Assessing Spatial Impacts of Digitalisation on Labour Markets: Methodological Approaches

Technological advancement is a major factor in shaping the future of work, which in consequence affects labour markets and economic geographies. Although concrete effects of digitalisation are challenging to predict, we can develop proxies based on tasks or skills and how they relate to abilities of humans and/or computers. These proxies consequently can be aggregated on an occupational level to describe the effects of digitalisation of certain jobs and to relate them to labour market statistics to understand implications on various geographic levels. This paper presents the findings of a case study on the German labour market at the district (Kreise) level and analyses differences in the potential effects of digitalisation across regions. While no clear spatial patterns can be identified, results suggest a polarisation of labour markets both on a national and local levels, as well as deepening divides between urban and rural regions. The study uses structured regional labour market statistics and two digitalisation indicators from existing research (Felten et al., 2021; Frey and Osborne, 2017) to categorise employment concentrations into four typologies (“rising stars,” “machine terrain,” “human terrain,” and “collapsing”). Based on the indicators of Potential Risk of Computerisation (PRoC) and Occupational/Geographic Exposure to AI (AIOE/AIGE) this approach provides an understanding of potential regional economic shifts. While focused on German data, this framework could be adapted internationally based on standardised labour market statistics. This allows an identification of regions with high concentrations of employments in sectors that are more vulnerable to transformative or destructive effects of technological advancement and digitalisation.