Technology generating unemployment

Ideally, growth attributable to improved technology should accompany increased job opportunities. But the global economy, which is struggling to keep pace with growth and is required to create adequate jobs, spells otherwise, according to a report presented at the World Economic Forum (WEF) in Davos, Switzerland recently. The report suggests that some five million jobs may disappear worldwide in the next five years as a result of changing work methods, a phenomenon which has been blamed on the so called "4th industrial revolution". The jobs will be lost either to robots or automation because of a drastic change in the workplace to be caused by artificial intelligence, according to a WEF study. Robots will take over jobs that require more "narrow skills" such as administration or clerical work as employers start seeking new core skills such as "critical thinking, emotional reasoning and active listening".
We stand on the brink of a technological revolution that will fundamentally alter the way we live and work. The transformation will be unlike anything that mankind has experienced before in scale, scope and complexity.
The First Industrial Revolution used water and steam power to mechanise production. The Second used electric power to create mass production. The Third used electronics and information technology to automate production. Now a Fourth Industrial Revolution is building on the Third, the digital revolution that has been occurring since the middle of the last century. It is characterised by a fusion of technologies that is blurring the divides between the physical, digital and biological spheres.
Mobile Internet and cloud technology will make some jobs redundant, while the "Internet of Things" will eliminate some workers in these roles. Not everyone will be impacted equally, but the jobs most at risk are either office or administrative ones.
The WEF report estimates more than 7 million redundancies by 2021, mainly in management and administration, particularly in healthcare, construction and mining sectors. But the report also sees nearly 2.1 million new positions being created for computer programmers and engineers, and banking, accounting and insurance professionals although this still leaves a substantial gap. Apart from creating job redundancies, the rise of the robots or the 'man versus machine fight' will affect gender equality at work.
Women have been seen more vulnerable to the job losses as a lesser number of them are at areas, which will generate new jobs, such as engineering, architecture, IT, software, development and analytics. Over the next five years, while five women will lose their jobs, one will gain a job and when the same gets applied to men who are comparatively less vulnerable, they will see three jobs lost for every one gained.
At the same time, the revolution could yield greater inequality, particularly in its potential to disrupt labour markets. As automation substitutes for labour, the net displacement of workers by machines might exacerbate the gap between returns to capital and returns to labour.
We cannot foresee at this point which scenario is likely to emerge, and history suggests that the outcome is likely to be a combination of the two.
In addition to being a key economic concern, inequality represents the greatest societal concern associated with the Fourth Industrial Revolution. Technology is, therefore, one of the main reasons why incomes have stagnated, or even decreased, for a majority of the population in high-income countries. The demand for highly skilled workers has increased while the demand for workers with less education and lower skills has decreased. The result is a job market with a strong demand at the high and low ends, but a hollowing out of the middle.
This helps explain why so many workers are disillusioned and fearful that their own real incomes and those of their children will continue to stagnate. It also helps explain why middle classes around the world are increasingly experiencing a pervasive sense of dissatisfaction and unfairness.
On the supply side, many industries are seeing the introduction of new technologies that create entirely new ways of serving existing needs and significantly disrupt existing industry value chains. Major shifts on the demand side are also occurring, as growing transparency, consumer engagement and new patterns of consumer behaviour (increasingly built upon access to mobile networks and data) force companies to adapt the way they design, market and deliver products and services. A key trend is the development of technology-enabled platforms that combine both demand and supply to disrupt existing industry structures.
On the whole, there are four main effects that the Fourth Industrial Revolution has on business-on customer expectations, on product enhancement, on collaborative innovation, and on organisational forms. Whether consumers or businesses and customers are increasingly at the epicentre of the economy, which is all about improving how customers are served. Physical products and services, moreover, can now be enhanced with digital capabilities that increase their value. New technologies make assets more durable and resilient, while data and analytics are transforming how they are maintained. A world of customer experiences, data-based services, and asset performance through analytics, meanwhile, requires new forms of collaboration, particularly given the speed at which innovation and disruption are taking place. And the emergence of global platforms and other new business models, finally, means that talent, culture, and organizational forms will have to be rethought.
Overall, the inexorable shift from simple digitisation (the Third Industrial Revolution) to innovation based on combinations of technologies (the Fourth Industrial Revolution) is forcing companies to reexamine the way they do business. The bottom line, however, is the same: business leaders and senior executives need to understand their changing environment, challenge the assumptions of their operating teams, and relentlessly and continuously innovate.
But such an approach is no longer feasible. Given the Fourth Industrial Revolution's rapid pace of change and broad impacts, legislators and regulators are being challenged to an unprecedented degree and for the most part are proving unable to cope with. This means regulators must continuously adapt to a new, fast-changing environment, reinventing themselves, so they can truly understand what it is they are regulating.
The Fourth Industrial Revolution will also profoundly impact the nature of national and international security, affecting both the probability and the nature of conflict. The history of warfare and international security is the history of technological innovation, and today is no exception. Modern conflicts involving states are increasingly "hybrid" in nature, combining traditional battlefield techniques with elements previously associated with non-state actors.
The Fourth Industrial Revolution, finally, will change not only what we do but also who we are. It will affect our identity and all the issues associated with it: our sense of privacy, our notions of ownership, our consumption patterns, the time we devote to work and leisure, and how we develop our careers, cultivate our skills, meet people and nurture relationships.
In the end, it all comes down to people and values. We need to shape a future that works for all of us by putting people first and empowering them. In its most pessimistic, dehumanised form, the Fourth Industrial Revolution may indeed have the potential to "robotise" humanity and thus to deprive us of our heart and soul.
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