The future of work: Switzerland’s digital opportunity
New technologies can give Switzerland’s economy a much-needed productivity boost, but bold digital transformation and skills development are imperative.
Digital technologies, automation, and artificial intelligence (AI) could boost Swiss productivity by around one percentage point a year in the period to 2030. However, to capture that productivity bonus, Swiss companies need to undertake bold and comprehensive digital transformation, and work with governments to equip the workforce with the skills that will be in demand.
A large part of the potential boost to productivity growth may arise from the replacement of labor by recent developments in AI-based automation that offers significant opportunities to innovate and adopt new business models.
More than half of all activities today are already automatable by adopting and adapting current technology. Typical technology adoption curves suggest that at least half of that potential could be realized by 2030, and possibly more if a technology race materializes. Using conservative assumptions and an average or midpoint scenario based on technology benchmarks, about one-fifth to one-quarter of all tasks performed in Switzerland’s labor market—equivalent to 1.0 million to 1.2 million jobs—could be automated by 2030. This estimate draws on McKinsey Global Institute research on the future of work. Overall, 46 percent of hours worked in Switzerland today have the potential to be automated by using currently available technology. This is slightly below the global average of 50 percent.
The activities that are most susceptible to automation include predictable physical tasks as well as the collection and processing of data. These three activity categories make up 50 percent of working hours in Switzerland and, in each case, their automation potential is greater than 60 percent.
Job displacement is a regular feature of modern labor markets, but the pace of change could double. However, this does not necessarily mean that there will be net job losses in Switzerland (Exhibit 1). Activities equivalent to 400,000 new jobs could be created that are linked to technology itself (hardware/software), and companies implementing digital solutions. Another 400,000 job equivalents could be created as automation and AI drive real income growth, boost consumption, and increase demand for domestic employment, feeding into more economic growth.
There is major uncertainty about the shape of future demand for a small open economy like Switzerland, but even more jobs could be created if digitization were to increase the competitiveness of export sectors. Over the past 15 years, Switzerland has expanded its exports from approximately 50 to 65 percent of GDP. Net exports grew from about 6 to 11 percent of GDP. The largest categories of exports today are chemicals and pharmaceutical products; machines, appliances, and electronics; watches and precision instruments; financial services; and tourism. Assuming Switzerland can adopt digital technologies rapidly and increase its global competitiveness and exports, in an illustrative scenario some 20,000 to 70,000 jobs could be created. Today, around 1.4 million jobs in Switzerland are dependent on the exports of the top six exporting sectors.
The impact on sectors will differ (Exhibit 2).
