Back from the IMD conference: “what is the future of work?” by David Autor, Ford Professor of Economics, MIT to answer this question. So the technology of the future: a job killer?
The answer is NO!
“New jobs are created because of the evolution of technology.
Professor Autor sets the tone and thru out the cliche with one simple example from the 90s. While we increased the number of ATMs, we thought that the number of employees in the bank will decrease. Bullshit indeed: the number of tellers staid constant and went up since 2000!
Well, that is simple: we create more value for the customer by offering new services. We don’t go to the teller to take cash, we go to the teller to get advice for loans for instance. And so the competencies required for being a teller have evolved too.
Our skills do have to evolve and it is indeed what happened in the last 70 years. In my home country (France), the % of bachelors went from 5% in the 50s to 60% in the 90s (purple curve)!
“Our population is reaching a higher level of education as technology evolves
Professor Autor divides into 4 categories the reason why jobs are created; so that the technology of the future is not synonym of “job killer”:
Reason 1 – the “Uber effect”
Taxi drivers got scared as Uber and Lyft came along.
“Better and cheaper products spur higher demand
In New York city the number of ride healing trips went from 475,000 (all taxis trips) in 2015 to 820,000 (less than 300,000 taxi trips and the rest from Uber and Lyft) in 2018. So yes new types of drivers came along!
Reason 2 – the “Walmart effect”
With new technologies, the cost of production is decreasing and so the product price is becoming cheaper and so accessible to more of us. And our salary has been increasing.
“Price declines free income and so spur consumption.
From 1901 and 2001, the share of household income spent on necessities fell from 85% to 55% in the United States!
Reason 3 – the “Network effect”
As we mentioned earlier the product price is becoming cheaper as technology evolves and so new products become affordable.
“Productivity growth on one industry raises demand in customer and supplier industries.
In 1980, to make a ton of steel we needed 10,1 human hours. In 2017 you only need 1,5 hours! It is a reduction of 85%! so yes people lost their jobs in the steel industry itself (less than 400,000 people). However, because the steel was cheaper 4 million jobs were created in Metal-Using industries like automotive and aerospace.
Reason 4 – the invention of new work
AI specialists, sommelier, golf card mechanics, teleprompter are new jobs that appear during the last 20 years. These jobs are not only related to the technology itself triggering new specialist but also the consequence of a revenue shift. For example, more leisure jobs appear that were unexpected.
As professor Autor mentioned that is the hardest subject to predict!
I know I am borderline with this picture.
“So is there nothing to worry about then?
That is what we will find out in our next article with Professor Autor.
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