

It underlines the importance of ensuring adequate labour law protection for workers, regardless of their employment status. Governments should tackle false self-employment, which employers sometimes use to avoid taxes and regulations, minimise the “grey zone” between salaried work and self-employment, and extend rights to workers left in that zone.

Adapting and extending social protection is essential to ensure better coverage for workers in non-standard forms of employment, according to the report. Non-standard workers are, in some countries, 40-50% less likely to receive any form of income support while out of work than standard employees. Benefit entitlements should be made portable across jobs and targeted social protection measures complemented with more universal and unconditional support.

In all OECD countries, training participation is lowest among those who need it most, including the low-skilled, older adults and non-standard workers. A major overhaul of adult learning programmes to increase their coverage and promote quality is needed to harness the benefits of the changing world of work. Measures should include removing time and financial constraints to participation in training, making training rights portable, and providing quality information and counselling.

Union membership has steadily declined over the last three decades in OECD countries, falling from 30% in 1985 to 16% in 2016, says the Outlook. This has weakened workers’ bargaining power and contributed to the decline in the share of national income going to workers. Membership is even lower among non-standard workers, who are 50% less likely than standard workers to be unionised. Access to collective bargaining and social dialogue should be extended beyond standard employment.

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Small Business, Big Problem: New Report Says 67% of SMEs Worldwide Are Fighting for Survival

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Small- and medium-sized enterprises (SMEs) and mid-sized companies are the backbone of the global economy. They create close to 70% of jobs and GDP worldwide. But, amid warnings of a global recession, research from the World Economic Forum and the National University of Singapore Business School indicates that 67% of executives from SMEs cite survival and expansion as their main challenge.

They mention low margins, the challenge of scaling the business and expanding to new markets, and clients/consumers as the main pressure points.

The report, Future Readiness of SMEs and Mid-Sized Companies: A Year On, looks at companies emerging from the pandemic. It builds on analysis of over 200 peer-reviewed articles and the quantitative and qualitative surveying of about 800 leaders and executives from SMEs and mid-sized companies. Business leaders also cite talent acquisition and retention (48%), culture and values (34%), funding and access to capital (24%), as well as non-favourable business policy environments (22%) as their biggest challenge.

The report also identifies pragmatic ways for smaller companies to embed future readiness into corporate strategies and highlights sustainability and digital transformation as two overlooked challenges. It focuses on how smaller companies can boost their resilience through stronger business frameworks. It also highlights how their high level of agility can benefit the development and implementation of:

– A strategic approach to talent management

– A staged approach to digital transformation

– Specific sustainability measures depending on the company’s level of maturity in this space

While smaller companies can increase their future readiness, the wider policy environment – such as the infrastructure for digital trade and finance – has a direct and important impact on their ability to thrive. It is, therefore, key for policy-makers, investors and other stakeholders to do what is in their capabilities to contribute to building the future readiness of this segment of the economy.

“The business community is stepping up to tackle the biggest issues facing the world. SMEs and mid-sized companies are key enablers in this pursuit. This report sheds light on some key opportunity spaces for SMEs and mid-sized to do exactly that,” said Børge Brende, President, World Economic Forum.

Rashimah Rajah, Professor at the National University of Singapore and co-lead author of the report, added: “SMEs and mid-sized companies have unique strengths in their ability to pivot their business models to be more future ready and, by hiring and developing the right talent, they can mobilize positive internal and external change faster than larger companies. However, to fully realize their potential, they also need the support of policy-makers in recognizing their credentials as well as in rewarding sustainability initiatives.”

The report was developed in collaboration with the National University of Singapore Business School, as well as with expert contributions from UnternehmerTUM, Aston Business School, TBS Education, the Aspen Institute, Asia Global Institute and the International Chamber of Commerce.

The World Economic Forum will be leveraging the insights generated in this report to further support SMEs and mid-sized companies in their future-readiness journey. This will be done through the creation of additional resources including the continuous development of the Forum’s self-assessment and benchmarking tool on future readiness, as well as the creation of a space for informal peer-to-peer learning between companies as well as meet-ups with key experts.

With some of the key insights of the report coming from the New Champions Community, the Forum aims to amplify the voices of purpose-driven mid-sized businesses. This community and its more than 100 members share and learn from best practices, proven innovations and support new partnerships for the common good in the mid-sized landscape.

The Forum is now accepting applications from forward-looking mid-sized companies that are pioneering new business models, emerging technologies and sustainable growth strategies.

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A Greener Cooling Pathway Can Create a $1.6 Trillion Investment Opportunity in India

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A new World Bank report finds that as temperatures steadily rise in India due to climate change, keeping spaces cool using alternative and innovative energy efficient technologies can open an investment opportunity of $1.6 trillion by 2040.  This also has the potential to reduce greenhouse gas emissions significantly and create nearly 3.7 million jobs.

India is experiencing higher temperatures every year. By 2030, over 160-200 million people across the country could be exposed to lethal heat waves annually. Around 34 million people in India will face job losses due to heat stress related productivity decline.  The current food loss due to heat during transportation is close to $13 billion annually.  By 2037, the demand for cooling is likely to be eight times more than current levels. This means there will be a demand for a new air-conditioner every 15 seconds, leading to an expected rise of 435 percent in annual greenhouse gas emissions over the next two decades.

The report, “Climate Investment Opportunities in India’s Cooling Sector” finds that shifting to a more energy efficient pathway could lead to a substantial reduction in expected CO2 levels over the next two decades.

“India’s cooling strategy can help save lives and livelihoods, reduce carbon emissions and simultaneously position India as a global hub for green cooling manufacturing,” said Auguste Tano Kouamé, the World Bank’s Country Director in India. “The report suggests a sustainable roadmap for cooling that has the potential to reduce 300 million tons of carbon dioxide annually by 2040.

Recognizing this challenge, India is already deploying new strategies to help people adapt to rising temperatures. In 2019, it launched the India Cooling Action Plan (ICAP) to provide sustainable cooling measures across various sectors, including indoor cooling in buildings and cold chain and refrigeration in the agriculture and pharmaceuticals sector and air-conditioning in passenger transport.  Its aim is to reduce the demand for cooling by up to 25 percent by 2037-38.

The new World Bank report proposes a roadmap to support the ICAP’s new investments in three major sectors: building construction, cold chains, and refrigerants.

Adopting climate-responsive cooling techniques as a norm in both private and government-funded constructions can ensure that those at the bottom of the economic ladder are not disproportionately affected by rising temperatures. The report suggests that India’s affordable housing program for the poor, the Pradhan Mantri Awas Yojana (PMAY), can adopt such changes on scale. This could benefit over 11 million urban homes and over 29 million rural houses that the government aims to construct.

The report also recommends private investments in district cooling technologies. These generate chilled water in a central plant which is then distributed to multiple buildings via underground insulated pipes. This brings down the cost for providing cooling to individual buildings and can reduce energy bills by 20-30 percent compared to the most efficient conventional cooling solution.

To minimize rising food and pharmaceutical wastage during transport due to higher temperatures, the report recommends fixing gaps in cold chain distribution networks. Investing in pre-cooling and refrigerated transport can help decrease food loss by about 76 percent and reduce carbon emissions by 16 percent.

India aims to phase out the production and use of ozone-depleting hydrochlorofluorocarbons, used as coolants in air conditioners and refrigerators by 2047. The report recommends improvements in servicing, maintenance and disposal of equipment that use hydrochlorofluorocarbons, alongside a shift to alternative options with a lower global warming footprint. This can create 2 million jobs for trained technicians over the next two decades and reduce the demand for refrigerants by around 31 percent.

“The right set of policy actions and public investments can help leverage large scale private investment in this sector. We recommend that these moves be accelerated by creating a flagship government mission to address the challenges and opportunities from rising temperatures in India,” say the authors of the report, Abhas K. Jha, Practice Manager, Climate and Disaster Risk Management, South Asia and Mehul Jain, Climate Change Specialist, World Bank.

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Pandemic Recovery Efforts Trigger New Energy Access Policies

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Two years of pandemic have highlighted the vulnerability and isolation of populations without electricity and have prompted countries to increase their focus on energy access and affordability, finds a new World Bank report on energy policies and regulations. The 2022 edition of the RISE (Regulatory Indicators for Sustainable Energy) report shows that many countries have embedded new policies to improve their energy independence and minimize energy costs in their COVID-19 recovery plans.

“Confronted with multiple crises, now more than ever countries are recognizing the urgency of connecting their populations to sustainable, affordable and resilient energy sources,” said Riccardo Puliti, World Bank Vice President for Infrastructure. “Clear policy frameworks and planning enable governments to map out their energy strategies and to provide the predictability and transparency needed to attract investments.” 

According to the bi-annual report that evaluates energy policies and regulatory frameworks across a set of indicators, the pandemic  was a strong trigger: nearly half of the 140 surveyed countries in each region included new policies to minimize disruptions to electricity access, quality, and affordability in their COVID-19 recovery packages.

Many governments improved their electricity access policies, with Sub-Saharan Africa and Latin America and the Caribbean scoring the highest on this indicator. This included the two largest energy access-deficit countries—Nigeria and Ethiopia— which showed noteworthy progress thanks to policy and regulatory measures on electrification planning, frameworks for mini grids and off-grid systems, and consumer affordability of electricity.

And the number of countries with advanced mini-grids policy frameworks more than doubled between 2019-2021, reflecting how mini grids and solar home systems are now widely viewed as sufficient substitutes for grid extension. Over 40% of countries surveyed offered publicly funded financing options to secure funding for mini-grid operators. This had a positive effect on the cost of off-grid electricity, as the unsubsidized levelized cost of mini-grids fell by a third, from US$0.55 per kilowatt-hour (kWh) in 2018 to US$0.38 per kWh in 2021.

Meanwhile, with renewable technologies becoming cost-competitive with traditional baseload energy sources over the last decade, many countries phased out incentives to compensate for renewable energy production. Tax reduction is now the most prevalent renewable energy fiscal incentive in place to attract large-scale corporate investments, with half of the countries surveyed offering tax reduction incentives for renewable energy projects.

Finally, the report found that energy efficiency policies were not receiving adequate attention despite unprecedented energy price hikes, with 49 countries showing little to no advances on energy efficiency policy frameworks.

Every two years, the Regulatory Indicators for Sustainable Energy or RISE report measures policy progress in 140 countries, representing over 98 percent of the world population, on renewable energy, energy efficiency, electricity access, and access to clean cooking – the four target areas of Sustainable Development Goal 7 (SDG7) on access to affordable, reliable, sustainable and modern energy for all by 2030. RISE 2022: Building Resilience is the fourth edition of the report. The report is published by the World Bank with funding from the Energy Sector Management Assistance Program (ESMAP). The full report, along with detailed country profiles and previous editions of the report, is available at https://rise.esmap.org/

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