How to Survive Changes in Employment, Without the Need for Winners and Losers
OPINION |

How to Survive Changes in Employment, Without the Need for Winners and Losers

AUTOMATION CREATES NEW OPPORTUNITIES BUT THE ONGOING DIGITAL TRANSFORMATION ALSO CREATES COMPLEX SOCIAL PROBLEMS THAT NEED TO BE ACTIVELY MANAGED. THIS IS WHY WE NEED TO INVEST IN INCLUSIVE WELFARE POLICIES AND THE DEVELOPMENT OF SKILLS. WITHOUT HALTING PROGRESS

by Italo Colantone, Department of Social and Political Sciences

Are you a techno-enthusiast? Or do you suffer from technological anxiety? Or maybe both? This should not be surprising: changes, of all kinds, fascinate and frighten people at the same time, as they are often not painless, even when they improve our lives. Automation and artificial intelligence are rapidly changing the world of employment. The media inevitably give us contrasting view of this reality, and it is not easy to orient ourselves between doomsayers and soothsayers.

Recently, I met Nino, an Italian bartender who can mix more than one hundred cocktails per hour. Nino is a robot. I was looking forward to ordering my aperitif at the bar it tends. Hadrian X is also a robot. Hadrian comes from Australia, and works as a bricklayer. It is capable of building a house single-handedly. Watch at videos on the Internet that portray the non-human construction worker. How can you not get excited about this? But then I read that 50% of jobs could disappear in the next few years due to computers and robots. Many jobs have already disappeared. Many other will almost certainly disappear. For example, soon it will no longer be call-center operators making telemarketing calls. It will be bots.

I am an economist, so I asked myself what will become of economists. According to an authoritative study by Carl Benedikt Frey and Michael Osborne, of the University of Oxford, I am 43% likely to be replaced by a computer. Do I have to worry? As almost always, the truth lies in the middle. The history of humankind is made of great technological advances. Transformations generate well-being and progress, but also carry significant social costs during the transition period, especially when a major, disruptive technology is adopted.

Anxiety linked to technological unemployment is a recurring phenomenon in history. And there is no need to go back to the English Luddites of the First Industrial Revolution. Search for an article dated February 1961 from Time which is titled “The Automation Jobless”. You might believe you are reading a piece from 2018. The author writes that automation is progressing so fast and is affecting so many areas that it is becoming one of the main problems of the United States. Well, if we consider the huge technological strides made since 1961, it seems almost incredible that there are still so many jobs available in the world. Should we therefore be optimistic about the changes taking place?

Let's start from a fact. Automation inevitably replaces workers with machines, thus destroying jobs directly. However, there are various channels through which new job opportunities are created. Consider only this: companies that innovate products and invent new manufacturing processes tend to succeed and expand, thus hiring new workers. Clearly, the new hires won’t work in tasks that are now performed by the machines; they will have different roles. Some job profiles will be completely new. Think of industrial robot programmers, big data analysts, or social media managers. These are all occupations that feed on recent technological changes.

The underlying message is very intuitive: automation creates new opportunities for all skills and profiles that are complementary with new technologies. It has always been like that. The world of employment constantly renews itself. Indeed, according to an estimate by the World Economic Forum, 65% of children attending primary school today will do a job that does not currently exist.

However, these positive considerations should not lead us to overlook the fact that there are complex issues associated with the digital transformation taking place. Technological change is similar to globalization. In the aggregate it is good for a country, but not everyone shares its benefits. There are winners and losers, at least in the short term.

Managing change is difficult and calls into question various actors: government institutions and business companies, schools and universities. The goal cannot be to curb progress, as some are proposing. Instead, we need to invest as much as possible in new technology. At the same time, however, structural change must be accompanied by inclusive welfare policies. It is a key point to ensure the social and political sustainability of progress, which does not deserve its name if it does not generate benefits that are broadly shared across society.

The main challenge, which concerns universities directly, is developing new skills. It is important to identify and invest in key knowledge and skills for the coming future of employment. In this regard, action should be taken on two fronts. On the one hand, we need to work as much as possible on the retraining of already existing employees. On the other, we need to make sure that young people leaving schools and universities have a kind of education that reflects the priorities of changing times, and takes into account the needs of companies. It is a challenge to be won with optimism and determination.

Read more about this topic:
Labor Law Needs a Check-Up
Robot Shock and Effects on Elections
It’s Easy to Adopt a Technology, But Hard to Renew Skills

Machines Are Now Replacing Creative Work Too
Europe. The Illusion of Advanced Services
Millennials Want More Feedback from Employers
Soon Even Banking Will Be a Sexy Job
An Operations Manager Makes Healthcare More Fluid

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