FINAL CLUSTER ANALYSIS - Kohtla-Järve

The adoption of technology in the sector carries some uncertainty
and raises certain issues. It is not entirely clear to
what extent new technology will improve working conditions
and job opportunities and to what extent its impact
will be negative. It has led, and will continue to lead, to
changes in the quantity and structure of labour demand in
the sector. The International Union of Food, Agricultural,
Hotel, Restaurant, Catering, Tobacco and Allied Workers’
Associations (IUF) argued that new technologies require
less-skilled staff and so result in many job losses in
the industry. Moreover, the IUF argues that technology will
devalue wages by deskilling the remaining workforce. In
contrast, timesaving technology could benefi t workers in
the sector by reducing the stress and pressure placed on
workers, allowing them to work in a more favourable environment.
Given the small scale of many of the enterprises in this sector,
the adoption of technology is likely to be very sensitive
in terms of the cost of implementation and the expected
fl ow of benefi ts over time. Another infl uence in the adoption
of new technologies is likely to be legislation on working
conditions and health and safety standards. Adopting
new technologies generally raises working conditions, but
its impact on labour demand is unclear. Timesaving technology
may lead to reduced labour demand or it may create
new work opportunities, and specialist technology may
require new skills that demand higher wages.
It is not clear if globalisation, changes in consumer demand
and the internet will benefi t the sector. It appears to have
made consumers more mobile and fl exible as shoppers.
It may well be that it leads to a dichotomy where some
companies successfully adapt to these forces while others
fail to adapt and become unable to compete. Furthermore,
these forces probably favour larger businesses more than
small ones. Their greater scale and pool of resources makes
Final Cluster Analysis
it easier for them to exploit these new opportunities. At the
same time, although current conditions in the hotels and
catering sector are forcing small enterprises to fi nd new
ways to compete in order to survive, potential benefi ts
from technologies to small enterprises are likely to be limited
because their size limits the opportunity to generate
economies of scale. As a result, further consolidation and
an increasing presence of chains within the sector can be
expected.
economIc DrIvers
Globalisation is one economic driver infl uencing the hotels
and catering sector. Through the free movement of labour
and capital as well as economic and political integration,
globalisation has opened up new geographical and consumer
markets. These present both threats and opportunities.
For all companies, there is the prospect of tapping
into new consumer and new labour markets. However, for
existing workers, this also throws up the potential threat
of more effi cient and/or better-skilled labour elsewhere
and the threat of new destinations, cultures and companies.
Another economic driver is the recent, rapid expansion
of low-cost air travel. This has made it easier for agents
to travel as both tourists and workers, but it also creates
further problems. Together, these drivers stimulate other
socio-economic and political issues concerning skills levels,
migration and working conditions.
envIronmental DrIvers
Adverse weather patterns in recent years have pushed the
issue of climate change and energy use into the political
mainstream. Adverse weather itself is likely to aff ect the
sector where it forms part of the tourist industry situated in
areas at risk from climate change, with coastal and winter
sports resorts most at risk. Politically, part of the response
is to target air emissions and energy effi ciency. In this way,
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