ZEW Press Release: Business-related Service Providers: New Technologies Displace Unskilled Workers

One of the most serious problems of current economic policy is the high unemployment rate. Yet, whereas in the manufacturing industry jobs are continuously being phased out, the service sector is regarded as genuinely promising. In this sector, a large number of new jobs are created – however, poorly qualified workers are largely excluded from this. A current study by the Centre for European Economic Research (ZEW) in Mannheim shows that, in relation to all employees in the business-related services sector, the percentage of low-skilled workers decreased by 30 per cent between 1991 and 1996. By contrast, the share of university graduates increased by about the same percentage in this very period.

The reasons given by labour market economists for this dwindling demand for low-skilled labour are threefold: the influence of new technologies, the impact of foreign trade and a greater supply of skilled labour. The ZEW study shows that new technologies are the decisive factor for the decreasing demand for poorly qualified workers in the business-related services sector. It becomes clear that the use of new technologies exerts a negative influence on the demand for low-skilled labour, while it exerts a positive influence on the demand for university graduates.