Digital Jobs in Moldova The World Bank Group1 September 2018 0 Executive summary ................................................................................. 1 1 Introduction ............................................................................................. 2 2 Global trends: Looking to 2030.............................................................. 2 3 Digital jobs in Moldova: Opportunities, and constraints ..................... 5 4 The risks from digitization for Moldova into the future .................... 13 5 Ideas for today and tomorrow.............................................................. 22 6 Conclusion .............................................................................................. 28 Figures: Analysis of the risk of automatability ............................................... 30 Annex 1: Methodology to estimate the effect of automation of employment ........................................................................................................ 32 Annex 2: Examples of education and teaching approaches ............................ 35 1 This policy note was prepared by a team led by Siddhartha Raja (Digital Development Specialist, World Bank), and including Veronica Midari (Consultant), Bilal Khan (Consultant), and Stela Leuca (Consultant). Corresponding author. Email: sraja2 (at) worldbank (dot) org. All opinions and any errors are the sole responsibility of the authors. 0 Executive summary Digital technologies (the internet, artificial intelligence, robotics, drones) have either already become widely used, or are expected to diffuse in ways that will fundamentally change how businesses and economies operate. Could and how might Moldova take advantage of these changes? As this report presents, Moldova has an opportunity to position itself to take advantage of technological change and the ongoing digital transformation. Public policies and programs that are well defined and implemented can help here, by helping to create more, better, and more inclusive digital jobs. This opportunity arises from the vibrant, even if relatively small ICT industry in Moldova. An active private sector, with Government support, has done well to create about 22,000 jobs and steadily increase IT and IT-enabled services exports over the past decade. However, we also find that the dialogue has focused on the digital industries at the expense of the wider digitization of the economy, including of businesses across the economy. We thus propose to look at digital jobs with a wider lens: including jobs in the ICT industry (created by the production of ICT such as IT software and services, telecommunications, etc.), but also including jobs created or influenced by the digitization of sectors across the economy (e.g. in banking, tourism, agriculture, government, etc.). They could be jobs in firms or represent work done by individuals. Hence, digital jobs created by: (i) firms in the ICT industry; (ii) firms across sectors that digitize, and (iii) self-employed individuals engaged in digitally-enabled work. In brief, our analysis finds that the first of these has been getting most of the attention in Moldova, while the second and third sources of jobs are still nascent. This means that the future potential of digitization to create jobs in Moldova is not fully realized, primarily due to the low level of digitization of the economy beyond the core ICT industry. But at the same time, that there is a risk of job losses and of significant changes in the skills demanded by employers in the coming two decades. Our analysis finds that about 14 percent of jobs might be automated away, and critically, that about 60 percent of jobs might see significant change in the composition of tasks performed, and hence skills needed (due to digitization), for which workers seem unprepared. There is little consensus globally about what can be done to respond, beyond proposing two basic principles: investing in skills, and promoting the adoption of those technologies. Workers who have an appropriate mix of skills, ranging from the foundational skills (e.g. literacy, numeracy) to more advanced soft skills (e.g. critical thinking, teamwork), and technical skills will likely be better prepared to face technological change. And even though digital technologies might pose challenges to employment, they are also the means for economies to remain and become more productive and competitive. Our analysis highlights three overall messages, building on these basic principles: Continue support to the digital industries, including to make it more inclusive and promote innovation and entrepreneurship; Do more on digital literacy and skills beyond the IT industry, for today’s workers and for tomorrow’s workforce; and Accelerate the digitization of businesses across the economy to capture the benefits of increasing productivity, access to markets, and innovation. Implementing these means moving along three directions of work to position Moldova better to take advantage of digital technologies and the changes they will enable: investing to prepare the workforce of the future, prepare firms for the digital futures, and promoting digital employment among individuals. The report closes with a discussion of what such programs could look like, based on international examples and emerging best practices. 1 1 Introduction job losses are the highest. Based on this analysis, we identify possible responses to prepare both Moldova’s businesses and its Digital technologies (e.g. information workforce for these changes. technologies, telecommunications, robotics, AI) are reshaping economic opportunities for individuals, businesses, and countries 2 Global trends: Looking to globally. The improving capabilities of these technologies and their increasing 2030 adoption globally may lead businesses to This section considers the global automate some tasks or jobs, or shift work technological trends that could influence to new locations. This could imply job or economic prospects for Moldova, and then wage losses, but also shifts in the patterns discusses the status quo of digital of global trade. It is also these technologies technologies’ adoption in Moldova. that create opportunities for individuals and businesses: they reduce transaction We frame this analysis in the context of a costs, connect firms and individuals to each digital future for Moldova, considering the other and to markets, enable innovation, period until 2030 at least. This is because and support improvements in productivity. the extent of digitization of the economy — In sum, technological change will affect and of every occupation — will likely only different businesses, individuals, and grow during the coming decades, and that economies differently, depending on their the futures of the workforce is already level of preparedness. being determined. As a small, open economy with a declining Consider the following: a child starting population, Moldova would need to kindergarten in 2018 will be entering the consider steps that prepare it, its workforce workforce in the late 2030s, and working at — of today and of the future –, and its least until the 2070s. The educational and businesses for this uncertain future. This skills development choices available to her report presents the results of an analysis of today, through systems built based on what Moldova could do to prepare for (and curricula and methods from the 20th take advantage of) the increasing century, will shape their and their country’s digitization of economic activities across futures over the coming many decades, sectors in and outside Moldova. It points to exactly when the technologies we consider some of the directions that could be “futuristic” today (artificial intelligence, integrated into upcoming programs, self-driving vehicles, 3D printing) may be financed by development partners, or widespread.2 considered for action by the Government. The report has three main sections. It Technological change and begins with an overview of the ways in work which digitization is influencing employment, globally and within Moldova. Recent analyses have suggested that It then speculates about how Moldova technology could automate or change some might experience digitization in terms of tasks within occupations, and hence, the risks due to automation (as caused by workers would see significant changes in digital technologies), identifying the task-content of their jobs.3 Other analyses occupations and sectors in which risks of have found that labor markets are 2 http://www.oxfordmartin.ox.ac.uk/downloads/acade Consider, for instance, that the internet became publicly available in the early 1990s, and as of 2018 mic/The_Future_of_Employment.pdf; Arntz, M., T. connects over half of the world’s population. Or that Gregory and U. Zierahn (2016), “The Risk of mobile telephones serve over 5 billion people now, 40 Automation for Jobs in OECD Countries: A Comparative years after their commercial introduction in Japan. Analysis”, OECD Social, Employment and Migration 3 Carl Benedikt Frey and Michael A. Osborne, The Working Papers, No. 189, OECD Publishing, Paris. Future of Employment: How Susceptible Are Jobs to http://dx.doi.org/10.1787/5jlz9h56dvq7-en Computerisation? 2013, p. 44, available at: 2 Table: The Dimensions of Technology’s Impact on Jobs Positive effects Negative effects Access to markets and resources, due to Susceptibility of today’s jobs increases, improved connectivity; helps firms grow due to automation, as machines can take Quantity of jobs and create jobs, or attract work to new on more tasks, or due to innovation markets that are more competitive. reshaping industries and firms. Product innovations, created and The nature of jobs changes, as distributed using various technologies; technology reshapes and alters give rise to new industries, firms, and connections among workers, work, and jobs. employers. Productivity increases due to the Workers bear more risk, as connectivity augmentation of workers’ capabilities reorganizes where work is done and by through automation; leads to related whom, diffusing the traditional formal Quality of jobs increases in wages, and improvements employer-worker relationship. in working conditions. Wages stagnate or fall, as technology allows employers to automate or trade more tasks; this could lead to wage polarization and inequalities depending on task content of jobs. Inclusion of previously disconnected Exclusion or lagging participation Distribution workers, as connectivity and automation occurs, as workers, employers, and of jobs lowers search costs and helps workers economies could suffer missed overcome physical and social barriers; opportunities and degrading allows firms to overcome skills competitiveness. constraints to grow, creating jobs. Source: Raja & Christiaensen, Digital Technology and the Future Of Work, World Bank, 2017 polarizing, that wage growth might be internet) or of creation (e.g. 3D printing); stagnating, and that middle-skill jobs are see Box for a discussion of these technology being automated away or are being types. outsourced.4 Drivers of impact But the outcome of technological advancement and adoption do not need to The foregoing shows that the effects of be negative. Indeed, there are significant technological change will not be one- benefits to be had from increasing dimensional. Rather, much will depend on innovation, productivity, and connectivity how technology diffuses — among firms and that result from the increasing use of individuals within an economy, and across technology (see Table). These benefits can economies — and on the social and be greater if the analog complements of economic context within which those these digital tools – rules, skills, changes occur. Outcomes would depend on institutions, and complementary factors such as “the extent of technology infrastructures (e.g. logistics) – will also diffusion, the demographic composition develop.5 Moreover, much of the discussion (aging versus youth bulges), the enabling about technological change and its business environment (skill mix, supportive implications for work have focused on infrastructure and institutions), the technologies of automation, while they have not considered as deeply the implications of technologies of connection (e.g. the 4 labor markets.” The Economic Journal 125.584 (2015): Autor, David, H., David Dorn, and Gordon H. Hanson. “Untangling trade and technology: Evidence from local 621-646 5 World Bank, World Development Report 2016 3 Box: Technological change is about more than just automation A range of digital technologies has made their way into our homes and workplaces. These can be broadly classified into three types of technologies: automating, connecting, and creating. While automation (which includes robotics and AI) could substitute human effort in some tasks, connecting technologies (such as the internet) network and distributing work in ways that have varying implications for businesses and individuals. Finally, some digital technologies enable human creativity, which could create or transform sectors and firms through product innovation.1 These are described in the Table below. Table: Different capabilities of technologies and their implications for employment Technology type & trend Employment trade-offs Examples Machine effort Labor productivity 98,900 robots were installed replaces human increases; but labor may in the automotive industry Automating effort; the be augmented by or worldwide in 2014; IBM’s capability of substituted by capital; Watson computer assists machines is workers with skills to oncologists to diagnose lung increasing to create and use these cancer; AI systems are cover a wider machines benefit, while replacing call-center workers range of tasks others might lose out in some tasks Networks connect Productivity increases; Mobile phones ease farmers’ over five billion information gaps reduce; access to market information, Connecting people globally, collaboration and improving earnings; ‘car reducing distribution of work is sharing’ services link riders transaction costs possible; work could be with underutilized drivers but and enabling displaced due to may put traditional taxis out access to competition within or of work information across markets Digital tools allow Product and process 3D printing helps humans to create innovation potentially manufacturers cut prototyping Creating and test new creating new sectors, and testing costs; computer objects and ideas, firms, and jobs, but could animation has created 80,000 reducing the costs also make some jobs jobs in India and 64,000 jobs and risks of redundant in the U.S. but displaced innovation traditional animator jobs Source: Author analysis. reigning labor market regulations, and the displace jobs) in a significant or trading environment.”6 transformative manner.7 Moreover, the divergences across high- and There are such differences within medium-and-low-income countries in countries; major cities and towns are often technological adoption and use reflect and better connected and with more skilled reinforce divergence in other key workers than rural or remote communities. socioeconomic development indicators, Divides in access to technology and skill including access to finance, to core utilities levels also appear across different (e.g. electricity), skills acquisition, and demographic groups. As the World Bank’s social protection schemes (see Figure on World Development Report for 2016 next page). Without these complementary (WDR16) shows, there is a higher likelihood and analog foundations, digital technologies that rural and remote communities, will not accelerate development or change women, people with disabilities, social and how businesses function (or create or 6 7 Raja & Christiaensen, Digital Technology and the See World Bank, World Development Report 2016: Future Of Work, World Bank, 2017 Digital Dividends (henceforth WDR16), Overview (Chapter 0) 4 Figure: Comparing HICs with MICs & LICs on enabling environment 100 100 75 83.2 69 64.2 50 43 25 54.8 21.9 155 28 23 79 18 0 Availability of Business climate ICT adoption by complementary technology by Coverage of social Infrastructure: e.g. electricity Adoption of businesses individuals protection programs skills High income countries Middle and low income countries Source: Authors’ analysis based on World Bank data, c. 2016 ethnic minorities, and older people lag in for affected individuals or create access to and use of digital technology. 8 opportunities for the workers of the future.10 Coincidentally, these are the very groups that could benefit significantly from being The history of technological progress in the able to access digital tools. Similarly, many past few centuries suggests that some businesses in rural and remote areas cannot workers will bear the costs, but that overall access these technologies. Unconnected economic growth and job creation will workers and employers are unable to access continue.11 In sum, while technological the various e-payment systems, online work advances and their adoption could lead to platforms, or even e-commerce services some jobs being lost and other jobs that those in connected areas might take for changing, there is scope to adapt (as we granted. discuss later). However, the implications of lagging in adoption are probably more But there is an important message here: the taxing in the long term. slow adoption of technology might have a short-term benefit in that firms might not automate away many skills, tasks, or even 3 Digital jobs in Moldova: jobs. However, the risk is that those Opportunities, and economies and firms that do not adapt will end up being less competitive than those constraints who do (e.g. the larger firms, more advanced economies). They will be limited Digital jobs include jobs in the ICT industry (created by the production of ICT such as IT in their scope or scale or be rendered non- software and services, telecommunications, competitive. Moreover, the possibility of innovation, which would lead to growth and etc.), and those created or influenced by the job creation, will be restricted given the digitization of sectors across the lower likelihood of low-technology firms economy (e.g. in banking, tourism, agriculture, government, etc.). They could innovating.9 And such innovation will drive be jobs in firms or represent work done by the economic growth that funds safety nets 8 10 See WDR2016, Chapter 2 https://www.technologyreview.com/s/603465/the- 9 relentless-pace-of-automation/ Branstetter, Drev, Kwon, Get With the Program: 11 Software-Driven Innovation in Traditional Mokyr, Joel, Chris Vickers, and Nicolas L. Ziebarth. Manufacturing, NBER Working Paper No. 21752, 2015. "The History of Technological Anxiety and the November 2015 Future of Economic Growth: Is This Time Different?" Journal of Economic Perspectives, 29 (3): 31-50. 5 Figure: Net exports of information, computer, and telecommunications services (per capita, in current US$) $100 $75 $50 $25 $0 -$25 Armenia Belarus Georgia Moldova Romania Ukraine 2005 2010 2015 Source: World Trade Organization individuals. These are jobs created by: (i) This has contributed to job creation, firms in the ICT industry; (ii) firms across especially in the services sector. About sectors that digitize, and (iii) self-employed 22,000 people work in the ICT sector, and individuals engaged in digitally-enabled the various public and private sector work.12 In brief, our analysis finds that the stakeholders believe that more jobs can be first of these has been getting most of the created in the coming years. The IT attention in Moldova, while the second and industry alone employs about 7,000 third sources of jobs are still nascent. workers, and half of those work in the software industry. 13 Consulting firm IDC Hence, the potential of digitization to create found that “Moldova is particularly well jobs in Moldova is not fully realized, and positioned for core activities, such as web this is primarily due to the low level of development and basic coding, and high- digitization of the economy beyond the core value activities, such as analysis and design ICT industry. Box on page 7 provides a and software development and testing.” 14 summary comparison of Moldova with Many of these jobs are available for well- regional peers, of some of the key aspects paid, highly skilled workers. of digitization related to the discussion in this report. Opportunities for growth are present; the EU-Moldova Association Agreement could Firms in the ICT industry help to grow trade links, and the country is starting to receive attention from global Moldova’s ICT industry has evolved rapidly industry analysts. Many stakeholders over the past decade. WTO data shows that (public and private) agree that there is Moldova’s net exports in telecoms, potential for employment within the IT computer, and information services have industry to more than triple over the next reached US$78m in 2016. These exports decade, if infrastructure (e.g. IT parks), the have more than doubled on a per-capita business climate, and skills training basis over the past decade, but there is programs keep up. Various actors have scope for further growth when compared launched initiatives to grow labor demand with regional peers (see Figure). 12 13 These individuals could be working for firms or Stakeholder interviews; ATIC 2016; IDC 2015 14 other individuals located in or outside Moldova. For IDC, Moldova Moving into the Premier League of IT example, in ride-sharing services serving other Nearshoring, March 2015, page Moldovans, or doing graphic design for employers located elsewhere. 6 Box: Comparing Moldova’s ICT sector with regional peers Azerbaijan Lithuania Moldova Romania Armenia Ukraine Georgia Finland Estonia Ireland Latvia Availability of latest 4.4 5.0 5.8 6.6 4.3 6.1 5.8 5.8 4.4 4.6 4.3 technologies, 1-7 (best) Venture capital 2.5 2.7 3.5 4.5 2.2 3.2 2.9 3.0 2.1 2.4 2.4 availability, 1-7 (best) Individuals using 46.3 61.0 84.2 92.4 48.9 79.7 75.8 72.1 46.6 54.1 43.4 Internet, % Households w/ personal 51.5 51.7 82.5 91.9 45.8 84.0 73.5 68.1 52.4 63.8 52.4 computer, % Households w/ Internet 46.6 54.6 82.9 89.8 41.0 82.2 73.4 66.0 47.5 60.5 43.0 access, % Fixed broadband Internet 9.1 19.9 28.9 32.3 12.2 26.9 24.7 26.7 14.7 18.5 9.3 subscribers/100 pop. Mobile broadband 34.2 61.5 117. 138. 21.8 81.0 61.2 63.4 49.4 49.4 7.5 subscribers/100 pop. 0 5 Firm-level technology 4.1 4.7 5.4 5.8 4.2 5.6 5.0 5.4 4.1 4.4 4.2 absorption, 1-7 (best) ICT use for business-to- 4.7 5.2 6.0 5.9 4.6 5.4 5.4 5.8 4.2 4.5 4.4 business transactions, 1-7 (best) Impact of ICTs on 4.5 4.8 5.6 5.9 4.0 5.6 4.8 5.2 3.8 4.2 3.8 business models, 1-7 (best) Knowledge-intensive 26.9 23.4 42.7 45.2 22.2 40.3 39.6 42.6 28.7 21.5 33.7 jobs, % workforce Source: World Economic Forum, 2017 and supply, with the hope that Moldova’s space. For example, it has recently set up digital economy, including both the firms ‘Tekwill’, an IT industry center of that produce ICT goods and services and excellence. Another IT Park, promoted by a ICT users in other sectors (e.g. financial private company, with donor support, is services, healthcare, tourism, government), also being established.15 can contribute to the job creation that Moldova needs to continue sustainable However, Moldova has some weaknesses economic growth. that could hold it back, especially when one might compare its position on various This growth has been due to a vibrant and dimensions vis-à-vis regional peers (see organized private sector, and due to Box). support from the public sector. Moldova’s active ICT industry association, the For example, many stakeholders note that a Association of Information and limited talent pool is a major constraint on Communications Technology Companies the growth of established firms in the ICT (ATIC) has been a significant player in this sector. IT industry representatives note 15 up a sophisticated IT park in Chisinau (expected to This facility has been set up with support from various development partners and from the begin operations in early 2018). Together, these types Government. This is part co-working space, part of facilities have the potential to provide the training center, part exhibition space. It has the appropriate facilities and physical environment for potential to become a hub for innovation and digital startups to locate and grow. As these are entrepreneurship in the sector. It already hosts many entirely or partly private initiatives (or seek to be digital startups, and is expanding. Another private commercially sustainable), they have some of the basic initiative – led by a local ICT company and with elements seen before as critical for success. financial support from the US Government – is setting 7 that it is getting more difficult for firms to through tax incentives, new IT parks, and find talent in Moldova. And they speculate training programs for specialists. The that the problem will get worse as Parliament has recently approved a new technological change accelerates, shifting “startup visa law,” which simplifies access client demand and hence skills needed. to Moldova’s labor market for highly There are growing concerns that many qualified IT specialists. But private sector qualified (especially young) professionals stakeholders remain unsure about its are leaving the country; some digital firms acceptance by international workers. The estimate that half of the technical staff that Ministry of Economy and Infrastructure is have left their jobs over the past few years defining new ICT industry competitiveness have left the country. Limited supply is also roadmap (for the period until about 2023), manifested through anecdotal evidence that and a significant focus is - apart from many companies engage in “poaching” of IT improving infrastructure – on capacity professionals from other firms; this could development, the business and startup also drive up wages. ecosystem, and investment promotion. 16 There is realization of the need to address The education ministry is also working to the skills constraint. But few local upgrade the ICT curricula and companies invest in training their existing infrastructure in schools, and seeks to staff, either due to limited means or limited develop human capital. The number of interest. Efforts by the private sector graduates in ICT related fields – about coordinated by ATIC, and supported by the 6,500 annually – are also higher as a share Government are seeking to remedy this. For of graduates compared with regional peers, example, the Tekwill facility also host such as Bulgaria, Hungary, or Romania. training programs – organized by the However, the share is smaller than the EU industry association – for those who seek or OECD average. Employers and industry trainings and certifications, for up to 1,000 representatives are critical of the quality of people a year. It will also host startup many of these graduates and the relevance acceleration and events. These trainings are of their skills to industry requirements.17 also directed towards newer technologies Some policy restrictions also limit the and trends. potential for improved industry-academia collaboration. For example, IT industry Discussions with stakeholders suggest that professionals are not formally allowed to recent years have seen a rapid increase in teach at universities (even part time) the number of digital startups being set up unless they have advanced degrees and in Moldova. The Tekwill facility is starting pedagogical certification. And concerns to become a hub for startups, and ATIC remain that a focus on improvements in believes that there is scope for many more higher education alone cannot make up for companies to emerge in the coming years the weaknesses in primary or secondary around financial services (‘fintech’) or in schooling; efforts are increasing to expose gaming, for instance. Interviews with younger students to digital technologies, stakeholders also suggest that supporting but these are yet ad hoc and not fully IT professionals and graduates to set up integrated into the curriculum or teaching businesses in Moldova could encourage system (we return to this subsequently). them to remain in the country. Hence, we find that the Government, with The Government has been responsive, and the support of donors, and coordinating with aims to promote growth of the IT industry the private sector, has begun to address 16 Based on discussions and draft documents provided equipment and software and teaching staff who often by the MITC do not meet international standards. Those problems 17 For instance, a 2013 analysis of Moldova’s ICT sector are aggravated by a serious lack of practical found that, “the lack of skilled staff is a quality not a experience in higher and vocational education.” See quantity problem. The education system produces German Economic Team Moldova, Realising the enough IT graduates; however, their skills do not Potential of Moldova’s Information Technology Sector, match the demand of employers. This is due to 2013, page 12. outdated curricula, lack of access to modern 8 some of the gaps on both the demand and banking, tourism, agriculture). What is supply sides. For example, there are plans to available suggests that Moldova’s support more digital startups, and offer businesses lag in the use of digital them financial and technical support to technologies. For example, only about 60 grow. Plans are also in development to percent of Moldova’s firms (survey included extend the Tekwill model to other cities, to 360 formal firms with 5 or more make the digital economy more inclusive. employees), of those surveyed in the most recent Enterprise Survey, have websites or ICT use by firms across use e-mail to transact business. This compares poorly with other European sectors countries, such as the Czech Republic (over 90 percent) or Poland (over 80 percent). 19 And apart from workers, technological See Figure. changes imply challenges for firms. If they are to sustain growth, Moldova’s firms — Digital engagement by individuals – which especially exporting firms across sectors — can drive business’ adoption of digital – is would need to invest in and upgrade their also relatively low. For example, one technology to remain competitive. Indeed, analysis by the U.S. International Trade recent research by the World Bank has Administration notes that “E-commerce is found that developing countries face the still in its infancy, with a few merchants increasing possibility of losing out on offering this option in Moldova and a few productivity gain due to lagging innovation Moldovans used to ordering on-line.”20 This – including adoption of technology – due to means that Moldova’s firms are losing out missing managerial capability and weak on the opportunity to access new markets enabling environments.18 through tools such as e-commerce. There is little data available on the Limited adoption of digital technologies by ‘horizontal’ use of digital tools and firms across the economy implies another technologies across other sectors (e.g. missed opportunity apart from those of Figure: Percentage of firms having their own websites, compared with internet use by individuals 90 80 70 60 50 40 30 20 10 0 Individuals using the Internet (% of population) Percent of firms having their own Web site Source: World Bank Enterprise Surveys (firm data, c. 2016), World Development Indicators (Internet use data, c. 2016) 18 19 Cirera, Xavier; Maloney, William F. 2017. The Innovation Paradox : Developing-Country Capabilities http://www.enterprisesurveys.org/data/exploretopics and the Unrealized Promise of Technological Catch-Up. /innovation-and-technology Washington, DC: World Bank. © World Bank. 20 https://www.export.gov/article?id=Moldova- https://openknowledge.worldbank.org/handle/10986/ eCommerce 28341 9 productivity or access to markets: a lower education, to 2 percent in agriculture, likelihood of digitally-enabled product forestry and fishing. innovation. Given the unpredictable nature of such innovation, it is difficult to predict The potentially lower level of ICT adoption its likelihood or effects in Moldova, yet, in the economy is also reflected in the share there is potential for product innovation to of ICT goods imports as a share of all good drive job creation in the long run. 21 And imports. See Figure. Moldova has one of the there is scope for product innovation to lowest shares among comparator countries, emerge as a driver of economic growth and and is significantly lower than Central job creation in Moldova. A 2017 survey by European and Baltic averages, at about a the National Bureau of Statistics has found third since 2010. that about nine percent of surveyed enterprises reported making some type of Global indices do suggest that Moldova’s product innovation. Half of all were in the readiness to engage in the global digital manufacturing sector and again half were economy has improved slightly in recent in Chisinau. Seven percent of innovative years. In 2012, Moldova ranked 78, with a enterprises were in the information and score of 3.78 in the World Economic communications services sector.22 Forum’s Network Readiness Index (measuring the propensity for countries to Estimates based on data from the National exploit the opportunities offered by ICT, out Bureau of Statistics of Moldova suggests an of a maximum of 7). In 2016, Moldova was even lower level of technological diffusion. ranked 71 of 139 countries with a score of As indicated in Table, only about four 4.0. The country’s score on skills over that percent of the legal entities—the survey time has remained flat at about 5.03, but included 6,500 enterprises with 10 and Moldova’s ranking globally fell from 65 to more employees and turnover more than 3 70. million Lei—have webpages (as of 2016). There is also a wide variation among firms The Government has also invested by sector of economic activity, ranging from significant effort (and resources) to digitize 52 percent in the case of entities engaged in public services and processes. This will create the foundations for future growth, Table: Legal entities that have web pages (estimate, by economic activity) Estimated among total of 53,738 legal entities 4% Agriculture, forestry and fishing 2% Mining and quarrying 5% Manufacturing 7% Electricity, gas, steam and air conditioning supply; Water supply; sewerage, 10% waste management and remediation activities Construction 3% Wholesale and retail trade; repair of motor vehicles and motorcycles 2% Transportation and storage; Information and communication 8% Accommodation and food service activities 3% Financial and insurance activities 5% Real estate activities 0% Education 52% Human health and social work activities 11% Source: Moldova National Bureau of Statistics, c. 2016 21 82&idc=%20168; See, for example, Vivarelli, M. Innovation and employment. IZA World of Labor 2015: 154 doi: http://www.statistica.md/newsview.php?l=ro&id=588 10.15185/izawol.154 2&idc=168 22 http://www.statistica.md/newsview.php?l=en&id=58 10 Figure: Use of digital financial services 80 Used the internet to buy something online in the past year Used the internet to pay bills in the past year 60 40 20 0 Estonia Latvia Euro Lithuania Belarus Europe & Moldova Ukraine Romania Georgia Armenia area Central Asia Source: World Bank, Financial Inclusion Index, 2017 data and spur local demand, apart from net benefits. There might also be improving public service delivery. constraints on access to financing needed for these upgrades, apart from information The global evidence about digital issues such as knowing which vendors or IT technology adoption by businesses suggests firms to trust. a few challenges relevant for Moldova, which have been validated with local Individual use of the internet, stakeholders. Moldova does not have an appropriate supply of digitally-qualified and digital work workers, the ecosystem for firms to acquire and maintain digital capabilities is weak. There has been a steady increase in regular For instance, one analysis finds that use of the Internet by individuals over the business adoption of digital technologies past decade. In November 2009, 12 percent lags due to “the weak capacity of companies of survey respondents reported using the to absorb new technologies and modest Internet every day. By October 2017 this efforts to train their staff.” 23 has increased to 46 percent. More than weekly use is now reported by 62 percent In many cases, firms might not feel the of respondents. Many Moldovans also use need to absorb these innovations either due the internet to source their news; 47 Figure: ICT goods imports (% total goods imports) to low levels Source: World Bank, World in of competition their Development Indicatorspercent reported using the internet to markets or due to their low evaluation of source political information (compared to 23 ATIC, ICT Sector in Moldova: Policy White Book, 2012, page 8 11 87 percent via television). 24 Others have which have become very popular even if found that about 71 percent of the controversial, in other countries. population accessed the internet in 2016.25 When it comes to social media use, as of There are ongoing efforts to support 2017, Moldova had about 20 percent of increasing the capacity of individuals people actively using social media. This was (outside of the digital industry) to use lower than global use, which was at 37 digital tools and technologies, and the percent, or Romania at 49 percent and Government is interested in finding ways to Ukraine at 36 percent.26 expand such programs. Indeed, the Digital Moldova 2020 strategy included “Capacities But few Moldovans seemingly use the and utilization – strengthening literacy and internet for economically productive digital skills to enable innovation and purposes. For instance, less than a fifth of stimulate usage” as a pillar. Within this Moldovans (over 15 years of age) surveyed overall framework, the program sought to in 2017 reported using the internet “to buy ensure that “graduates of the educationa l something online in the past year,” and institutions have the necessary digital skills only a third “used the internet to pay bills to activate in an information society,” that in the past year.” Internet use is also “public sector employees possess digital focused in Chisinau. Data from a 2014 skills required for a competitive survey found that about half of the management,” and that “appropriate population used the Internet at that time, conditions are created for social inclusion and of that about 45 percent resided in the based on electronic services.”28 capital Chisinau. (At that time, 16 percent reported using internet banking services.)27 One notable program in this regard is “Novateca,” where the Government has On the other hand, Moldova does have a been working with IREX, an international sizeable number of “online workers” that non-profit, to position public libraries to are digital freelancers. These individuals become hubs for access to the internet and seek and do work online, working as to digital literacy training.29 The program freelancers for employers that could be covers a network of about 1,000 public located anywhere in the world. The libraries in each administrative region. Key matching of supply and demand is done aspects of this program include training online via a range of online work platforms locals on e-government and other digital (e.g. Freelancer.com, Upwork.com). As services, the training being conducted by early as 2012, estimates were that over one librarians and e-Ambassadors.30 Reports thousand Moldovans were working on just from the program suggest that surveyed one of these platforms, and earning up to visitors of these libraries have been US$20 million (which was paid in the form engaging in buying and selling products or of remittances). Reliable estimates do not services online, searching for government exist on this population of users, but or other information, and accessing public anecdotally, stakeholders have suggested services.31 that there are many such digital freelancers. However, this ‘gig economy’ Of the other initiatives in the country, one has not extended much to other services that stands out is the ‘GirlsGoIT’ program. (e.g. ridesharing or delivery services), This program “provides girls and young 24 29 Novateca is a seven-year national program https://www.iri.org/sites/default/files/wysiwyg/2017 supported by the Bill & Melinda Gates Foundation in -11-8_moldova_poll_presentation.pdf partnership with USAID. See 25 https://freedomhouse.org/report/freedom- https://www.irex.org/success-story/connecting- press/2017/moldova moldovans-digital-public-services-libraries 26 30 https://www.slideshare.net/wearesocialsg/digital- https://www.irex.org/project/novateca-global- in-2017-eastern-europe libraries-moldova 27 31 http://www.moldova.org/en/1-7-million-moldovans- http://novateca.md/en/impact/stats- use-internet/ reports/reports-and-surveys 28 https://www.itu.int/en/ITU- D/Cybersecurity/Documents/National_Strategies_Rep ository/Moldova_2013_strateg_857_en.pdf 12 women with entrepreneurial start-up, One specific policy constraint to focus on digital tech and IT skills and encourages may be to simplify or expand the eligibility them to pursue a career in IT, long a male- of industry specialists to teach in the formal dominated sector in Moldova.” Started in education system. While these specialists 2015, this program – supported by UN might not be full-time staff in the Women, Moldova’s eGovernment Center, universities, for example, part-time ATIC, and others – trains a cadre of participation in industry-oriented seminars ambassadors from different districts of the or courses will help expand the pool of country who then set up local chapters. The experienced faculty, in line with idea is for each of these ambassadors – and international practices, and bring real- then the local chapters – to build their world experience into the classroom. capacity and skills to identify specific challenges in their communities and work The demand-side of the labor market also on technology solutions that could address has some gaps. For one, job creation — in them. Yet, women remain less present in the digital industry but also more broadly the ICT sector, with the share of women across the economy — has not been employees being eight percent less than the inclusive, with it benefiting mainly the proportion of economically active women. 32 capital Chisinau. There is an opportunity to scale up existing programs to cover new Analysis of opportunities, and locations (e.g. there is interest in opening Tekwill-type facilities in other cities) or challenges today more beneficiaries. Furthermore, there seems to be an absence of support to digital We can make a few observations based on startups in Moldova in terms of financing the foregoing. On the supply side, most of or technical support. And, complementing the ongoing efforts to develop digital skills the focus of skills development initiative on are focused on the IT/digital industries, the IT industry, there is little effort to rather than building broader digital accelerate digitization of firms in other readiness of all workers. The IT industry sectors. has been more responsive to short- to medium-term needs, as one might expect given their incentives. The programs 4 The risks from digitization offered by ATIC (especially hosted at Tekwill) appear to align more with the for Moldova into the future longer-term shifts in technology advances This section summarizes the results of and shifts in global trade patterns, and are analysis of the impact of digitization, seeking to be more inclusive, but need to be primarily automation, on the Moldovan scaled up to prepare a broader-based digital labor market. Currently, nearly two-third of workforce adequately. the workers are based in rural areas, employed mostly in agriculture-related We also reconfirm that the limited talent occupations. The remaining one-third of the pool could be a significant constraint on the workers – in the urban areas – are growth of the ICT sector, and indeed, might employed in more diverse sectors. Hence, already be holding it back. The output of our analysis focused on workers in urban Moldova’s universities in the ICT-related areas. fields remains constrained in terms of quantity and quality. Employers often This analysis suggests that the current complain about how job seekers are not workforce lacks certain skills that could job-ready and need significant investment prepare it for the threat of automation of in training, increasing firms’ costs. There are growing concerns about young professionals emigrating. 32 Magenta consulting, Assessment of the private engagement in creating demand-led skills ecosystem in sector skills demand and the extent of private sector Moldova: Volume 2, 2017 13 the coming decades.33 We estimate that their jobs in the future. The key about 14 percent of the jobs will be lost to competencies like advanced quantitative automation, and that nearly 60 percent of skills, presentation skills, or digital skills the jobs will see significant transformation like advanced computing skills and internet in terms of the tasks performed, implying a usage, are essential to tackle the threat of need for those workers to acquire new automation. skills.34 See Figure. However, these competencies are ranked The distribution of risk varies across relatively lower in use, even by high-skilled sectors and occupations. The risk of job loss workers (e.g. Professionals and Technician is highest among the Manufacturing sector and Associated Professionals). On the other whereas Agriculture, Forestry and Mining hand, competencies like physical prowess, may experience the biggest transformation basic quantitative skills or the ability to of jobs among the major sectors. Both low- perform repetitive tasks that are very easy skilled (e.g. Plant and Machine operators) to automate are ranked among the top in and middle-skilled (e.g. Craft and related usage by the workers (especially low- trade workers) occupations face much skilled). higher risk of job-loss and significant changes in the task-structure of the jobs. Hence, along with improving its physical infrastructure and business climate, High-skilled workers do not face significant Moldova will have to improve its human risk of job-losses, though nearly half of capital as well, for it to be competitive in them could experience significant changes the future. The scarcity of relevant skills in their work. Similarly, the threat of and competencies among the current automation also varies by the educational workforce require immediate attention attainment of the workers. The workers from the Government. Keeping in mind the with Lyceum or Gymnasium education are timeline for these possible changes — over at the highest risk of losing jobs. Even half the coming two decades — Moldova would of the workers with Higher than Secondary need to immediately start equipping today’s level of education face significant changes workers with relevant digital and soft in their workplace. skills, through short trainings, to help them retain their jobs in future. Additionally, the These results suggest that even the high- Government may need to accelerate efforts skilled or highly educated workers in to update the education system to ensure Moldova’s current labor force could lack the that the workforce of the future is skills and competencies needed to retain competitive. Figure: Proportion of Jobs at High, Medium and Low risk of Automation (2014) 0.7 0.59 0.6 0.5 0.4 0.3 0.26 0.2 0.14 0.1 0 High (>70%) Medium (30%-70%) Low (<30%) Source: Authors’ analysis. 33 The analysis in this report has focused on the urban Automation to urban workforce in Moldova. The areas due to the lack of availability of task-related data numbers presented here are estimated using Job-Based for the rural areas from the World Bank STEP surveys. approach which is more reliable as well as 34 Two main approaches, namely Occupation-Based conservative. and Job-Based, have been used to assess the threat of 14 Overview of the labor market Risk of Automation for jobs in Moldova This report uses data from the Labor Force Surveys for 2014, 2015 and 2016. Table 1 This analysis uses two data-sets to assess (see next page) suggests that the labor the potential risks of automation, i.e. the force participation rate is about 40 percent 2014, 2015, and 2016 Labor Force Survey for Moldova which is comparatively lower for Moldova (LFS) and STEP surveys for than the neighboring countries like Armenia and Georgia.36 As there are Romania (about 55 percent) and Ukraine currently no surveys that collect task- (about 60 percent).35 Table 2 suggests that related information for Moldova, this there is not much difference in labor force analysis has to rely on other countries’ data participation among male and female for the task-related information.37 Among workers. Table 3 highlights that nearly two- all the developing countries that have third of the workers are employed by an conducted a STEP survey, Georgia and enterprise and receive salary for their Armenia are of similar population size, work. Our analysis will primarily focus on share a somewhat similar economic and the risk of automation to these employees political history with Moldova, and have in the urban areas. similarities in economic structure. Although imperfect fits, they are the most similar of Looking at the distribution of employees the available countries and hence were across different sectors in urban areas, one chosen for this analysis.38 can see that nearly 80 percent of the workers are employed in the services sector The Labor Force Surveys collect detailed (Commerce and Other services), as information related to employment and indicated in Figure A on page 27. On page socioeconomic variables about the 27, Figure B shows the distribution of all randomly selected individuals across workers across major occupation groups. Moldova. As we want to focus on the High-skilled workers (Managers and workers employed in urban areas, we will Professionals) account for nearly 40 drop all other observations about those who percent of the workers whereas low-skilled are not employed by some enterprise or are (Craft and related trade workers, Plant & economically active in rural areas. Machinery operators and Elementary occupations) accounts for 25 percent of the This analysis focused on assessing the workers. Figure C (page 27) presents the threat of automation to workers in Moldova education level of the workers employed in by using the Occupation-based approach39 urban areas. Moldova has a relatively high and Job-based Approach.40 The Job-based higher literacy rate in comparison to its approach uses the variation in tasks across GDP per capita ranking. Nearly half of the different occupations to assess the threat of workers in urban areas have Higher than automation. Every job is a combination of Secondary education. many different tasks which require soft- skills – like client interaction, or interacting with co-workers, or managing workers –, 35 Labor force participation rises to about 45 percent if Nam, Yunnan (China), and Bolivia as well to perform the age is between 15 and 65 years. This also includes the same analysis to check for variations. However, many workers who might be working on the family the results were similar. farm and does not earn regular salary from their work 39 Frey, C.B. and M.A. Osborne (2013), The Future of 36 STEP (Skills Towards Employment and Productivity) Employment: How Susceptible are Jobs to survey is conducted by The World Bank to assess the Computerization? University of Oxford. supply and demand of job-related skills in the 40 Arntz, M., T. Gregory and U. Zierahn (2016),“The developing countries Risk of Automation for Jobs in OECD Countries: A 37 STEP Household survey has already been approved Comparative Analysis”, OECD Social, Employment and for Moldova, though, it will take a couple of years Migration Working Papers, No. 189, OECD Publishing, before the results are publicly available Paris; Arntz, M., T. Gregory and U. Zierahn (2017), 38 It is possible that Georgia and Armenia, having “Revisiting the risk of automation”, Economic Letters higher GDP per capita or a different distribution of 159, pp 157-160. workers, might have different task-structure than Moldova. Hence, we also used Sri Lanka, Lao PDR, Viet 15 Table: Labor market status Table: Gender distribution among the employed Table: Salaried vs Non-Salaried workers among the employed Table: Rural vs Urban among the employed and hard skills – like computational skills, On the other hand, the Job-based approach quantitative skills or physical strength. paints a relatively more conservative (and more nuanced) picture of the automation The Occupation-based approach does not threat. The Job-based approach was accommodate for the variation in task developed as the Occupation-based structure within the occupation code, approach’s results were biased upward. it whereas Job-based approach assumes that should be noted that both these approaches within the same occupation code, the are speculative in nature. The level of threat workers might perform different set of from these estimates should not be taken at tasks to perform their daily work. The face-value, rather, the more important take- Occupation-based approach hence away is the estimated relation (positive or overestimates the threat of automation, as negative) between the different tasks and it does not acknowledge the variation in the probability of automation. task-structure of the occupation. 16 Table A: Job-based vs Occupation-based Approach To highlight the difference between the two LFS observation which we were able to approaches, let us consider a simple match with STEP data. We also drop the example. The Standard Occupational unmatched observations from the STEP Classification (SOC) system code for an data.41 accountant is 13-2011. Using the Occupation-based approach, any worker Table B (next page) show the results for the who is an accountant irrespective of Job-based approach by regressing the whether they works in a small restaurant probability of automation against a set of or for a multi-national bank, their tasks usually performed by workers. 42 Thus, probability of automation is 0.94. However, Table B helps identify the tasks/skills which in order to estimate the probability of are more prone to be replaced by the automation using the Job-based approach, upcoming technologies and which are more we need to analyze the worker’s task complementary to the new technologies, structure. Table A above describes the resulting in increased productivity. It can variation in the task structure of the two be seen that the jobs which require accountants employed in different sectors physically demanding tasks or are who manage the accounts for two different repetitive in nature will be adversely types and sizes of entities. It is evident that affected (positive sign in regression) by it might be relatively easier to replace the automation, whereas jobs that require more accountant managing the books for the technical or advanced digital skills or more restaurant as compared to the accountant people-managing skills will be difficult to for a multi-national bank. When using the automate. Job-based approach, this variation in tasks will result in a different probability of Using the regression results in Table B, the automation for these two accountants. Job-based probability of automation can be predicted for each worker in the Labor As mentioned above, the LFS data does not Force Survey by using the task variables. In collect information about the tasks being order to calculate the Occupation-based used by workers in their jobs. In order to probability, we will match the four digit use a proxy for tasks being performed by International Standard Classification of workers, we will match the LFS data with Occupation (ISCO) code to the 6 digit SOC the STEP data for Georgia and Armenia. code and assign the average probability of Since STEP collects information about automation for the matched 6 digit SOC individuals between 15 and 64, we also codes. dropped all workers above 64 in LFS data. We used gender, education level (ISCED In order to compare the results, we plot the level), major industry (single digit) and the estimated kernel density for both the Job- occupation code (3 digit level) to match the based and Occupation-based approaches as tasks to workers. This will generate shown in Figure (next page). Kernel density duplication for each observation in the LFS curves show the distribution of workers at data. We randomly drop duplicates for each varying risk of automation using these two 41 42 It should be noted that we do the similar exercise for A more detailed description of the methodology can each year of LFS data since we have three years data be found in the Appendix 17 Table B: Figure Distribution of 5:Determinants ofAutomatibility Probability of Automation of jobs in Moldova (Job-Based (Job-based vs Occupation-Based) Approach) Source: Authors’ analysis. Source: Authors’ own calculations using the Pseudo-STEP survey data for Moldova. different approaches.43 Unsurprisingly, we future. If the probability is between 30 do not see a considerable difference percent and 70 percent, such jobs are throughout the years since no major change classified as medium risk. These jobs will to the workforce would occur within three not be fully replaced by machines, but will years. This report will focus on the results experience major transformation in the for the Job-based approach since it tasks performed. If the probability is above acknowledges the variation in task 70 percent, these jobs will be obsolete in structure within the same occupation and the next two decades and will be replaced shows more conservative estimates.44 The by machines. risk of automation can be classified into three levels i.e. low (less than 30 percent), This analysis suggests that by 2040, nearly medium (between 30 and 70 percent) and 14 percent of jobs will be replaced by high (greater than 70 percent). If the machines, whereas about 60 percent of jobs probability of automation is less than 30 will experience major changes in the task percent, such jobs are relatively safe and structure. The proportion of jobs at high will not see any major changes in the near risk of automation in Moldova is similar to 43 44 Total area under the curve is 100 percent Since the results are similar across the years, we will use only 2014 as it has nearly 60 percent more observations as compared to other years. 18 Armenia and Georgia, though, the number workers in the occupation group is ranked of jobs at medium risk is 10 percentage first whereas that task which is reported to points higher as compared to the be employed by the least number of referenced countries. It suggests that workers is ranked 19th. It can be noted Moldova is currently lagging in the region that, irrespective of the occupation group, as regards tackling the threat of automation workers have reported the use of to the workers at medium risk.45 communication devices to be the most common task in their work. However, the threat of automation is not evenly distributed across sectors and Intuitively, this table portrays the current occupation groups. Figure D (page 27) supply of variety of skills among workers. If indicates that the low skilled workers face we compare it with the regression results, relatively high risk of automation whereas it appears that the skills which are difficult highly skilled workers face the least risk. to automate or the ones which are One can also see that workers with a higher complimentary to new technologies are level of education are exposed to lesser risk ranked lowest among all occupations. Soft- of automation. Figure E (page 28) shows skills like Supervising skills or Presentation that the majority of workers in jobs with a skills, or technical skills like advanced high and medium risk of automation are quantitative/computing skills, have a employed in the manufacturing and negative effect on the automation commerce sector in urban areas. Similarly, probability, whereas they are the least different occupation groups also face utilized skills, even among the highly varying risk of automation. Figure F (page skilled workers. Similarly, most of the low- 28) shows that among the different age skilled workers mainly employ basic groups, young workers (under the age of quantitative skills or require physical 30) hold the highest share of jobs at high prowess, which will become obsolete in the risk of automation. These results and near future. figures show that the most vulnerable group of the Moldovan labor force are the young unskilled workers who are employed Implications in low-skill occupations. For it to remain competitive in the future, Despite being a lower middle-income Moldova will have to invest in developing country, Moldova has a relatively high its human capital, along with improving literacy rate. Nearly half of the workers hold physical infrastructure and general Higher than Secondary level of education. business climate. The current workforce Though, most of these highly literate possesses the skills which could be workers do not possess any technical or redundant in the coming years. digital skills. As a result, most of these workers end up in low-skill occupations. The Government may want to consider a Most of these low-skilled jobs depend on the comprehensive strategy to digitize the physical strength of the worker or consists economy by encouraging the use of ICT of rudimentary tasks which are neither across all economic sectors and to improve cognitively challenging, nor require any digital literacy among the population, thus advanced digital skills (e.g. assembling, creating opportunities for firms to become packaging or data entry etc.). These tasks more productive by adopting those will positively affect the probability of technologies, and for workers to adapt to automation as they are easy to automate. and gain from those changes. Table 7 (next page) ranks the tasks by their The analysis of workforce employed in utilization across major occupation groups. urban areas suggests that most of the The task which is performed by most of the workers which are at high risk of 45 Though, other less developed countries like Vietnam, Sri Lanka and Laos have similar distribution of risks among their workforce 19 Table: Ranking skills/tasks used by each major occupation. [ The skill/task which is used by most number of workers within the occupation is ranked first. ] Source: Authors’ analysis automation are less educated, are employed decades. These are jobs at medium risk of in low-skill occupations and work in the automation. The results of the analysis manufacturing and commerce sector. The suggest that jobs that are currently share of young workers (under the age of considered high skilled and employ highly 30) is the highest. These workers may educated workers will also use the soft require assistance in getting retrained and skills like supervising skills or teamwork, equipped with soft and digital skills and the hard skills like advanced required to keep their skillset relevant. computational techniques to a large extent Both firms and the Government may than today. consider deciding for on-the-job training or short-term training courses for these To keep those jobs relevant, the Moldovan workers respectively. government will have to change the existing curriculum for students starting as Furthermore, nearly 60 percent of the jobs early as first grade. There is need to adapt will see significant transformation in the modern practices in education to provide tasks performed over the next couple of soft and hard skills needed to compete 20 against workers in the developing and threat to jobs due to automation; many advanced countries. countries will see some jobs automated away and many more jobs change Comparing Moldova with significantly. At the same time, it is critical to note that some of these countries have other countries, and the been investing significantly more—for costs of not adapting longer periods—in education and social protection programs, increasing the The next section will discuss how to better likelihood that their workers will be better position young people for the opportunities able to adapt to technological change. If or to face the risks that could arise due to digital technologies will shift patterns of digitization. Before that, we briefly trade, or make some economies much more compare these results for Moldova with productive than others, then it is likely that other countries. falling behind in these kinds of “future- proofing” investments might exacerbate Figure X provides a summary of the results inequalities within and across countries. of similar analyses for a range of countries, in different regions of the world, at Laggards will not be able to compete in different states of economic development, local, national, or global markets. They will and with varying technological potential. find themselves shut out of value chains or Due to the similarity in the methods used, it new market opportunities. Businesses that is possible to compare these results for fall behind risk failure, taking jobs with Moldova with other countries. At the same them and potentially bifurcating markets as time, as the dataset used here—the STEP ‘connected’ firms do better. Such businesses Survey—is different from datasets used in and workers will in any case find it other countries, and noting that these increasingly difficult to compete or calculations are speculative, it is necessary contribute in the future, as technology to take these comparisons as indications of advances could deepen divides. The possible outcomes, rather than specific outcome of lagging in adoption of predications. technology thus means degraded competitiveness, poor job outcomes, and It is possible to summarize from these exposure to the future’s risks. The risks results that Moldova is not alone in facing a Figure: Comparing countries by share of jobs with high risk of automatability 80% 70% 60% 50% 40% 30% 20% 10% 0% Moldova Norway Canada Vietnam Austria France Lao PDR Georgia Spain Denmark United States Macedonia FYR Italy Finland Slovak Republic Netherlands Ireland Poland Korea Germany Czech Republic Belgium Japan Sweden Estonia Armenia United Kingdom Note: Analysis for Lao PDR, Georgia, Moldova, Macedonia FYR, and Vietnam used STEP Survey data, while analysis for the other countries shown used data from the Survey of Adult Skills (PIAAC). Source: World Bank analysis; Nedelkoska, L. and G. Quintini (2018), "Automation, skills use and training", OECD Social, Employment and Migration Working Papers, No. 202, OECD Publishing, Paris, https://doi.org/10.1787/2e2f4eea-en 21 from not advancing for rural workers, for These directions are also in line with the example, is significant (see Box). Government’s Medium-Term Sector Policy Priorities (2019-2021), notably to improve What might be the public policy responses the access to and quality of education to for Moldova in this case? promote a knowledge-based society, to develop the information and 5 Ideas for today and communication technology infrastructure, and to facilitate the development of the tomorrow small and medium enterprise sector.47 Moldova could position itself to take better While this analysis has not focused in detail advantage of digitization and technological on rural Moldovans, it is important to change in terms of job creation. The recognize that digitization can pose a risk foregoing analysis finds that the major risk but also hold opportunities for them. There for Moldova from digitization (and is insufficient data to offer a quantitative specifically, automation) over the coming analysis of these opportunities or decades is one where workers might not be challenges, but some of the possible prepared for the future of work due to the dimensions are explored in Box. shifting task content of their jobs. Some jobs — about 14 percent — could be Preparing the workforce for replaced, whereas about 60 percent of the jobs would experience major changes in the the future of work task structure. Hence, public policies should The future is determined by the place a high priority on preparing the development of digital economy and workforce — of both today and tomorrow — society. In light of rapid advances in the for the future of work, in workplaces, fields of Artificial Intelligence and robotics, occupations, and sectors that may be there is a potential of new technologies to increasingly digitized. substitute for human labor. These are fundamental, structural changes shaping We also find that, correspondingly, there is tomorrow’s economy and the organization a major gap in the digital readiness of of tomorrow’s society. Today’s children businesses across the economy, especially may go on to be employed in jobs we those outside of the digital industries. haven’t yet imagined, jobs that will require Moldova is not alone in this; surveys of a different skill set than today’s labor businesses globally find that few have market is demanding. Moldova’s education embraced the digital opportunity in system is not yet adequately preparing substantial ways.46 Public policies can young people for the future, and a create an enabling environment for all screening of the current situation is already businesses to digitize more effectively, and showing the effects of this strain. specific programs and interventions could accelerate digitization by closing specific To develop the fundamental skills of the market gaps in knowledge, access to young generation, in 2010 the Moldovan finance, and skills. And finally, it might be education system transitioned from possible to expand the benefits of digital objective-based curricula to key- work to more people. Building on pilots in competences based curricula. According to other countries, and on the popularity of the European Commission, 'key online freelancing in Moldova, we focus on competences' are the knowledge, skills, and this opportunity here. The following attitudes needed by all for personal outlines what these efforts would entail. fulfillment and development, employability, social inclusion and active citizenship.48 Key 46 47 https://www.mckinsey.com/business- See Official Gazette of the Republic of Moldova No. functions/digital-mckinsey/our-insights/five-fifty- 126-132 Art. 392 of April 20, 2018 48 digital-lipstick; https://forrester.nitro- digital.com/pdf/Forrester- https://ec.europa.eu/education/policy/school/compete s%20Digital%20Maturity%20Model%204.0.pdf nces_en 22 Box: Digital opportunities and challenges for rural Moldova With few exceptions, rural communities lag in coverage or access to digital technologies. Even as the mobile phone has become commonplace globally, other technologies have remained out of reach or unaffordable for rural workers and businesses. The opportunity no doubt exists: examples of small or rural towns in China that have become ‘Taobao villages’ suggest the potential of the internet to overcome distance and allow rural businesses to tap into national or even global markets. Similar hopes abound for the use of ICTs in schools or health centers in rural areas, to connect those communities to a wider range of knowledge providers. And freelance workers can be located anywhere, working virtually for an employer located anywhere else in the world. But this potential is often unrealized due to low levels of skill, poor infrastructure (e.g. spotty electricity or bad roads that increase costs of doing business), or limited rollout of appropriate technologies due to various market failures, starting with basic commercial viability. Moldova is no exception to these trends. With a vibrant local ICT industry and widespread access to affordable internet services—even if through mobile networks—it might be possible for rural inhabitants to take advantage of digital tools. However, rural areas are hollowing out, with most of the skilled workers moving to cities or even emigrating. It certainly is possible that in the long term, rural Moldova could see a technology-enabled revitalization like what happened in China, or even in some European countries. But this will need investments in more than digital services, to improve basic infrastructure and skills, and to create an ecosystem for businesses and individuals that makes the costs of moving to or doing business in rural areas affordable. Digitization will likely have a more positive outcome for rural areas in countries such as Moldova, but the path to realizing that has many steps. References: UNFPA & Center for Demographic Research, POPULATION SITUATION ANALYSIS IN THE REPUBLIC OF MOLDOVA, 2016: https://moldova.unfpa.org/sites/default/files/pub- pdf/PSA_engleza.pdf; World Bank, World Development Report 2016: Digital Dividends; https://qz.com/899922/once-poverty-stricken-chinas-taobao-villages-have-found-a-lifeline-making- trinkets-for-the-internet/; https://sampi.co/taobao-villages-china-rural-ecommerce/; https://enrd.ec.europa.eu/sites/enrd/files/tg_smart-villages_case-study_de.pdf competences include: literacy and are: communication skills, organizational languages; math, science and engineering; skills, writing and use of IT tools. The link digital competence; personal, social and between key competences and professional learning competence; civic competence; competences is compelling enough for some entrepreneurship; cultural awareness and countries to already start preparing expression. children for smooth transition from education activity to professional life Key competences developed by the during school years. education system at the level of primary, low secondary and high secondary The countries that are most advanced at education are providing a solid foundation preparing children and youth for the digital for the development of any professional economy and society are Denmark, Finland, competences that the Technical and Ireland, and Estonia – among the 9 first Vocational Education and Training (TVET) digital economies and societies in the system and Higher education – but also Life world.49 These countries’ experiences are Long Learning – should further build upon relevant for Moldova mainly because of the in development of the new workforce. similarities in population size, along with Critical baseline competences required by Estonia’s similar historical path after labor market in any occupations (ISCO-08) gaining independence in 1991. Due to 49 https://ec.europa.eu/digital-single- market/en/news/digital-economy-and-society-index- desi-2017 23 efforts in their education systems, these students; e-textbooks; online countries’ economies today are registering assessments; online exams; e- high ICT sector performance, large ICT use enrollment in the Higher education in non-ICT industries, public administration system; efficiency due to e-Governance and, most • Infrastructure enablers: schools importantly, development of an efficient without walls; Digital and and innovative workforce. Each of these Innovation Hubs; FabLabs and countries also developed an ICT country Living Labs;50 Startups Centers; Strategy. Those ICT strategies were • Population digital literacy implemented rigorously, despite changes in development: transition of public government. services to e-services without other alternatives; schemes for The overall philosophy adopted in development of digital skills with education was that children are the adult population. innovators of the future and creators of added value. While being ensured a happy The report provides specifics on the childhood, they were to be also prepared referenced countries and their initiatives in for the future digital economy and society. Annex 1. Taking the experiences of these Thus, while playing, children were to be countries into account and adapting them to taught through problem/project/ Moldova’s context may allow the latter to phenomenon-based learning, where catch up with the new global developments everything would be well understood and on digital and automated economy, and applicable, with opportunities to learn by thus to prepare the workforce of tomorrow doing. The education strategies were to better integrate with the global value research-based, were often funded through chain. Specific approaches to do this are out significant public programs, and included a of the scope of this report, but may be strong awareness-raising component. investigated in future studies. These strategies were based on several very Preparing firms for the future important blocks, described below: As it has been discussed earlier, there are a • Teaching approaches: strong focus few sectors where firms — especially of STEM education based on real life smaller business—are using digital tools issues; use of ICT devices by all and services. These range from engagement teachers and all students in all in online marketing, to automation of subjects, starting in primary school; production, to using accounting or HR coding, gaming, robotics, management tools. programming are introduced in primary school either as separate Discussions with public and private sector subjects or as a part of STEM stakeholders suggest that information gaps curricula; may be a key reason for lower rate of • Teachers’ role: change from delivery adoption of digital services. Businesses may of information to guidance through have limited awareness about digital on line information; support to and technologies relevant to their sectors, lack training of teaching staff of all of knowledge of where to (reliably) source disciplines; in-school ICT specialists those tools or technologies, limited (digital) support teachers in using apps and skills among workers or low levels of ICT devices; knowledge about where to acquire such • ICT helpers: development of digital skills, and in some cases, poor information learning materials at national level about the costs-and-benefits of such for teachers of all subjects, e- investments. repositories for teachers and 50 Fabrication laboratory, a workshop offering located in an existing physical-social space such as a (personal) digital fabrication. A living lab is an city or community. experimental, innovation-testing space, typically 24 Lagging adoption of these efficiency Futures Development Corporations (SADCs) enhancing or innovation-supporting digital and 10 Community Business Development technologies implies that Moldova’s Corporations (CAEs). The SADC-CAE also businesses might not remain competitive as offer web and e-commerce assistance, the country integrates with European through individual IT consultants in their markets. It also suggests a missed target settlements who reach out to local opportunity for higher value job creation, businesses and survey their IT needs, and as firms replace repetitive tasks or refer them to local IT enterprises capable of outdated processes. And it also suggests attending to a specific request. The missing on a new or expanded market for consultants also help businesses evaluate Moldova’s own ICT companies to serve local the offers and ensure quality of delivery. 53 businesses; even if this market is relatively small, it can lead to innovation through the Apart from such measures to increase intensive collaborations that could arise access to technology and information, it is from such partnerships. also important for markets to function well. Critically, evidence suggests that firms There are examples of various government exposed to competition (locally or supported programs to overcome such internationally) have incentives to upgrade information gaps. In Georgia, the World technology. And public policies need to Bank has financed the ‘Broadband for address non-technological barriers as well; Development’ program, which aims to skill- for example, even if firms wish to use e- up owners of micro, small and medium commerce, they will see no benefit if sized enterprises (MSMEs) to take logistics systems are weak or regulations advantage of the opportunities from stymie trade.54 ecommerce. This is complemented by programs being rolled out by Georgia Post Building on these examples, and noting the to make shipping and logistics simpler for potential to link Moldova’s ICT companies these businesses, and a national program to and workers with its businesses in other roll out fiber optic internet connectivity sectors, it is possible to define the broad across rural areas.51 outlines of a “digitizing business” program. In Malaysia, the public agencies such as the First, to inform program design, it is Malaysia Digital Economy Corporation critical to improve the data about digital (MDEC) with the SME Development technology adoption by Moldova’s Corporation (SMECorp) (and other agencies businesses. Hence, this activity should start and partners) have been supporting e- with a nationally representative survey of commerce adoption by small businesses. SMEs to understand the extent of their Their support includes training, connection digitization, and the reasons for why or with trusted partners, and some financial why not they have adopted these support to list products and services technologies. online.52 Noting that information gaps are a key The problem of trusted vendors’ and problem, this activity could mobilize a overcoming knowledge gaps among network of ‘digital facilitators’ that will business owners may be addressed through assist businesses (especially SMEs) in a program such as one in rural Quebec, led selected sectors to evaluate and define by the federal network of 57 Community potential investments in digital 51 53 https://www.sadc-cae.ca/en/entrepreneurs- http://documents.worldbank.org/curated/en/3206814 assistance/web-and-e-commerce 54 67987898858/pdf/PAD1543-PAD-P152441-R2016- The World Bank’s World Development Report for 0029-1-OUO-9.pdf pages 35-39 2016, on digital dividends, discusses these and other 52 See https://www.mdec.my/digital-innovation- ‘analog complements’ in detail. See World Bank Group. ecosystem/ecommerce; 2016. World Development Report 2016: Digital https://www.mdec.my/news/empowering-malaysias- Dividends. micro-entrepreneurs-to-boost-ecommerce https://openknowledge.worldbank.org/handle/10986/ 23347 25 technologies. Hence, in a pilot phase, this But beyond this, it might be possible to activity could train a team of digital consider using digitally enabled work facilitators to engage with SMEs, (DEW) to close some of the gaps in the understand their business processes and labor market. DEW includes the range of needs, and propose appropriate digital technology interventions: from the process investments (along with a cost-benefit of finding and applying for jobs (using analysis). online jobs boards), to matching skills to specific tasks in local markets (e.g. through These engagements could be done in gig economy-type platforms such as coordination with local business TaskRabbit or Lyft), to matching workers associations (e.g. the CCI) and the SME with employers globally (e.g. through development agency (ODIMM) to identify online freelancing services). An estimate by target SMEs, and with the IT industry the McKinsey Global Institute suggests that association (ATIC) to identify appropriate such online talent platforms could boost providers of digital solutions. global GDP by US$2.7 trillion by 2025.58 The pilot could be evaluated rigorously At present, gig economy platforms for local (even potentially through a randomized services (e.g. ridesharing, non-tradable controlled trial) and, based on those services) do not exist in Moldova. This results, scaled up with the target of implies an opportunity, but also means that digitizing SMEs across the country through some part of the labor force might not have appropriate technical assistance and efficient digitally enabled means to find linkages with solutions providers. work. Promoting digital employment However, digitally enabled online freelancing may be an option for piloting among individuals and evaluation in Moldova. Online freelancing connects workers and World Bank analysis has found that in employers through on-line work platforms. Moldova, “jobs became less inclusive It allows the process of finding, doing, and between 2006 and 2012. Women, the poor, being paid for a job to all happen on-line. youth, and rural residents fared less well in This presents a “win-win” for both parties: the labor market as employment employers save on transaction costs by opportunities dried up.” Specifically, even outsourcing on-line, while workers get having “rising educational attainments, paid, often at a more competitive rate than young people face significant challenges they would on their local markets. Online finding non-farm jobs.”55 freelancing may be a pathway to work for many Moldovans that might be un- or In this situation, improving digital skills underemployed due to spatial mismatches among young people, for example, might in the demand for and supply of labor. lead to improvements in labor market outcomes. There is consistent evidence Examples for publicly supported programs globally that shows a wage premium for that support people gaining skills to use workers who have even basic digital skills,56 such online freelancing platforms while evidence also suggests that digital (awareness, knowledge, and access to skills are increasingly in demand for technology) and generate incomes or find middle-skill jobs.57 employment come from Malaysia and Kosovo (see Box). 55 57 World Bank, Moldova Poverty Assessment 2016 : A https://www.burning-glass.com/research- Jobs Diagnostic for Moldova - 10 Key Facts. World project/digital-skills-gap/ 58 Bank. https://www.mckinsey.com/featured- https://openknowledge.worldbank.org/handle/10986/ insights/employment-and-growth/connecting-talent- 26041 with-opportunity-in-the-digital-age 56 https://www.oecd.org/els/emp/Skills-for-a-Digital- World.pdf 26 Box: Public programs to support income generation via online freelancing In Malaysia, an integrated and growing program on digital work assists individuals in the Bottom 40 of income distribution – from low-income households, or individuals earning less than RM4,000 (about US$1,000) per month. The program: (1) connects B40 populations to online work – through training programs and providing access to Internet connectivity, and through efforts to attract demand for local and international microtasking and online freelancing platforms; (2) Supports job creation through the digital-enabled ‘sharing economy’ – this includes connecting individuals from the B40 to platforms (including ride- sharing, tourism, advertising, back-office support, delivery services), creating a regulatory framework for sharing economy services, and fostering collaboration between sharing platforms and other private firms in other sectors to increase demand. The program has been running in its current form since 2012. Preliminary results are that over 75,000 ‘B40’ workers have been trained since 2015, of which half have been successful at earning an income through the program. Many beneficiaries have earned incomes through digital work, in some cases over RM 500 (about $110) a month; on an annualized basis, this represents the median income of a “middle 40” family in the income distribution. The World Bank has also piloted such initiatives in Pakistan, Nigeria, Bangladesh, and notably, in Kosovo. In Kosovo, the program, known as Women in Online Work (WoW), is giving participants a chance to compete in the global market for jobs in IT and related services, such as graphic design, data entry, and virtual assistance. This program focused on women pursuing online employment by providing them with online work employability training. After two pilot phases in 2016-2017, 85 women—most of whom were under- or unemployed previously, from a total of five municipalities, have graduated the program, with a collective earning reaching ~$30,000 for a total of 335 competitively gained online contracts, while additional 5 participants found jobs in the local IT market, and generated an additional ~US$9,000 over a six month period. Some WoW graduates began making higher than the country’s average salary, while enjoying flexible and fewer work hours. In addition, some of the beneficiaries transitioned to entrepreneurship, with three startups being formed. The program is now moving towards scale-up as part of a new investment project (the Kosovo Digital Economy Project, scheduled for implementation between late 2018 and 2023), to cover up to 2,000 men and women over the coming few years. Source: Authors’ analysis. It might be possible that such initiatives cities where young people may be unable to could yield similar results in Moldova, but find work despite having relevant technical with appropriate parameters.59 Initial and/or soft skills (especially language and discussions with the Government suggest a communication skills). weak appetite for such an intervention, especially if targeted at those who might Such a program should (1) train these not already possess the skills or readiness individuals (potentially focusing on young to engage in digital work. Moreover, many people that are under- or unemployed) with stakeholders note that such an initiative IT industry-oriented skills and then (2) might not yield significant results in rural assist them to engage in online freelancing. Moldova as most young people have moved The program could be organized — as it has out to urban areas or out of the country. been in Malaysia and Kosovo — in Hence, the focus could be on secondary partnership with the relevant public 59 For example, in Kosovo, the pilot focused on Moldova, with much of the young population either addressing the high level of inactivity of women in the moving to the cities or leaving the country, the labor market – often due to social and cultural factors beneficiaries and sought outcomes of a similar effort apart from skills mismatches in the local economy. In would need to be altered. 27 agencies or organizations for digital development (such as the MEI), and working with local civil society and/or education institutions. 6 Conclusion Moldova has an opportunity to position itself to take advantage of technological change and the ongoing digital transformation. To some extent, it already has some of the necessary elements: over the past decade it has accelerated the process of digitizing its Government, and its local digital industry has been creating jobs and growing its exports. Both the private sector and the Government are aligned in their vision to realize the digital economy’s opportunity. Public policies and programs that are well-defined and implemented can help here, by helping to create more, better, and more inclusive digital jobs. Three overall messages arise from our analysis: • Continue support to digital industries, including making them more inclusive and promoting innovation and entrepreneurship; • Do more on digital literacy and skills beyond the IT industry, for today’s workers and for tomorrow’s workforce; • Accelerate the digitization of businesses across the economy to capture the benefits of increasing productivity, access to markets, and innovation. These three messages translate into broader policies and actions that the Government may consider going forward. See Table (next page) for a discussion of a short- and medium-to-long term program. 28 Table: Policies and actions to grow digital jobs in Moldova Strategic Intended effects Actions to consider direction Prepare the Prepare firms for Promoting digital workforce of the the digital futures employment future Continue the Ensure that the IT Provide an enabling Ensure a supply of Short-to-medium term: Continue and scale-up ongoing support for workforce has skills environment for IT workers ready to programs and efforts as a collaboration of the public and digital to address new companies to transition to their private sectors, supporting the IT industry to improve industries trends in the global startup and grow jobs, with practical quality and shift to higher value-added products and market; create a knowledge services; increase awareness of younger students and their pipeline of students families about digital skills and jobs with skills for the future Long-term: Boost investments in education (see below) Do more on Incorporate digital - Increase awareness Short term: Implement specific short-term programs to digital literacy skills in all levels of of jobseekers about quickly train un- or underemployed people to find and do education; increase online work, work online coverage of including through programs to train better technical and Long-term: Invest in a steady and strategic upgrading of the Moldovans outside soft skills education system to incorporate new methods of teaching, of the IT industry update the curriculum and teachers' skills, and improve in digital skills digital infrastructure in the education system Accelerate the Improve the digital Increase awareness - Short term: Identify a few pilot sectors to test out training digitization of skills of today's of businesses approaches for businesses and individuals (workers) to businesses workers across outside of ICT improve their digital competencies and skills; set up a sectors, going about digital program to link local IT expertise with businesses to identify beyond the ICT opportunities and implement digital upgrades, potentially with a focus on industry SMEs Long-term: Scale up the program to cover more sectors, in partnership with the IT industry Source: Authors’ analysis. 29 Figures: Analysis of the risk of automatability Figure A:Distribution across industries Figure B:Distribution across occupations Figure C: Educational distribution Figure D: Proportion of Jobs at High, Medium and Low risk of Automation (2014) 30 Figure E: Proportion of Job at High, Medium and Low risk of Automation (2014) Figure F: Proportion of Jobs at High, Medium and Low risk of Automation (2014) 31 Annex 1: Methodology to estimate the effect of automation of employment We are primarily using two data-sets for this analysis i.e. Labor Force Survey for Moldova (LFS) and STEP surveys for Armenia and Georgia. We will use the data from 2014, 2015 and 2016 LFS. It collects detailed information related to employment and socioeconomic variables about the randomly selected individuals across Moldova. The sample size is nearly twice in 2014 as compared to 2015 and 2016. Since we want to focus on the workers employed in the urban areas, we will drop all other observations which are not employed by some enterprise or belong to the rural areas. This study is focused on assessing the threat of automation to workers in Moldova using Occupation-based approach (Frey-Osborne) and Job-based Approach (Arntz, Gregory and Zierahn). Job-based approach is focused using the variation in tasks across different occupations to assess the threat of automation. Though, the LFS data does not collect information about the tasks being used by workers in their jobs. In order to use a proxy for tasks being performed by workers, we will match the LFS data with the STEP data from Georgia and Armenia60. Since STEP data collects information about individuals between 15 and 64, we also dropped all workers above 64 in LFS data. We use gender, education level (ISCED level), major industry (single digit) and the occupation code (3 digit level) to match the tasks to the workers. It will generate duplication for each observation in the LFS data. We randomly drop duplicates for each LFS observation which we were able to match with the STEP data. We also drop the unmatched observations from the STEP data. It should be noted that we do the similar exercise for each year of LFS data since we have three years data. Once we have defined the proxy tasks for each worker in LFS data, now we can employ two different approaches as mentioned above. The first one follows Frey-Osborne (FO) in which they have defined the probability of automation for 6 digit SOC occupations, hence called the "Occupation-Based Approach". Second, we will estimate the probability of automation at the individual level using the tasks employed by the individual to perform the job. This method has been introduced by Arntz, Gregory and Zierahn (AGZ) to estimate the probability of automation for jobs at an individual level for OECD countries and hence, has been called the "Job-Based Approach". FO estimate the probability of automation based on the type of occupation, while AGZ argued that with-in the same occupation category, the workers might be performing varying tasks with different intensity. FO estimated the probability of automation at 6 digit Standard Occupational Classification (SOC) whereas the LFS survey uses 4 digit International Standard Classification of Occupations (ISCO). To calculate the occupation-based probability of automation, we matched the 6 digit SOC codes to 4 digit ISCO codes and if there was more than one 6 digit occupation codes matched to a 4 digit ISCO code, we weigh each 6 digit SOC code by the inverse of number of duplication (or matching). Since SOC code is at 6 digit and ISCO code is at 4 digit level, there will be many instances where more than one 6 digit SOC code is matched with a 4 digit ISCO code. We weigh equally all the 6 digit SOC codes matched to a 4 digit ISCO code. For example, one ISCO code is matched to 3 different 6 digit SOC code, so we weigh each of the SOC code by one-third. However, if it is one-to-one match, then we simply assign the FO probability of automation to the 4 digit ISCO code. Using this method, we will have the probability of automation for each 4 digit ISCO code. It will give the same probability of automation for every individual which belongs to the same ISCO code, irrespective of the industry she is working on or the task-structure of her job. 60 We have also used Sri Lanka, Laos, Viet Nam, Yunnan and Bolivia as well to perform the same analysis since these countries have similar per capita income. The results are similar. We are using Armenia and Georgia since they have similar historical structure of the economy as Moldova, though, they have higher per capita income than Moldova. 32 To incorporate the task-structure of the job, we follow the approach introduced by AGZ. First, we match the FO probability of automation for occupations to the job-based data collected in LFS survey using the multiple imputation approach. Our dependent variable is the probability of automation imputed by FO for 6 digit SOC occupation codes. As a result, we first have to match the 6 digit SOC occupation codes to 4 digit ISCO codes used in the LFS survey to record occupation data. In doing so, there are some instances, in which more than one 6 digit SOC codes are matched to a 4 digit ISCO code. Using the same methodology as used by AGZ, we duplicate these observations where the data for independent variables is the same, though, the dependent variable is different depending on the probability of automation for each 6 digit SOC code. For example, if there is a 4 digit ISCO code which is matched to 10 different SOC codes, we will duplicate 10 observations using probability of automation for each SOC code as dependent variable. Following AGZ, we also use Expectation Maximization Algorithm introduced by Ibrahim (1990) as follows: = ∑ + Ԑ =1 Here, yij is the transformed probability of automation for each individual, i is the observation and j is used for the number of duplicates and xin are N characteristics of job that we are employing to calculate the job-based probability of automation. βn will give us the estimates showing the impact of each of these job-related tasks on the probability of automation. Since we want to restrict the predicted probability of automation between 0 and 1, we have used the Generalized Linear Model in Papke and Wooldridge (1996) where the dependent variable is transformed to a non-restricted interval61. In addition, as we use the survey data, we need to weigh each observation in the regression analysis. To account for survey weights and the duplication weights and 3 different years, we also use three types of weights, following the methodology in AGZ, which will be multiplied to find the final weights for the regression analysis. In case, there is no duplication, the survey weight will be the annual weight, multiplied by one-third, used in the regression. For the observations which has duplication in the data, we will introduce the first weight such that the sum of all duplication for each observation adds to one. Second weight is the survey weight for LFS data, multiplied by one- third. We multiply these two together to find the final weight for each duplication of the observation. The next issue is what weight we need to assign to each duplication as a first weight. We start by inverse of the number of duplication for the observation and update as follows: Using the predicted values for each observation and given the job characteristics xij and the estimates, we can find the likelihood of yij to be the true automatibility. We will have one ̂ for each duplicated observation j. Using this predicted value yi predicted value yi ̂ , we update ̂ i −yij |xin ,βn ) f(y the first weight as = where f(.) is the standard normal density. After ∑ ̂ =1 f(yi −yij |xin ,βn ) calculating the new weights for duplicated observations, we run the regression again and update the weights. We will keep running this algorithm unless the weights converge. Once the weights converge, then we use the estimated model to predict the transformed probability of automation using the socioeconomic and task data for each individual. In contrast to the Occupation-based approach, if two individuals have the same 3 digit ISCO code for occupation but differ in the task-structure of their job, Job-based approach will have two different probability of automation. 61 Wooldridge and Papke used the fractional logit model in their paper. Though, the same method can be modified and used as fractional probit model as we have applied in our analysis. 33 Table 6 gives the results for the regression analysis. In order to compare the results of two approaches, we plot the estimated kernel density for both as shown in Figure 5. Unsurprisingly, we do not see big difference across the years since there will not be any drastic change within three years. Since the results are similar across the years, we will use only 2014 for Figure 1-9 since it has nearly 60 percent more observations as compared to other years. References Ibrahim J.G. (1990), “Incomplete data in generalized linear models”, Journal of the American Statistical Association, No. 85, pp. 765-769. Papke, L. E. and J.D. Wooldridge (1996), “Econometric Methods for Fractional Response Variables with an Application to 401(K) Plan Participation Rates”, Journal of Applied Econometrics, Vol. 11, pp. 619-632. 34 Annex 2: Examples of education and teaching approaches EU Key OECD copmetences Initiatives countries are using for developing these competencies Competences Communicating in Communication skills Finland a mother Writing skills Finland historically developed national love of childhood, a profound respect for teachers as trusted tongue: ability to Building effective professionals, and a deep understanding of how children learn best based on the research. express and relationships Curricula from 2016 is even more advanced that before: interpret concepts, Presentation Skills New methods of teaching thoughts, feelings, Listener Freedom to teach anywhere facts and opinions Positive dispositions Teaches are guiding both orally and in Teachers have master’s degree in education, with specialization in research and classroom practice writing. Curriculum sets learning outcomes that must be achieved 35 Makes presentations at Class without walls work Coding from the primary school integrated into all the subjects taught by main teacher and IT teacher Reading Forms Group work, learning café - The famous form of seminars in Finland – Learning cafe – is a new and Advanced reading interesting way of learning.. Firstly, the seminar takes place in an informal, if I may say so, atmosphere. Filling Forms Each of the students can feel themselves confident, drinking a cup of coffee, ask questions and discuss Writing articles issues together with a part of a team of about five people. Secondly, everyone can move freely around the Client Inter. Intensity room, come the other groups of students and ask them questions and discussing incomprehensible elements in informal atmosphere. After drawing up a poster on the special themes, each student could look at the posters of other groups, drinking coffee or tea, and asking questions on the topic. It significantly reduced the time of understanding the learning material. At the end of the class, each of the groups present successfully performed in front of class, answering in detail to questions. Denmark Class of the future – school without walls – this an approach build on the concept of inclusive education promoting the principles of collaborative efforts, support networks and flexible approach, attention to curricula needs, appreciation of diversity and respect for all, teaching strategies, individualized instructions, peer tutoring, cooperative learning. Problem based learning at Aalborg University. http://www.en.aau.dk/about-aau/aalborg-model-problem- based-learning The method is based on the following principles acquiring knowledge and skills independently and at a high academic level working analytically, interdisciplinary, result oriented methods cooperating with the business community for defining solution for real professional problems developing abilities for teamwork becoming well prepared for the labour market Ireland ‘Threads’ is another national digital initiative. This is an online space where students can store and share their multimedia oral history projects, promoting peer-learning. The site is moderated by the student’s teachers as they must upload their project to their teacher’s account before it is published on the main page. Bidge21 model of teaching http://bridge21.ie/wp-content/uploads/2011/04/Technology-Teamwork-and- 21st-Century-Skills-in-the-Irish-Classroom.pdf The Bridge21 learning model is designed to release the potential of technology-mediated learning, through a structured move away from individualized, teacher- led learning. The essential elements of the model are as follows 36 A structured team-based pedagogy influenced by the Patrol System learning method of the World Organization of the Scout Movement (WOSM). A physical learning space designed and configured to support team-based learning. Adult support that seeks to guide and mentor, with teachers orchestrating team activities. Engagement with content through student-led projects. Technology used as an integral tool in the process. Incorporation of team and individual reflection as a regular part of the learning. Cross-curricular thematic learning. Problem-based Learning Network https://www.dkit.ie/centre-learning-teaching/links-useful- websites/problem-based-learning-pbl-ireland This is funded by the Higher Education Authority through the Strategic Initiative Funding. The role of the network is to facilitate the sharing of experience and expertise across disciplines and institutions in Ireland. The network was launched at the PBL Symposium that was held at the National University of Ireland, Maynooth on Friday, November 4th, 2005. Collaborative project based learning and problem based learning in Dublin Technical University http://www.aishe.org/readings/2005-1/donnelly-fitzmaurice-Collaborative-Project-based-Learning.html project-based learning and problem-based learning share several characteristics. Both are instructional strategies that are intended to engage students in authentic, “real world” tasks to enhance learning. Students are given open-ended projects or problems with more than one approach or answer, intended to simulate professional situations. Both learning approaches are defined as student-centered, and include the teacher in the role of facilitator or coach. Students engaged in project- or problem-based learning generally work in cooperative groups for extended periods of time, and are encouraged to seek out multiple sources of information. Often these approaches include an emphasis on authentic, performance- based assessment. Dublin’s Digital Hub, https://www.thedigitalhub.com/ The Digital Hub is a collaborative space for digital companies to scale and grow. Structured support in the form of workshops and seminars complement the natural networking environment. H2 Learning – direction within Digital Hub activity, works in partnership with an array of education stakeholders in Ireland and across the world. They collaborate with businesses, organizations, agencies, and individuals involved in education, and engage in a host of ICT-in- education-based projects. Digital Hub offers consultancy on using ICT for teaching, learning & assessment, engages in education projects focused on new dynamic approaches, supply e-learning expertise to education and training. Estonia Class rooms of the future developed in schools that are part of the projects with the idea of extending over different disciplines and over other schools 37 Mektory – I HUB at Technical University in Estonia https://www.ttu.ee/mektory-eng. It works to bring together scientists, students and entrepreneurs, to solve practical product development problems and generate new intelligent ideas (technology transfer), to maximize theoretical studies at the university through practice, to prepare better-trained engineers with experience in cooperating with companies (labs, practical side of the studies), to encourage students start-up companies to move forward, to address upcoming generations and show that engineering is exciting, feasible and down to earth (School of Technology) ,to guarantee success in internationalization by bringing together different cultures, working habits, ideas and interesting solutions. Communicating in Communication skills Finland a foreign Writing skills Group work, learning café, language: as above, Presentation skills International Innovation Hub - Vantaa Innovation Institute was established in 2009 to accelerate the but includes Bilingual transformation of Vantaa, and the Aviapolis area around Helsinki Airport in particular, into an even more mediation skills Listener dynamic and innovative business hub, this is an international organisations in cooperation with (i.e. summarizing, Positive dispositions companies, research institutes, and universities. This is one of Finland’s most dynamic business hubs and paraphrasing, the fastest-growing concentration of small and large businesses in the region, with more than 35,000 interpreting or people working locally. Vantaa Innovation Institute offers a variety of networking and training services, Makes presentations at translating) and plans and carries out development projects, coordinates various cluster programmers, and promotes work intercultural testing and development environments where new technologies, service solutions, and concepts can be Reading Forms understanding. piloted. Vantaa Innovation Institute also provides an excellent base for homegrown companies that are Advanced reading 38 Filling Forms just starting out on the road to expand their business internationally. It focuses on innovation and R&D. Writing articles The emphasis is on making it easier for companies to find new partners and customers and develop their Client Inter. Intensity own services and products. Vantaa Innovation Institute’s current core clusters are focused around logistics, ICT, health care, and environmental products and services.http://www.hightechfinland.com/direct.aspx?area=htf&prm1=1147&prm2=article Denmark The Digital Hub https://di.dk/english/news/pages/digitalhubtomakedenmarkthedigitaltestcentreoftheworld.aspx is designed to provide a unique framework where up to 1,000 IT specialists and students from Denmark and abroad can work, develop, make models and prototypes in partnership with Danish businesses. The Confederation of Danish Industry’s Digitization Panel proposes that private and public sector stakeholders should come together to create a joint initiative that brings entrepreneurs, students and the established business community together to generate the digital solutions of the future. The idea is the Digital Hub to make Denmark the digital test centre of the world. Ireland Dublin’s Digital Hub since it was established in 2003, https://www.thedigitalhub.com/ Estonia Mektory – I HUB at Technical University in Estonia https://www.ttu.ee/mektory-eng Mathematical, Problem solving Finland scientific and Research STEM starts with kindergarten in Finland http://www.stemcoalition.eu/programmes/start-finland technological Mathematics STEM fits into all areas of a school’s curriculum competence: sound Analytical skills http://nsuworks.nova.edu/cgi/viewcontent.cgi?article=1016&context=transformations mastery of Critical thinking FabLab in Yli-li and other parts of Finland https://www.fablabs.io/labs/fablabyliii The tools in our numeracy, an learning environment are CNC engraver, vinyl cutter, 3d printer, surface planning machine, circular saw, understanding of various drills, various hand tools, metal cutters and benders, sewing machine, overlock sewing machine the natural world Basic Maths Skills and computers with 3d planning tools. Work done in our environment comes from the curriculum and real and an ability to Advanced Maths Skills life problem solving following a certain pedagogical process. apply knowledge Operate heavy and technology to machinery Denmark perceived human FabLab offered by University can be used for digital productions e.g. for projects, assignments or exams. It needs (such as offers the following services: 39 medicine, transport Digital video recording studio with editing equipment -booking at http://sdu- or communication). dk.libcal.com/booking/fablab - the studio is called FABLAB studio 3D printers - book by selecting one of the 3D-printers at http://sdu-dk.libcal.com/booking/fablab. Note: The 3D printers are located at the Southern entrance to the library Extra powerful PCs with dual screens with graphics programs such as InDesign and Photoshop and a variety of statistical and simulation programs -booking at fablab@sdu.dk Possibility of printing and graphic productions at SDU's Print & Sign Center for Applied Games Research This is a game based education in Denmark. Located at Aalborg University, the center does research, conferences and trainings in game based learning in close collaboration with the Danish teacher training colleges. Ireland In 2014 the Government launched a three year strategy to deliver an increase in STEM subjects. At the launch of the National Skills Strategy 2025 the Taoiseach said: “The ability to attract new jobs, and having our people fill those jobs, is dependent on having a well-educated, well-skilled and adaptable work force. This National Skills Strategy aims to provide an education and training system that is flexible enough to respond to a rapidly changing environment…” The Action Plan for Education sets out a nu mber of actions to further improve Irish students’ performance in mathematics, including: introducing coding and computer science throughout the school curriculum; a comprehensive National Policy Statement on STEM Education in schools; new measures to upskill mathematics teachers. The Math curriculum at primary level (age 5 – 12 years) is currently being revised by the National Council for Curriculum and Assessment, with a key change being to focus on computational thinking, and this may include coding. Limerick Fablab http://fablab.saul.ie/us/ 2012 has evolved into a fully functional digital fabrication laboratory that offers cultural, educational and research programmes on digital fabrication, bridging the gap between these technologies and all disciplines. Estonia STEM education is not yet part of integrated subjects in the national curricula, however there is a number of projects/organizations that are piloting within different schools. Estonia lacks a strategy and common national platform for school–industry collaboration http://ingenious-science.eu version 3 15/05/2012 could serve as a basis for future STEM education-related decisions and activities. FabLab in Vestmannaeyjar, Estonia - https://sites.google.com/a/tkvg.ee/estonia-island-project- eip/interim-report-may-2016 40 Digital Word Office Finland competence: confid Comp skills –Typing ICT is not a subject of its own in the Finnish national curricula but it is one of seven transversal ent and critical Analytical skills competences which should be included in all subjects usage of Critical thinking Starting fall 2016, coding is a mandatory, cross curricular activity that starts from first year of school. information and Coding from the primary school integrated into all the subjects taught by main teacher and IT teacher communications Using Computer Implementation of computing, coding, computational thinking initiatives - Innokas, a national network to technology for Internet promote robotics, coding and the use of ICT in education http://www.innokas.fi/en. Funded by the Finnish work, leisure and Data Processing National Agency for Education. The Innokas Network guides and encourages students, teachers, school communication. Advanced computation administrators and other stakeholders. skills Self- or peer assessment tools/frameworks for teachers and students digital competence including Communication certification - National tools for digital competence self-assessment TRIM - Tampere Research Center for devices Information and Media Using programming Headmasters: http://ropeka.fi/en languages Teachers: http://opeka.fi/en Students: http://oppika.fi/ (not available in English) Research Unit for the Sociology of Education (RUSE) Teachers and students: https://rosa.utu.fi/taitotesti/ (not available in English) Game based education - national level digital education initiatives concerning game based education Learning analytics group (run by the Ministry of Education and Culture). The task of the group is to promote co-operation between various actors in the field of learning analytics; to promote interoperability in learning analytics; to track and anticipate legislation on learning analytics. MPassID - authentication solution, Single sign-on (SSO): http://www.mpass.fi/en/ (national level implementation in process) New learning spaces - Oppimaisema – a portal of modern learning spaces and school architecture: https://oppimaisema.fi/ https://ec.europa.eu/epale/en/blog/adults-acquiring-digital-skills-insights-finnish-approach-and-results- erasmus-project Finnish National Agency for Education is delivering the Content and digital competence integrated learning (CDCIL) under the Digi4Adults project for VET students Emigrants Adults ICT is imbedded in other training programs 41 Denmark ICT in the curriculum of primary and lower secondary education ICT is incorporated across the Common Objectives, integrated in all subjects. ICT in upper secondary education (age 16-19) is a separate subject. Digital tools are now in all students’ pockets: tests are sent via internet, assessment is done via internet. Extracurricular activity – Robotics and coding Coding Class An industry driven initiative focusing on computational thinking and collaboration between (IT) companies and schools. Students from 10 municipalities and approx. 60 it companies collaborate using coding tools to solve real world problems produced by the companies. 10 “knowledge centers” in VET. The agreement on vocational education reform (2015) has decided to establish up to 10 “knowledge centers” in vocational education and training. Among other things, the centers will help students in vocational education to handle rapid technological development and match the competencies demanded by companies in the digital labor market. "Make A Good School Better" Strategy: The strategy, adopted in December 2012, includes the decision of the national government to reserve DKR 500 million (roughly € 67 million) until 2015 to strengthen the use of IT in primary and lower secondary schools, with the objective to "customize teaching in primary schools to future needs and integrate digital learning resources more consistent in the daily lessons " The strategy comprises four key initiatives: Support for the purchase of digital learning resources and efficient distribution of digital learning resources; Wireless networking in schools towards 2014 and access to computers for all students; Clear targets for the use of digital learning materials and digital learning; Research and development Uni-Login: Single Sign On solution that connects pupils, teachers, parents the school and digital learning resources. More than 1 million registered users. The EMU is the national knowledge and learning portal offering free inspirational resources for teachers in schools and pedagogues in pre -schools. Most of these (reference) resources are created by teaching professionals and a corps of subject experts/editors, and validated with respect to e.g. evidence and quality. The bulk of these OER are not typically for direct use together with pupils in the classroom. They serve as inspiration and guidelines, but some are easily localized for use in the classroom. Parts of the OER can be used in the classroom, e.g. videos. The EMU is about to undergo changes, and a new EMU is expected to be launched in mid 2018. The Materialeplatformen is the national educational web repository. In one section it is a catalogue of all learning resources for Danish schools (mostly commercial and from e.g. museums). In another peer-2-peer section it is a national repository of OER, produced by teachers for teachers. 42 DiDaK initiative: The purpose of this project is to map out how the digital competencies (information, production, participation, operational competences) highlighted in the reform of upper secondary education implemented in the teachers’ practice. The idea is that the participating schools will cooperate with scientists, develop and implement a range of different courses that focus on digital competencies. National championships in digital skills Students work with innovative projects combining real world problem solving and IT. Then they present the projects at a regional level and the winners participate at the national finals at the Danish Learning Festival. Here they present for both a jury and the conference audience in general. Compared with traditional student competitions the Digital skills championship emphasis teachers and leaders learning from innovative student experiences and sharing pedagogical practices at the local and national events. The event include approx. 2000 students and 200-300 teachers, leaders, researchers and industry representatives. Ireland Computer Science will be introduced as a Leaving Certificate subject (post-primary level – 12 – 18 yo) in the school year 2018 to be examined for the first time in 2020. Computational Thinking has become a key focus in Irish education of late. In responding to this educational trend, the primary national support service for teachers, the PDST, devised a summer course based on this topic which was extremely popular with teachers in July and August 2017. Scratch is also a very popular national coding initiative and is run by the Lifelong Kindergarten group at the MIT Media Lab. The Programme for a Partnership Government (2016) commits to introducing a coding course for the Junior Cycle and introducing ICT/computer science as a Leaving Certificate subject. Traditional paper-based standardized assessments are now being moved online assessment and it is hoped that students will be able to complete their assessments using this platform, if they wish, in the near future. The Educational Research Centre (ERC) has been working on piloting these assessments Teachers also find ‘Duchas’ a fantastic national resource when pupils are engaged in online learning. This site allows teachers and pupils access to an online project which aims to digitise the National Folklore Collection of Ireland, Open access resource for teachers which has been generated by the PDST Technology in Education team is a collection of good practice videos. This repository allows teachers to see how ICT has been effectively embedded in Teaching, Learning and Assessment across a wide variety of subjects and activities. The Flipped Classroom The flipped classroom is a model of teaching in which teachers post videos online in lieu of lessons in the classroom. Content is delivered at home instead of traditional homework and 43 students spend class time actively working on tasks to assimilate learning. The concept of delivering content at home to free up time in class has been promoted to teachers in Ireland through the successful teacher blog RangBianca. Web site where prime school children learn all the disciplines via playing Ireland Learning Path, https://www.scoilnet.ie/ Estonia School owners (local municipalities, government, private entities, not for profit entities) are responsible for providing schools with a sufficient level of digital infrastructure. Such sufficient infrastructure includes hardware and software; including laptops and tablets for students and teachers, necessary network solutions and IT systems, local and broadband connectivity and virtual learning environments. The government is responsible for the strategic planning, design of national curricula and setting up a framework for school curricula. The government supports schools to integrate digital culture into learning via several programme-based initiatives (learning materials, teachers’ education etc.). Programming is not a mandatory subject in the Estonian national curriculum, but formal and informal education offers the possibility to acquire diverse IT knowledge, including in-depth IT training and career counseling to make plans for specializing in the field in the future. The effect of ICT hobby education on acquiring higher IT education is remarkable – about 36% of the students who have entered IT studies have considered earlier experience from hobby activities as the most decisive factor in their choice. This suggests that the 319 general education schools in Estonia (68% of all schools) that provide IT hobby activities are ensuring sufficient numbers of student candidates for technology programmes in the future. The national curriculum refers to digital competence as a key competence. At national level, the concept of digital competence and guidance materials for all subjects are designed. At national level, IT as a subject is described as an optional subject. Schools are responsible for designing their school/regions/focus specific curricula. It is up to schools to decide how students’ ICT skills are being developed – via different subjects or through a separate subject. Often schools design their own curriculum for ICT. ICT for inclusion (early school leavers, migrants, etc.) and special needs (physical, mental, emotional) providing distances learning for children that are not attending the school. Universities have started to develop various additional ICT curricula for people already working, including managers, to develop their awareness and improve their skills in using technology for more efficient business management. Mobile learning initiatives (including the use of notebooks, laptops, tablets, mobile phones or other mobile devices) BYOD is one focus of the Lifelong learning strategy. The first obj ective is to increase teachers’ digital competence and their awareness of the students’ need for digital skills. The second objective is to 44 ensure the access and availability of digital learning materials. For this purposes was established Estonia Information Technology Foundation (HITSA).Used to be Tiger Leap Foundation Learning Analytics - portal of digital materials is being developed. Secondly, national e-assessments are developed and implemented. Information System for Learning materials – Ministry of Education and Research (HTM)/ E-assessment -Foundation Innove (Innove) Two repositories: http://www.koolielu.ee: educational resources for pre-school and general education. www.e-ope.ee: Resources for vocational and higher education Repositories of electronic learning materials and learning objects koolielu.ee/waramu – learning materials for pre-school, basic and secondary education Learning platforms moodle.hitsa.ee – used by ~200 basic and secondary education schools, applied higher education schools, universities and vocational schools, viko.edu.ee – used by basic and secondary education schools Government and manufacturing industry has, for example, launched a digital skills training project called DigiABC for unskilled workers, targeting the workers through their workplaces via Unemployment office. in Estonia – ministries, libraries, communities, and so on, are contributing to basic skills training in the framework of lifelong learning. The state wants to boost the role of communities and has launched the e- Community project to shape libraries into larger or smaller information society support points, empowering the librarians with the skills necessary for helping people to use e-services and advise on other technological issues. http://www.vaatamaailma.ee/projects/estonian-digital-skills-and-jobs-coalition Representatives from all the mentioned sectors aim to continue developing the digital skills of Estonians through their activities and have come together in 2017 to establish the National Digital Skills and Jobs Coalition coordinated by the All Digital partner organisation Vaata Maailma foundation. All of the coalition partners have made significant contributions to developing the digital skills in Estonia in the past. The partners of the coalition have extensive experience in digital skills trainings. Learning to Creativity Finland, Denmark, Ireland, Estonia have identical approaches learn: ability to Analytical skills effectively manage Listener Digital skills are cross cutting all the new teaching methods one’s own learning, Critical thinking either individually Learning new things New teaching methods: Problem based learning, learning café, collaborative learning, peer-learning, and or in groups. Freedom to think bridge21 method of teaching. Cognitively Infrastructure enablers: schools without walls, FabLabs, I Hubs, Living labs. Challenging 45 Social and civic Detailed-Oriented Concepts that are put in place by countries to develop the Social and civic competences, as well as Cultural competences: abilit Building effective awareness and expression and contribute to the Sense of initiative and entrepreneurship y to participate relationships effectively and Leadership The future classroom or classroom of the future or classroom of tomorrow is a physical setting that constructively in Team work integrates a variety of high performance pedagogies with educational technologies in an appropriate one’s social and Self-starter physical layout. It involves the use of fashionable technology (Film, TV, PC's, iPads or whatever) and/or working life and Listener pedagogies (e.g. discovery learning). This way of organizing the classroom develops the team work spirit, engage in active Critical thinking critical thinking, increase of responsibilities, learning to learn skills as well as development of digital and democratic Positive disposition skills. participation, especially in A fab lab (fabrication laboratory) is a small-scale workshop offering (personal) digital fabrication. A fab increasingly Freedom to think lab is typically equipped with an array of flexible computer-controlled tools that cover several different diverse societies. length scales and various materials, with the aim to make "almost anything". It offers the opportunity to 46 Sense of initiative Organizational skills test the theoretical knowledge and to make some propotypes based on specific applications – CAD. With and Customer services Fablab students are developing the team work spirit, collaboration skills / decision making skills, critical entrepreneurship: a Problem solving thinking, design thinking, learning and development of software. bility to turn ideas Planning into action through Building effective Innovation hubs are social communities or work space or research centers that provide subject-matter creativity, relationships expertise on technology trends, knowledge and strategic innovation management, and industry-specific innovation and risk Project management insights. These hubs enable active knowledge transfer between researchers and business experts, on the taking as well as Supervisory skills one hand, and industry, government and representatives of academia, on the other hand. Here, decision ability to plan and Multi-tasking makers can meet and brainstorm with scientists and business experts and discuss their complex business manage projects. Time management challenges. Innovation Hub offers demonstrations of emerging technologies – ranging from computer Leadership systems, to cloud computing applications, to advanced security solutions, to data analytics and demos Team work designed for specific industries, such as healthcare, energy, finance and much more. Meeting deadlines Self-starter A living lab is a research concept. A living lab is a user-centered, open-innovation ecosystem, often Listener operating in a territorial context (e.g. city, agglomeration, region), integrating concurrent research and Critical thinking innovation processes within a public-private-people partnership, living labs place the citizen at the centre Positive disposition of innovation. The living lab process,[32] which integrates both user-centred research and open innovation, is based on a maturity spiral concurrently involving a multidisciplinary team in the following Requires Supervision four main activities: of others work Co-creation: bring together technology push and application pull (i.e. crowdsourcing, crowdcasting) into a Coordinating with diversity of views, constraints and knowledge sharing that sustains the ideation of new scenarios, Other Workers concepts and related artifacts. Coordinating with Exploration: engage all stakeholders, especially user communities, at the earlier stage of the co-creation non-coworkers process ] Cultural awareness Creativity Experimentation: implement the proper level of technological artifacts to experience live scenarios with a and Building effective large number of users. expression: ability relationships Evaluation: assess new ideas and innovative concepts as well as related technological artifacts in real life to appreciate the Listener situations. creative Critical thinking importance of Positive disposition Start up hub is an entrepreneurial venture which is typically a newly emerged, fast-growing business that ideas, experiences aims to meet a marketplace need by developing a viable business model around an innovative product, 47 and emotions in a Freedom to think service, process or a platform. A startup is usually a company designed to effectively develop and range of media validate a scalable business model. The start ups are offering needed training, possibility to validate the such as music, ideas, provide mentorship support, possibility to test the propotype. The cross-pollination of ideas can literature and make your business stronger. visual and Finland performing arts. All living labs in Finland http://www.openlivinglabs.eu/ourlabs/Finland International Innovation Hub - Vantaa Innovation Institute http://www.hightechfinland.com/direct.aspx?area=htf&prm1=1147&prm2=article – see above. Finland Startup – AngelList https://angel.co/finland Denmark All living labs in Denmark http://www.openlivinglabs.eu/ourlabs/Denmark Living Lab Copenhagen Living Labs (LLs) are defined as user-centered, open innovation ecosystems based on systematic user co-creation approach, integrating research and innovation processes in real life communities and settings. LLs are both practice-driven organisations that facilitate and foster open, collaborative innovation, as well as real-life environments or arenas where both open innovation and user innovation processes can be studied and subject to experiments and where new solutions are developed. Innovation Center Denmark http://icdk.um.dk/ Startup Denmark http://www.startupdenmark.info/ Ireland All living labs in Ireland http://www.openlivinglabs.eu/ourlabs/Ireland Dublin’s Digital Hub https://www.thedigitalhub.com/ - see above Limerick Fablab http://fablab.saul.ie/us/ 2012 - see above Start up Ireland startupireland.ie/ Estonia All living labs in Estonia http://www.openlivinglabs.eu/ourlabs/Estonia Mektory – I HUB at Technical University in Estonia https://www.ttu.ee/mektory-eng A separate initiative is implemented to better support entrepreneurship: developing the curricula and learning materials and supporting cooperation between employers and schools. Start-ups in ICT in Estonia – supported by the Government and by the donors as well as angel investors. http://www.startupestonia.ee/ Startup Estonia is a governmental initiative aimed to supercharge the local startup ecosystem in order to see many more startup success stories to come from Estonia. For that, we 48 are working on making Estonia one of the world's best places for startups by focusing on these 4 building blocks: strong ecosystem, smart money, smart people, and friendly regulations. 49