Study: Digitization brings more employment

Author: Osman Cetinkaya
Date: 20.05.2019

No slump in employment expected

According to a study by the German Institute of Economics (IW), digitization will not lead to massive job cuts. On the contrary: highly digitized companies hired more people on average last year than less digitized companies. Companies that are intensively involved in digitization and increasingly use the Internet for their business activities are considered to be heavily digitized.

Between 2015 and 2017, around 62 percent of the highly digitized companies hired more employees. Companies where digitization was less established hired only 44 percent more. The study results are based on data from the IW personnel panel, an annual survey conducted by the IW with around 1,200 participating personnel managers and managing directors from German companies.

According to IW study author Oliver Stettes, the popular hypothesis that the use of robots leads to job cuts cannot be confirmed. The survey also shows that the number of highly qualified academics who often work at internet workplaces is 7.7 percent higher in highly digitized companies than in less digitized companies.

However, this development differs from company to company. While in the information economy and in knowledge-intensive services the degree of digitization and the number of employees had risen proportionally, employment in the banking and insurance sectors as well as in the energy and water supply sectors had declined despite progressive digitization. Most of the growth in trade, healthcare, transport and logistics was caused by assistants who do little digital work.