International Organisation for Knowledge Economy and Enterprise Development
IKED - International Organisation for Knowledge Economy and Enterprise Development


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..:: Addressing technology and jobs

One of the most critical issues of our time has to do with the relationship between technology and job creation. It is well-known since decades that technology is critically important for productivity growth and competitiveness. Already Keynes (1930), Leontief (1952) and other leading economists predicted, however, that technology would ultimately replace jobs on a massive scale, on a magnitude that would lead to many people being laid off for good and the working day being reduced to a few hours at best. More recently, with the digital revolution, the World Economic Forum, the OECD, White House reports in the fall of 2016, McKinsey, and many academic researchers, have argued this development is now well under way.

What is then the path ahead? There is no way for us to refute taking advantage of technical progress, retreat and start walking backwards. With less technical advance, there will be a loss of competitiveness, industries will be wiped out and there will be less resources to support society.

Having said that, we have the right on have a say on what technical progress is desirable, and acceptable. In what respects automation and artificial intelligence are to replace human beings is not just a matter of business and economic pay-off. We now need to pass judgement what society we are to live in, and what future "social contract" we, as citizens and human beings, are entitled too. These issues cannot just be left hanging in the air as machines start acquiring consciousness. Just as in the case of authentication, authorisation, privacy and accountability, we need to define where the limits are to go.

So, "who" is to take the lead in all of this? Is it "government", as we often presume, which should take care of it all? Which governments will then take the lead, individually or collectively, in the era of rising populism, Brexit, Trump, Erdogan, and hardening authoritarian tendencies in many corners?

How to manage technology is, in fact, connected with our ability to handle globalisation. The rapidly enhanced cross-border flows of goods, services, investments and lot least immigration, whether workers or refugees, have become a favourite scapegoat for the destruction of jobs, particularly in stagnant regions and among "middle-class" workers. Studies that weigh in the effects of both globalisation and technical progress typically conclude that the latter has had a much greater impact on the labour market in most countries, including on the destruction of certain kinds of jobs and the declining demand for some kinds of competencies, and what associated impacts there have been on relative wages.

Many actors and stakeholders are struggling to come to grips with the situation. This includes the unions which often have adopted a defensive stance by defending conditions today, with limited consideration what change to embrace and what to resist.

Against this backdrop, a leading Swedish union, "Unionen", has initiated a project to review the relations between technology, productivity, and jobs, in which IKED experts take active part. Starting in 2014, this work has undertaken initial mapping and analysis to review the relationship between productivity and jobs and how that has been changing in recent years, and across diverse economic activities, under the influence of "digitalisation".

In the findings thus far, this work confirms that many jobs are on the way out, as a consequence of technical progress. It is true that others are being created but there will be growing pressure for speedy adaptation by way of re-skilling, resource allocation and the rise of new business activities. Managing this transition will not be "business as usual". Contemporary society is simply not equipped to manage a situation with requirements of such vast and swift reorganization, and to cope with the economic, ethical and social issues that arise in the process. Coming up with the appropriate answers is not merely a question of government policy but multiple stakeholders, including the industrial partners and civil society, need to engage constructively in this agenda.

Some of the challenge has to do with overriding frameworks, e.g. with regard to the organisation of working life versus education & competence development, as well as with regulations and taxes. Others have to do with processes that are highly context-specific, thus requiring the ability to tailor solutions to varying local conditions. Unions have an important role to play in paving the way for improvement in both respects, given their critical link to the work force and unique reach to conditions on the ground. This applies in Sweden as well as more broadly in Europe.

For findings from the first phase of the project, see presentation at Unionen, February 8th, 2017. A draft publication available in Swedish, presenting further assessment of the current situation and recommendations for the way forward, was the basis of a policy panel organized by Unionen in Almedalen, Visby, on July 5th, 2017. The steps outlined in the report will lay the basis for consultations and reform work in the coming year.

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