Skip to main content
Part of complete coverage on

WEF founder says technological revolution 'will destroy employment'

By Oliver Joy, CNN
January 23, 2014 -- Updated 1750 GMT (0150 HKT)
  • WEF Founder Klaus Schwab said "technological revolution" could destroy employment
  • Unemployment across the EU has remained stubbornly high at 10.9% since May
  • Schwab said policymakers are facing a "generational crisis of tremendous dimension"

(CNN) -- The technological revolution is destroying jobs in Europe, according to the founder of the World Economic Forum (WEF), whose annual meeting is under way in Davos.

In an interview with CNN's Richard Quest, WEF chief executive Klaus Schwab said not enough is being done about structural unemployment in Europe and that advances in technology are hurting jobs.

"We have such a technological revolution going on at this moment. This will destroy employment. We have to make sure that the destroyed employment is replaced by better jobs and that's not happening at the moment," Schwab said.

WEF -- held on the remote snowy peaks of Davos, Switzerland -- is where world leaders and business giants meet each year to discuss issues affecting the global economy.

Borg: Economic recovery still needs help

Schwab warned that today's policymakers and business community are facing the threat of a "generational crisis of tremendous dimension."

"We have to make sure that the global leaders who are coming here, politicians and business leaders, take on again a longer term view because otherwise we have one crisis after the other one," he said.

Davos: Where are the women?

Both the U.S. and Europe have been struggling to cope with recessions, low growth and high unemployment since the collapse of Lehman Brothers in 2008, a crisis that has reverberated through the global economy for over five years.

Finnish president on Europe's turnaround

While the U.S. -- the world's largest economy -- has shown signs of an economic recovery with unemployment falling below 7% for December 2013, many nations in Europe are still suffering from the fallout of a five-year debt crisis.

Davos: Ireland's economy back on track

Unemployment across the European Union's 28 member states has remained stubbornly high at 10.9% since May, with jobless rates in countries such as Spain and Greece hovering around the 25% mark, and youth unemployment over 50%, according to Eurostat, the European Union's statistical office.

Read more: Lagarde warns against 'complacent' Europe

Schwab said the key to restoring Europe's economy is to close the competitiveness, the measure of a nation's productivity, between member states.

"You could have seen 20 years ago already that something is wrong with Europe because you had the northern countries, particularly Germany, performing very well, the southern countries lagging behind," he said.

Since the eurozone debt crisis broke out in Greece in late 2009, four countries have requested bailouts from Europe's rescue funds, including Greece, Spain, Portugal, Ireland and Cyprus.

But Schwab said nations in southern Europe are beginning to show signs of recovery.

"[Competitiveness] should change and we see the first signs in Spain. We see very timid signs in Italy and in Greece. We will have to see what's happening in France."

Read more: Europe feeling the economic winds of change

The French economy has struggled for growth for two years due to high labor costs and government policies that critics say are punishing big business and the country's wealthy such as a 75% income tax rate for top earners.

Read more: Opinion -- time Hollande got his affairs in order

However, at a news conference earlier this month French President Francois Hollande said he would tackle the country's high payroll taxes to improve competitiveness.

Schwab said: "France is a large economy and in the last reports it has come down, I hope, now the necessary steps are taken to improve France's competitiveness."

Read more: Europe would have suffered without single currency

Watch more: Latvia's transition to the euro

Part of complete coverage on
Marketplace Europe
January 16, 2014 -- Updated 1631 GMT (0031 HKT)
Marketplace Europe visits Latvia to see how the Baltic country has made its transition to the Euro from the Lat.
January 16, 2014 -- Updated 1630 GMT (0030 HKT)
CNN's Nina Dos Santos visits Latvia to speak to the country's outgoing Prime Minister and the prospects for the eurozone's 18th member.
January 2, 2014 -- Updated 1640 GMT (0040 HKT)
Malta is the gateway to Europe and on the frontline of the immigration flows. Isa Soares reports from a detention center on the Mediterranean island.
January 2, 2014 -- Updated 1641 GMT (0041 HKT)
CNN's Isa Soares speaks with people on the streets of Valletta who say their country can't cope with more migrants from Africa and the Middle East.
January 9, 2014 -- Updated 1006 GMT (1806 HKT)
Malta cannot afford to continue supporting migrants from war-torn countries in its over-crowded detention camps, the country's foreign minister has told CNN.
December 26, 2013 -- Updated 2123 GMT (0523 HKT)
Slow recoveries, bailouts, and youth unemployment. Richard Quest speaks to Europe's top CEOs about the issues of 2013.
December 26, 2013 -- Updated 2114 GMT (0514 HKT)
CNN's Richard Quest speaks to economist Bob Parker about defining moments of 2013 and about what to expect in 2014.
December 5, 2013 -- Updated 1815 GMT (0215 HKT)
Estonia is setting the pace for other European nations with a thriving economy and its tech industry, according to the Baltic nation's leader.
December 5, 2013 -- Updated 1903 GMT (0303 HKT)
The Baltic nation of Estonia is developing its oil shale energy reserves in a bid to become energy self-sufficient.
November 29, 2013 -- Updated 0925 GMT (1725 HKT)
Europe must stop being nationalistic if it wants to help a lost generation of workers, the regional boss of U.S. conglomerate General Electric says.
November 14, 2013 -- Updated 1706 GMT (0106 HKT)
Peer at the windows and you'll spot big colorful chairs, plastic plants and a huge bed, but this is no department store.
November 19, 2013 -- Updated 1006 GMT (1806 HKT)
There once was a time, many years ago, when the sounds of bagpipes struck fear into the stomachs of Englishmen.
November 11, 2013 -- Updated 1116 GMT (1916 HKT)
Greece is on the way to economic recovery as investor faith returns to the recession-ridden eurozone nation, an executive at Greece's largest bank has told CNN.
November 8, 2013 -- Updated 1200 GMT (2000 HKT)
Could Greece's famous spice help the country's farmers through a four-year long economic crisis.
November 1, 2013 -- Updated 1307 GMT (2107 HKT)
One of the masterminds behind the euro says Europe would have suffered a far worse fate if the single currency had never been created.
October 31, 2013 -- Updated 1741 GMT (0141 HKT)
Nina Dos Santos visits the Dutch city where the European treaty carrying the city's name came into force 20 years ago.
October 25, 2013 -- Updated 1510 GMT (2310 HKT)
As Spain continues its drive to slash budgets and cut spending, one of the nation's favorite pastimes is under threat as ministers look for ways to boost productivity.
October 24, 2013 -- Updated 1617 GMT (0017 HKT)
The high commissioner of Brand Spain talks about getting the country back on its fee and attracting business.