Future of work
A curated resource of recent research on trends shaping Canada's labour market.
Key Takeaway: Compared with small/medium-sized firms, large firms are more likely to adopt digital technologies and more likely to expect negative effects on both employment and prices.
We live in a constantly changing world and digital technology is the main driver of this change. The Bank of Canada, together with a global network of central banks, set out to understand the global implications of digitalization on the pricing and employment decisions made by firms. By administering The Business Outlook survey to domestic and global partners, the authors analyzed the indirect impact on prices and on employment caused by digitalization to provide a policy response. Overall, Canadian firms expect some downward pressure on prices from efficiency gains such as automation, and from increased online competition and cost compression in the supply chain.
However, small- and medium-sized firms will see an increase in costs for implementation that will have to be passed on to their customers. Hence, digitalization clearly matters for price setting and hiring decisions. Due to the multifaceted nature of the issue, the authors argue that policy makers must continue to monitor and analyze the impacts of digital technology on variables of interest, focusing on inflation, pricing models and employment.