Economics and Business Management

The impact of innovation in the global economy on the development of the international labour market

Yevhenii Lanchenko, V. Ivchenko, А. Lazutin, Mykola Yakymenko
Download article
Abstract

This study aimed to explore the impact of innovation on employment and the structure of the labour market within the context of the global economy, focusing on the dynamics of transformative processes driven by digitalisation, automation, and changing demand for new skills. A comprehensive methodological approach was adopted, incorporating analysis of sectoral employment shifts, the influence of technological advancement on international labour migration, and the implications of digital transformation for the legal regulation of the labour market. The findings confirm that innovation is a major force behind profound changes in the labour market. In 2023, 66% of tasks were carried out by humans, 33% by technologies, and only 1% through a hybrid format. Projections for 2030 indicate a decrease in the share of human labour to 33%, while hybrid work models are expected to rise to 33%, highlighting the growing need to develop digital competencies and adapt to emerging forms of employment. The rise of remote work presents new opportunities, yet it also exacerbates social inequality and intensifies global competition for highly skilled professionals. Virtual labour migration is partially replacing the traditional brain drain by enabling professionals to work remotely without the need for physical relocation. A comparative analysis of Germany and Ukraine revealed shared trends while also highlighting differing levels of adaptation. Germany, through the implementation of Industry 4.0 and flexible labour legislation, achieved a high employment rate (81.1% in 2023). In contrast, Ukraine is demonstrating dynamic growth in the information technology sector. The war has further complicated these processes, exacerbating structural instability in the labour market. The study confirmed that successful adaptation to an innovation-driven economy requires not only technological advancement but also effective education policy, social dialogue, and regulatory support. The practical significance of the research lies in deepening the understanding of transformative processes in the international labour market under the influence of innovation, offering an analytical foundation for further applied research

Keywords

scientific and technological progress; innovation; work motivation; international labour migration; employment; unemployment

Suggested citation
Lanchenko, Ye., Ivchenko, V., Lazutin, А., & Yakymenko, M. (2025). The impact of innovation in the global economy on the development of the international labour market. Economics and Business Management, 16(1), 145-165. https://doi.org/10.31548/economics/1.2025.145
References
  1. Act on Part-Time Work and Fixed-Term Employment Contracts (Part-Time and Fixed-Term Employment Act - TzBfG). (2022). Retrieved from https://www.gesetze-im-internet.de/tzbfg/BJNR196610000.html.
  2. Annual Economic Report 2024: Strengthening competitiveness sustainably. (2024). Retrieved from https://www.bundesregierung.de/breg-en/news/annual-economic-report-2024-2261744.
  3. Basaria, T. (n.d.). Offshore staff augmentation: Top outsourcing countries. Retrieved from https://geomotiv.com/blog/top-software-outsourcing-countries/.
  4. Batmunkh, A., Fekete-Farkas, M., & Lakner, Z. (2022). Bibliometric analysis of gig economy. Administrative Sciences, 12(2), article number 51. doi: 10.3390/admsci12020051.
  5. Bhardwaj, B., & Sharma, D. (2023). Migration of skilled professionals across the border: Brain drain or brain gain? European Management Journal, 41(6), 1021-1033. doi: 10.1016/j.emj.2022.12.011.
  6. Bonvin, J., Cianferoni, N., & Mexi, M. (2023). Chapter 7: Conclusion: The rise and growth of the gig economy. Challenges and opportunities for social dialogue and decent work. In Social dialogue in the gig economy. Cheltenham: Edward Elgar Publishing. doi: 10.4337/9781800372375.00012.
  7. Braesemann, F., Stephany, F., Teutloff, O., Kässi, O., Graham, M., & Lehdonvirta, V. (2022). The global polarisation of remote work. PloS One, 17(10), article number e0274630. doi: 10.1371/journal.pone.0274630.
  8. Chen, J., & Xu, Z. (2024). The impact of the digital divide on labor mobility and sustainable development in the digital economy. Sustainability, 16(22), article number 9944. doi: 10.3390/su16229944.
  9. Constantinescu, I.C., Grover, A., & Nayyar, G. (2024). Digitalization, remote work and firm resilience: Evidence from the COVID-19. Washington: World Bank Group.
  10. Dengler, K., & Gundert, S. (2021). Digital transformation and subjective job insecurity in Germany. European Sociological Review, 37(5), 799-817. doi: 10.1093/esr/jcaa066.
  11. Directive (EU) 2021/1883 “On the Conditions of Entry and Residence of Third-Country Nationals for the Purpose of Highly Qualified Employment, and Repealing Council Directive 2009/50/EC”. (2021, October). Retrieved from http://data.europa.eu/eli/dir/2021/1883/oj.
  12. Directive (EU) 2024/2831 “On Improving Working Conditions in Platform Work”. (2024, October). Retrieved from http://data.europa.eu/eli/dir/2024/2831/oj.
  13. Dovgal, L., Dovgal, G., & Ishchenko, M. (2021). Prospects for digitalization of the economy of Ukraine: opportunities and threats. The Journal of V.N. Karazin Kharkiv National University. Series: International Relations. Economics. Country Studies. Tourism, 13, 78-88. doi: 10.26565/2310-9513-2021-13-08.
  14. Drobiazko, L. (2023). Transformation of labor market of Ukraine: Professional qualifications assessment. SSP Modern Economics, State and Public Administration, 2(1), 1-11. doi: 10.53933/mespa.v2i1.93.
  15. Dynamics of Ukraine’s Tech Industry: Results from IT Research Ukraine 2024. Resilience as the New Reality. (2024). Retrieved from https://itcluster.lviv.ua/en/dynamics-of-ukraines-tech-industry-results-from-it-research-ukraine-2024-resilience-as-the-new-reality/.
  16. Employment – annual statistics. (n.d.). Retrieved from https://surl.li/wfsvvs.
  17. Employment growth in high/-tech occupations across countries in 2022-2035 (in %). (n.d.). Retrieved from https://surl.lu/uehgnp.
  18. EU Blue Cards by type of decision, occupation and citizenship. (2024). Retrieved from https://ec.europa.eu/eurostat/databrowser/view/migr_resbc1/default/table?lang=en.
  19. Flex, please. (2023). Retrieved from https://www.mckinsey.com/featured-insights/sustainable-inclusive-growth/charts/flex-please.
  20. Fromhold-Eisebith, M., Marschall, P., Peters, R., & Thomes, P. (2021). Torn between digitized future and context dependent past – how implementing “Industry 4.0” production technologies could transform the German textile industry. Technological Forecasting and Social Change, 166, article number 120620. doi: 10.1016/j.techfore.2021.120620.
  21. Gallego, A., & Kurer, T. (2022). Automation, digitalization, and artificial intelligence in the workplace: Implications for political behavior. Annual Review of Political Science, 25(1), 463-484. doi: 10.1146/annurev-polisci-051120-104535.
  22. Gig economy: How the EU improves platform workers’ rights. (2024). Retrieved from https://www.europarl.europa.eu/topics/en/article/20190404STO35070/gig-economy-how-the-eu-improves-platform-workers-rights.
  23. International Federation of Robotics. (2023). World robotics 2023 report: Asia ahead of Europe and the Americas. Retrieved from https://ifr.org/ifr-press-releases/news/world-robotics-2023-report-asia-ahead-of-europe-and-the-americas.
  24. International Transport Forum. (2023). Adapting (to) automation: Transport workforce in transition.  doi: 10.1787/905fdc2c-en.
  25. Irtyshcheva, I. (2021). The effect of digital technology development on economic growth. International Journal of Data and Network Science, 5, 25-36.
  26. Javaid, M., Haleem, A., Singh, R.P., & Sinha, A.K. (2024). Digital economy to improve the culture of industry 4.0: A study on features, implementation and challenges. Green Technologies and Sustainability, 2(2), article number 100083. doi: 10.1016/j.grets.2024.100083.
  27. Kärtner, R. (2023). Relationship between humanity and automation in the job market: The societal impact of unemployment from the technological revolution. Helsinki: Metropolia University of Applied Sciences.
  28. Katalin, N., & Gábor, S.Z. (2022). ICT-sector in Germany. Acta Academiae Beregsasiensis. Economics, 2, 54-65. doi: 10.58423/2786-6742/2022-2-54-65.
  29. Kraus, N., Kraus, K., Shtepa, O., Hryhorkiv, M., & Kuzmuk, I. (2022). Artificial intelligence in established of industry 4.0. WSEAS Transactions on Business and Economics, 19, 1884-1900. doi: 10.37394/23207.2022.19.170.
  30. Lima, Y., Barbosa, C.E., dos Santos, H.S., & de Souza, J.M. (2021). Understanding technological unemployment: A review of causes, consequences, and solutions. Societies, 11(2), 50. doi: 10.3390/soc11020050.
  31. Lopushniak, H., Poplavska, O., Danylevych, N., Kostyshyna, T., & Raupov, R., (2023). Organization of labor under conditions of uncertainty: The case of Ukraine. Problems and Perspectives in Management, 21(2), 294-308. doi: 10.21511/ppm.21(2).2023.30.
  32. Lund, S., Madgavkar, A.,Manyika, J., Smit, S., Ellingrud, K., Meaney, M., & Robinson, O. (2021). The future of work after COVID-19. Retrieved from https://www.mckinsey.com/featured-insights/future-of-work/the-future-of-work-after-covid-19.
  33. Lykholat, S., Mulska, O., & Rozhko, N. (2020). Labour market of Ukraine in the conditions of intensification of migration population processes. Economics, Entrepreneurship, Management, 7(1), 25-34. doi: 10.23939/eem2020.01.025.
  34. Melnyk, L., Karintseva, O., Kubatko, O., Derev’yanko, Y., & Matsenko, O. (2022). Restructuring of socio-economic systems as a component of the formation of the digital economy in Ukraine.  Mechanism of an Economic Regulation, 1-2(95-96), 7-13. doi: 10.32782/mer.2022.95-96.01.
  35. NASSCOM. (2023). Strategic review 2023: Priming for a “No Normal” future. National association of software and service companies. Retrieved from https://community.nasscom.in/communities/it-services/priming-no-normal-futurestrategic-review.
  36. Nosova, O. (2024). The effect of labour migration and structural changes on economic development. Bulletin of V.N. Karazin Kharkiv National University Economic Series, 106, 77-86. doi: 10.26565/2311-2379-2024-106-08.
  37. Oliinyk, O., Bilan, Y., Mishchuk, H., Akimov, O., & Vasa, L. (2021). The impact of migration of highly skilled workers on the country’s competitiveness and economic growth. Montenegrin Journal of Economics, 17(3), 7-19. doi: 10.14254/1800-5845/2021.17-3.1.
  38. Özgüzel, C., & Edo, A. (2023). Immigration and employment dynamics in European regions. OECD Regional Development Papers. Paris: OECD Publishing. doi: 10.1787/a20155a2-en.
  39. Petryshyn, L.Y., Pochueva, O.O., Lemeshchuk, M.A., & Zvozdetska, V.G. (2023). Problems and prospects of digital transformation of education: Psychological and pedagogical aspect. Academic Visions, 17. doi: 10.5281/zenodo.7695844.
  40. Piroșcă, G.I., Șerban-Oprescu, G.L., Badea, L., Stanef-Puică, M.-R., & Valdebenito, C.R. (2021). Digitalization and labor market – a perspective within the framework of pandemic crisis. Journal of Theoretical and Applied Electronic Commerce Research, 16(7), 2843-2857. doi: 10.3390/jtaer16070156.
  41. Salon, D., et al. (2022). The COVID-19 pandemic and the future of telecommuting in the United States. Transportation Research Part D: Transport and Environment, 112, article number 103473. doi: 10.1016/j.trd.2022.103473.
  42. Schmidpeter, B., & Winter-Ebmer, R. (2021). Automation, unemployment, and the role of labor market training. European Economic Review, 137, article number 103808. doi: 10.1016/j.euroecorev.2021.103808.
  43. Simionescu, M., Pelinescu, E., Khouri, S., & Bilan, S. (2021). The main drivers of competitiveness in the EU-28 countries. Journal of Competitiveness, 13(1), 129-145. doi: 10.7441/joc.2021.01.08.
  44. Skilled Immigration Act. (2024). Retrieved from https://www.bundesregierung.de/breg-de/aktuelles/fachkraefteeinwanderungsgesetz-2182168.
  45. Stephany, F., Kässi, O., Rani, U., & Lehdonvirta, V. (2021). Online labour index 2020: New ways to measure the world’s remote freelancing market. Big Data & Society, 8(2). doi: 10.1177/20539517211043240.
  46. The main results of the year: How freelance developed in Ukraine in 2024. (2024). Retrieved from https://igate.com.ua/news/30152-golovn-pdsumki-roku-yak-rozvivavsya-frilans-v-ukran-u-2024.
  47. Vega-Muñoz, A., Gónzalez-Gómez-del-Miño, P., & Espinosa-Cristia, J.F. (2021). Recognizing new trends in brain drain studies in the framework of global sustainability. Sustainability, 13(6), article number 3195. doi: 10.3390/su13063195.
  48. Wanniarachchi, H.E., Kumara Jayakody, J.A.S., & Jayawardana, A.K.L. (2020). An organizational perspective on brain drain: What can organizations do to stop it? The International Journal of Human Resource Management, 33(8), 1489-1525. doi: 10.1080/09585192.2020.1758745.
  49. World Economic Forum. (2023). The future of jobs report. Retrieved from https://www3.weforum.org/docs/WEF_Future_of_Jobs_2023.pdf.
  50. World Economic Forum. (2024). More and more jobs can be done from anywhere. What does that mean for workers? Retrieved from https://www.weforum.org/stories/2024/01/remote-global-digital-jobs-whitepaper/.
  51. Yemelyanova, L., & Mlynko, S. (2024). Analysis of the impact of technological factors on structural unemployment in developed countries. Economics and Region, 2(93), 62-70. doi: 10.26906/EiR.2024.2(93).3387.
  52. Zaslavska, K., & Zaslavska, Y. (2024). Impact of global factors on entrepreneurial structures: navigating strategic adaptation and transformation amidst uncertainty. Actual Problems of Innovative Economy and Law, 5, 26-32.