Connecting regional automation resilience and regional inequality: evidence from Sweden

Abstract

Through advances in automation, certain jobs are made obsolete, displacing human workers; at the same time, automation creates new jobs for human workers. The occupational structure of regions is continuously altered by the progress of automation technology. At the same time, regional inequality is growing across European regions, with automation being one of the primary causes. Because automation impacts tasks and jobs differently, the same holds true for regions: jobs are not necessarily lost and created in the same locations. This study builds on the analysis on occupation automation risk conducted by Frey & Osborne (2017), and proposes the use of regional automation resilience as a measure for regional inequality, by looking at the job loss risks and job creation abilities of 21 Swedish regions. The analysis finds small regional differences in mean automation risk, and substantial regional inequality in terms of job creation potential and job creation ability. Furthermore, it finds that low-risk job creation, while addressing the growing skills mismatch, is the key to maintaining wage growth and improving living standards within regions.