Industrial-labor cooperation and long-term competitiveness in the AI ​​era

Economic competitiveness is increasingly influenced by how effectively countries and industries adopt new technologies. The focus has shifted from what new systems can do to how economies and industries can apply them effectively and at scale. This includes expanding infrastructure, strengthening skills, redesigning jobs, and maintaining trust through periods of change and uncertainty.

While the focus is typically on governments, regulators and technology companies as central actors in this transition, trade unions and worker-led organizations can play a key role in ensuring these changes are effectively implemented and managed across sectors and labor markets. As technology implementation becomes increasingly complex both strategically and operationally, industrial relations are becoming a key element in resilience, workforce capability and transition management.

Organized labor is often said to be resistant to change. While tensions often arise and lead to strikes and unrest, with significant costs for both industry and workers, the reality is more nuanced. In many economies, trade unions work with governments, employers and technology providers through dialogue, collective bargaining and innovative partnerships to support worker readiness, shape workplace standards and respond to technological change.

When cooperation starts early, industries and economies are better placed to lead to sustained growth without disruption to innovation. The practical value of that cooperation is already evident in three areas.

One of the most obvious constraints to growth today is the difficulty in accessing not only capital and technology, but also the people with the skills to build, operate, and use new systems. According to the Future of Jobs Report, 63% of employers identify the skills gap as the biggest barrier to business transformation. In many industries, including manufacturing, construction, education, and energy, workforce challenges are as pressing as technology challenges.

This helps explain the growing wave of partnerships between employers, technology companies and labor organizations to build stronger skills pipelines. For example, the North American Building Trades Union (NABTU) is partnering with OpenAI on training pathways that connect data centers, power systems, and construction demands essential to digital expansion. Microsoft and NABTU have launched a free training program for skilled trades workers in response to the growing demand for electricians, technicians, and construction professionals who can handle new tools and processes.

A similar logic lies behind SmartStart, an initiative hosted by the Forum’s Center for Advanced Manufacturing and Supply Chain, which grew out of discussions at the Forum. Conversation Series: Business and Labor At Davos. The initiative brings together labor, business, and government leaders with the goal of preparing 1 million young Americans for future-ready jobs in these fields by 2035.

Another example can be found in the field of education. AFT has partnered with Microsoft, Anthropic, and OpenAI on digital literacy and training for educators as schools consider how new technologies can support teaching, management, and learning outcomes.

We know that worker consultation and training leads to better outcomes when bringing AI into the workplace, and that trust remains a key factor in implementation. Employees are more likely to engage with a new system if it is clear why it will be used, how decisions will be made, what data will be collected, and where human judgment is essential. Building this trust often relies on a clear framework developed through engagement between employer and worker representatives.

In sectors such as media and entertainment, banking, and customer service, unions have negotiated collective bargaining agreements that include pre-implementation consultations, disclosures when introducing automated tools, protections for worker data, and commitments to human oversight of sensitive decisions.

In the public sector, an agreement involving the Service Employees International Union and the Pennsylvania state government includes provisions for worker involvement in the evaluation and implementation of new systems, alongside oversight of automated decision-making. The agreement treats field employees as subject matter experts whose operational knowledge adds value by improving system design, identifying risks, and ensuring effective use in practice.

At the same time, a broader policy framework is emerging. In the UK, the Trades Union Congress (TUC) has advanced proposals on algorithmic management, transparency and worker voice, and in Germany, trade unions such as IG Metall and DGB are lobbying employers for the responsible use of technology in manufacturing and other industrial settings.

Recent research examining European economies suggests that increased worker participation may be an underappreciated driver of competitiveness, particularly productivity, innovation and smooth economic adjustment. There is also evidence that stronger worker representation is associated with lower income inequality, which can support stable growth over the long term. Therefore, structured mechanisms for continued employee input and labor-management coordination can be competitive assets as companies implement new technologies while maintaining employee engagement.

Therefore, countries with strong traditions of labor-management cooperation may have an advantage. In Germany, the co-determination model gives workers the right to formal consultation through works council and board-level representatives regarding significant changes to the workplace, including the introduction of new technology. This has provided an established channel for reaching agreement on the pace and terms of automation, digitization and workforce adjustment during a period of great industrial change.

In Singapore, a tripartite system brings employers, trade unions and the government together on skills policy, job redesign and economic restructuring. The National Trades Union Congress (NTUC) has supported reskilling, career transformation programs and sector-level adaptations as industries modernize, including recent skills-first recruitment and career progression initiatives. This year, NTUC launched AI-Ready SG. AI-Ready SG is a national initiative aimed at equipping workers with AI skills, helping companies transform their businesses and redesign jobs, and improve job matching as AI adoption accelerates.

Japan has been based on firm-level labor relations and an internal labor market formed by long-term employment, seniority-based wages, and firm-specific training. Although these practices are evolving, they have effectively supported workforce adjustment through redeployment, internal mobility, and incremental change rather than high external worker turnover.

These results do not occur automatically. Stronger skills pipelines, trusted workplace guardrails, and smoother workforce transitions all require sustained engagement between business, worker, and government leaders.

The need for cooperation between businesses and workers is not just a question of representation, but also of economic performance and resilience. Even when capital and technology are available, progress can stall if companies can’t find the right skills, if employees don’t trust the new systems, or if the economy can’t manage the transition smoothly. Long-term competitiveness depends not only on inventions but also on the ability to deploy innovations at scale, efficiently, equitably, and without disruption.

In this context, opportunities for constructive dialogue will become increasingly important. Throughout 2025, the forum brought together business, labor, and government leaders to identify shared priorities for labor and industry in areas such as advanced manufacturing, digital trust and AI, and trade and supply chains. The forum will continue Conversation Series: Business and Labor In 2026, we will focus on opportunities for collaboration to support workforce transitions, skills pipelines, and the effective deployment of new technologies across regions and industries.