The impact of technology development on the future of the labour market in the Slovak Republic

Abstract

One of the current open labour market issues is to analyze how the technology progress in production processes will affect the labour market, especially in the context of the replacement of human workers with machines. This paper aims to identify potential threats faced by the labour market in Slovakia, which based on the analysis, employs a significant number of workers in areas susceptible to automation. According to the results, industrial production in Slovakia is divided into several areas, where almost 41% of all industrial workers are employed in the manufacture of metal constructions, machinery and equipment, motor vehicles, semitrailers and trailers and the number of people employed in this sector is increasing linearly over the reference period from 2008 to 2016. The paper focuses on potential scenarios that may arise in the labour market in the near future, using Cobb-Douglas production function. In the original model, the production function of the company is based on production factors in which labour plays an important role. However, with the growth of automation, the original model of companies is changing, transforming, and workforce who has played the key role in the production process of goods or services are becoming redundant due to the growing autonomy of machines. The analyzed scenarios show situations that may arise in the labour market if a company changes the scale of the use of production factors in its production process. In other words, given the current situation as labour costs increase, the power and capabilities of machines are growing and a company wants to stay competitive on the global market.