The Potential Employment Implications of the Fourth Industrial Revolution Technologies: The Case of the Manufacturing, Engineering and Related Services Sector

In this paper we examine the potential employment displacement effects of technologies related to the Fourth Industrial Revolution (4IR) on the MER sector, by observing this risk through the lens of the task content of occupations or the routinisation hypothesis. We use network analytics to develop a MER sector occupation space, which shows the occupational structure of the MER sector labour force. Given the occupational structure of the sector, we identify occupations at high risk of displacement – i.e. what tasks, and hence what occupations, are most at risk of being automatated, computerised or digitised. Drawing on household survey data, we explore the characteristics of workers who occupy these high risk occupations in an attempt at identifying a typology of individuals most likely to be deleteriously impacted on by 4IR technologies. Three implications emerge: Firstly, technology induced employment displacement is likely to jeopardise low- to medium-skill employment in the production cluster occupations, and correspondingly result in an increase in relative demand for semi- and high-skilled nonproduction cluster occupations. Second, the non-random distribution of high risk occupations across the two clusters of the occupation space suggests that the skill transition to shift workers from high to low risk occupations is long, and in the event of substantial uptake of employment displacing technologies across the sector, technological unemployment is that much harder to mitigate. Third, the relatively high employment share associated with high risk occupations in the production cluster indicates that the potential displacement effects resulting in technological unemployment are likely to be substantial.