Business–labour cooperation and long-term competitiveness in the age of AI

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

While the focus usually falls on governments, regulators and technology companies as central actors in this transition, labour unions and worker-led organizations can play an essential role in ensuring these changes are effectively introduced and managed across sectors and labour markets. As technology adoption becomes increasingly strategically and operationally complex, labour relations are becoming an important factor in resilience, workforce capacity and transition management.

Organized labour is often portrayed as resistant to change. While tensions can and do arise in many cases leading to strikes and disruption – at huge costs to both industry and workers – the reality is more nuanced. Across a number of economies, unions are working collaboratively with governments, employers and technology providers through dialogue, collective bargaining and innovative partnerships to support workforce readiness, shape workplace standards, and navigate technological change.

When cooperation begins early, industries and economies are better placed to translate innovation into lasting growth without disruptions. The practical value of that cooperation is already visible in three areas.

One of the clearest constraints on growth today is not only access to capital or technology, but access to people with the skills to build, operate and use new systems. The Future of Jobs Report finds that 63% of employers identify skills gaps as the biggest barrier to business transformation. In many industries, such as manufacturing, construction, education and energy, the workforce challenge is now as pressing as the technology challenge.

This helps explain a growing wave of partnerships between employers, technology companies and labour organizations to build stronger skills pipelines. For example, North America’s Building Trades Unions (NABTU) have partnered with OpenAI on training pathways connected to data centres, power systems and construction demand essential for digital expansion. Microsoft and NABTU have launched free training programmes for skilled trades workers, responding to rising demand for electricians, technicians and construction professionals able to work with new tools and processes.

A similar logic sits behind SmartStart, an initiative hosted by the Forum’s Centre for Advanced Manufacturing and Supply Chains, and which grew out of discussions from the Dialogue Series: Business and Labour in Davos. The initiative brings together labour, business and government leaders, and aims to prepare one million young people in the US for future-focused jobs in these sectors by 2035.

Education offers another example. AFT has partnered with Microsoft, Anthropic and OpenAI on digital literacy and training for educators, as schools consider how new technologies can support teaching, administration and learning outcomes.

We know that worker consultation and training are associated with better outcomes when AI is introduced in the workplace, and that trust remains an important factor in implementation. Employees are more likely to engage with new systems when there is clarity around why they are being used, how decisions are made, what data is collected, and where human judgement remains essential. Building this trust often depends on clear frameworks developed through engagement between employers and worker representatives.

In sectors such as media and entertainment, banking, and customer service, unions have negotiated collective bargaining agreements that include consultation before deployment, disclosure when automated tools are introduced, protections for worker data, and commitments to human oversight in sensitive decisions.

In the public sector, agreements involving the Service Employees International Union and the Government of Pennsylvania include provisions for worker involvement in evaluating and implementing new systems, alongside oversight of automated decision-making. The agreement treats frontline workers 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, broader policy frameworks are emerging. In the UK, the Trades Union Congress (TUC) has advanced proposals on algorithmic management, transparency and worker voice, while in Germany, unions such as IG Metall and DGB are engaging employers on the responsible use of technology in manufacturing and other industrial settings.

Recent research examining European economies suggests that stronger worker participation may be an underappreciated contributor to competitiveness, particularly as a driver of productivity, innovation and smoother economic adjustment. Evidence also suggests that stronger worker representation is associated with lower income inequality, which can support stable long-term growth. As such, structured mechanisms for continuous worker input and labour-management coordination can be a competitive asset when companies adopt new technologies while maintaining workforce engagement.

Countries with stronger traditions of labour-employer cooperation may therefore hold an advantage. In Germany, the co-determination model gives workers formal consultation rights through works councils and board-level representation on significant workplace changes, including the introduction of new technologies. This has provided established channels for reaching agreements on the pace and terms of automation, digitalization and workforce adjustment during periods of significant industrial change.

In Singapore, the tripartite system brings together employers, unions and government on skills policy, job redesign and economic restructuring. The National Trades Union Congress (NTUC) has supported reskilling, career conversion programmes, and sector-level adaptation as industries modernize, including a recent push towards skills-first hiring and career progression. This year, NTUC launched AI-Ready SG, a national initiative designed to equip workers with AI skills, support companies in business transformation and job redesign, and improve job matching as AI adoption accelerates.

Japan has been based on enterprise-level labour relations and internal labour markets shaped by long tenure, seniority-based wages and firm-specific training. While these practices are evolving, they have effectively supported workforce adjustment through redeployment, internal mobility and gradual change rather than high external labour turnover.

These outcomes do not happen automatically. Stronger skills pipelines, credible workplace guardrails and smoother workforce transitions all require sustained engagement between business, labour and government leaders.

The case for business-labour cooperation is not merely about representation, but also about economic performance and resilience. Even where capital and technology are available, progress can stall if companies cannot find the right skills, if employees do not trust new systems, or if economies don’t manage transitions smoothly. Long-term competitiveness will depend as much on invention as on the ability to deploy innovation at scale, effectively, fairly and without disruptions.

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