Globalization and digital transformation: are impacts on skills and inequality in four future scenarios converging?

This research examines how varying degrees of globalization and digital transformation affect skill demand, socioeconomic inequality and convergence in the EU by 2030. The study employs a comprehensive scenario-mapping approach using state-of-the-art literature, existing econometric analyses conducted within the GI-NI project used as contextual inputs and expert insights. Four scenarios are developed based on potential trends in digital transformation (stagnation or acceleration) and globalization (further globalization or deglobalization). These scenarios highlight essential changes needed to improve skills and alleviate inequality. In all scenarios, the future labour market demands a rapidly evolving skill set, with persistent risks of skills mismatch across educational groups and a strong focus on digital, technical, analytical and communication skills. Three scenarios suggest worsening inequality, particularly affecting low-skilled workers, women and older individuals, while high-skilled workers adapt more quickly. The study shows that communication technology can drive between-region economic convergence, depending on the interaction with globalization and the pace of digital transformation. However, accelerated digital transformation with deglobalization poses divergence risks, as some EU regions may struggle to adapt quickly. The scenarios underscore the complex interplay between digital transformation and globalization, necessitating multifaceted policy responses to foster inclusive growth and mitigate the adverse effects on vulnerable populations.