The professor of Economics at the University of the Basque Country, Sara de la Rica, is one of the most highly respected figures in the field of economic analysis. Her direct and concise lectures at the Bilbao Youth Employment Forum pictured a future in which machines will continue to destroy employment; however, she offered suggestions on how to adapt to this new era. Considering the more immediate future, she augurs that Spain will grow at about 2% in the coming years. De la Rica also mentions three measures that will help reduce job instability.

– What factors will affect economic growth in Spain over the next year?
Spain is growing at 3.2% and employment is also growing at about the same rate (500,000 jobs a year). No other European country is seeing its employment rate growing at the same speed as its economy. This is due to the fact that the adjustment in Spain is taking place by extending margins, i.e. hiring and firing workers with temporary contracts. On the other hand, the GDP growth rate is very strong but it has been estimated that almost half of that 3.2% is due to external factors, such as the lower price of oil (this reduces production costs significantly), the devaluation of the euro/dollar makes us more competitive abroad and, finally, the monetary liquidity policy that the Central Bank is pursuing. All this is having a positive effect on our economy. In addition, it seems that the internal demand in Spain is finally expanding, which will also help growth. All these factors are not expected to remain at current levels but we could maintain levels around 2% in coming years if there are no major changes regarding international uncertainties (slowdown of the Chinese economy and of other emerging markets, instability caused by the refugees, problems with the Islamic State…).

– What sectors will generate employment?
As we have not changed our strengths or weaknesses, all those sectors with exporting potential will continue to generate employment as well as tourism. It is possible that the construction sector will also recover but I don’t think growth rates will be so high.

– How can we reduce the level of precarious in employment?
This is a difficult question to answer. Since 1984, businessmen have found a mechanism based on labour flexibility that consists in having a buffer of workers (about 30% of total labour) that they use to adjust labour to the demand. Although all the studies agree that this mechanism is very harmful for the workers who suffer the consequences and for the development of society, it is a mechanism that has been used for the past 30 years and it is unlikely that businessmen will cease to use it regardless of how many reforms are implemented. In my opinion, the only way of tackling this problem would be to change dismissal costs of new workers who are hired indefinitely so that they are more similar to those of temporary workers; perhaps increasing the seniority of workers in the company; forbidding temporary contracts (and punish those who break the law) for jobs that are not temporary in their nature and offering legal certainty to indefinite term contracts by clarifying when a dismissal is fair or unfair. If these three measures are applied at the same time, we could ensure that new contracts are indefinite, with lower compensation pay-outs but providing more seniority; and temporary contracts would be used for the temporary replacement of workers or for some very specific jobs.

– Are current active employment policies efficient tools or do they need to be adapted?
They need a comprehensive reform. The truth is that decrees have been signed in recent months to adapt these policies, especially regarding the training of unemployed people and public/private intermediation but the reforms are just starting to be implemented and, therefore, we don’t know whether they will be useful or not.

– Apart from the knowledge that training provides, what skills should young people have to find a job?
Given the globalized and digitized world we live in, more and more experts agree that our most highly valued skills will include aspects such as creativity, the capacity to interact with others in teams, the capability to take on responsibility for one’s actions, an interest in learning and adapting, as well as empathy and solidarity with one’s environment. There are other skills, of course, such as the ability to communicate in English and digital skills are also highly valued.

– How can we combat the trend of machines taking over jobs?
I think this replacement is unstoppable and rather than fight it I think we must adapt to it. Some jobs will die out no matter what we do; what humans must do is adapt to these changes and realise that the role we shall play in the future will require us to develop skills that machines are unable to perform, such as solving problems, negotiating with others, developing personal services, such as caring for the elderly… New jobs will appear that we cannot even imagine now. The important thing is to be ready in order to take advantage of those jobs when they arise. Therefore, the more open-minded and adaptable we are, the better. Labour mobility (geographical) will also play a significant role. Young people who are free from these restrictions will clearly find more open doors.