Computer technology & employment growth

Computer technology & employment growth

1. Areas of technological change

   • Financial services
   • Clerical
   • Medicine
   • Retail
   • Manufacturing
   • Law
   • Education

2. Long term impact of technology

   • According to history, no long-term trend of eliminating jobs for people
     • Question? Are computing technologies different and so do create a involuntary long-term unemployment?
   • Future: Dismal prospects for many types of jobs

3. Short term impact of technology

   • Consequences
     • Elimination of many types of jobs
       • Rapid technological change has been destroying jobs faster than creating them
     • Reduce in demand workers
     • Median income fails to rise even as GDP soars
   • Advantages
     • Higher productivity
       • Entering new market more quickly
     • Wealthier society
     • jobs are made easier, safer, faster & more productive

4. History in technology and employment growth

   • "Just a shock; workers need to adjust skills and entrepreneurs create new opportunities based on new technologies"
     • Jobs rebound
   • No historical patterns show shifts leading to a net decrease in jobs

5. NO ONE KNOWS; arguments against technology being the cause of unemployment

   • Labor economists: "Data far from conclusive"
     • "Are new technologies responsible for the lack of job growth"
     • "Difficult to extricate the effects from technology from other macroeconomic effects"
     • "Labor hours are a crucial indication for growth and wealth"
     • Recent technological change can be different than anything seen before
   • Watson: "Automization also used to make human workers more efficient, not to eliminate them"
   • David Autor: "Sluggish growth in employment are one big puzzle, but not a lot of evidence is linked to computers"
     • "Jobs can change a lot without there being huge changes in employment rates"
   • Leonard: "On the one hand progress, on the other hand same old problems. The big challenge is uncertainty
     • "People are still needed to deal with changes in the environment and reacting to unexpected events"

6. Current situation according to Brynjolfsson & McAfee

   • GAP: Economic growth and productivity no longer parallel to job creation due to technology
   • PARADOX: productivity at record levels, innovation never been faster, but falling median income and fewer jobs
     • People are falling behind, because technology rising too fast and our skills and organizations aren't keeping up
   • POLARIZATION of the workforce and the HOLLOWING OUT of the middle class
   • AUTONOMY ECONOMY (internet, data): digital processes talking to other digital processes and creating new ones
   • ECONOMIC WINNER & LOSERS: rapid acceleration of technological progress has greatly widened the gap between economic winners and losers
     • Income inequalities