written by Alain Veuve MD, Switzerland
The fairy tale of job destruction!
The fairy tale of job destruction!
26.11.2015 | Categories: Digital Transformation
About author Alain Veuve Alain Veuve MD, Switzerland

Not a week goes by that I don’t read about how digitization destroys jobs. People have nowhere to go. Technology renders work obsolete and machines are taking over. Sometimes such predictions do get a carried away too much. In fact, it is far from the truth that technology makes human work pointless. If anything, it is the contrary. Nevertheless, it does change labor.

Facts

The total number of jobs has been ever-rising. While wars and crises can cause economic growth to take a tumble, in the long run the number of workers rises steadily. So jobs are actually increasing.

In 1950 the total number of jobs in West Germany was 19.5 million. 40 years later, in 1990, this number had already risen to 30.4 million. In 1991, due to German reunification, another eight million jobs were added to that number. The trend for growth continued, leading to 41 million jobs in 2012. So, depending on the calculation, we have seen an increase by 65 percent over the years.

You are certainly going to counter that this development is only logical as there is a much higher population in Germany today as well. You are correct. But the increase in population was only by eleven percent.

We have to take into account, though, the enormous gain in productivity, as evidenced by this example from the German Farmers' Association: whereas in 1950 one farmer was able to sustain ten people, in 2012 that number had multiplied by 13 to 130 people.

Even though technology allows for incredible productivity gains, the number of workers still increased considerably. The bottom line is simple: there are more jobs.

It is much more than accurate, however, that work as such is going through a process of change. Which is where the problems begin.

My father, for example, had trained as a typesetter and worked in the business during the 1960s. That job entailed setting lead letters in a frame until the text was complete (mirror-inverted and upside down!) and could be used as a printing plate. It was a laborious and complex job that left no room for mistakes. It took a lot of time to “set” just one single page of a book.

When the first electronic systems emerged later on, exposing films and then etching the setting copy onto a print cylinder, it allowed for a faster, safer and improved printing process. My father’s original profession, the handling of lead letters, vanished. Only one of the original machines was kept – for purely nostalgic reasons.

Nonetheless, my father remained loyal to his employer and the printing industry, even though he never worked as a typesetter on a computer screen. There were younger and more apt colleagues for that. Instead, he underwent a natural transition towards different fields such as sales, customer service and team leadership. He eventually concluded his professional career where it had begun – in the printing industry.

Today, typesetting as it used to be is virtually non-existent – technology has digitized all the necessary steps, from the drawing up of the text until its actual printing.

Slow transition towards other professions is possible

Our parents’ generation has demonstrated that a slow transition towards a different profession can work if the changes that necessitate the transition do not come about too rapidly. Unfortunately, that is exactly what is happening at the moment; technological progress is taking place at an ever-faster and stronger pace. Correspondingly, the industry sectors are turned upside down and so are the employees.

Accelerated technological progress thwarts slow transition

If technology’s progress happens too fast it won’t be possible anymore to carry out this slow transition. Companies will no longer be able to afford this and will be forced to take more drastic measures.

Applied to the case of my father this would have meant a direct adoption of automated systems following the abandonment of lead typesetting. Without a doubt, any employer would have been hard-pressed to place 25 typesetters somewhere else in the company practically overnight. We don’t even need to talk about wanting (as in “not being allowed”) to do so in the economic climate of the 1970s.

“Mainly a problem of expectations”

I would have liked to make this sentence my main argument but I realize that it does a grave injustice to those suffering from such sudden changes. It is simply morally wrong to talk to a laid-off Opel employee and father about “getting one’s expectations in line”.

Still, taken in a social context, I do not think that this concept is literally “wrong”:

We have to abandon the expectation that an individual’s professional career is supposed to be linear.
Alain Veuve

Not that same old story again, you think? Yes, everyone agrees with this aforementioned statement. Yet, when yet another industrial company “X” automates significant parts of its manual work processes, the protests ring loud and clear. We need to rethink things regarding this issue. All of us.

Everyone is responsible

Those of you who think it affects only employees haven’t really grasped the problem

Entrepreneurs

It’s outdated to think the economy could exclude itself from the process – along the lines of “You’ve got to be flexible.”

I think everyone must shoulder the responsibility to enable more flexibility. Companies must recognize early-on which technologies will have which consequences and carry out their personnel planning and utilization accordingly.

It simply won’t do to wait until the new robotics production line is available and then to announce procurement of the machine and collectively dismiss countless employees within a few months of each other. This is irresponsible – particularly regarding one’s own company.

After all, employees have an enormous amount of expertise that is only stored inside their minds. This has to be utilized. The knowledge is unstructured and not always easily accessible, but it is key for long-term success.

Employees

Of course employees have to become more flexible. In this matter I’m more confident, though, because I see many younger people that don’t even intend to do the same job their entire lives. And yes, this can been observed with people doing “simple” jobs, too.

The State

The State has the role of enabling this change through legislation. Its job is not to force change. But it must provide the opportunities so that society and the economy can continuously reform themselves. The more this reform process becomes a permanent one, the better. For this means that societal transition can occur in smaller steps, thus making it easier for everyone. What we can currently observe is that we cling far too much to things and perceptions that are accepted as universally true.

A life in the comfort zone

It must be clear, however, that this lifestyle with a secure income and a clearly defined professional area has come to an end. It was only possible because the “saturation society” of the past 100 years provided us with an economic pseudo reality.

In fact, this really only applied to the generation that was socialized immediately after the war (that is, the one that didn’t directly experience scarcity and suffering) and has been retired during the past two decades (before digitization really took off).

This model of life in the comfort zone never had a claim to permanence. So please, let us say goodbye! I can hereby aver that the number of opportunities will easily compensate for the higher degree of insecurity. You will now counter with ideology . . . go right ahead!

For every time has its conceptual roots. In the years after the war it was the desire for material security. Today an increasing degree of self-actualization has come to the fore. And this just won’t happen by parking on the couch to catch your favorite TV show every evening.

No, the really interesting things in life start at the point when they become insecure. Neither dangerous nor threatening, but not everything should be taken for granted or be predictable. I think that, in this context, the demand for more flexibility and material risk tit into our time quite well.

Comprehensive economic agility and reform

So, if company and employees must become more agile in order to survive in an ever-more dynamic environment, then the logical conclusion is that the economy as a whole must become more agile too.

In this regard the need for broad-based reform is enormous and my impression is that these reforms are being blindly ignored. Here are some non-related, completely independent examples:

  • For one thing, there is the idea of paying for labor. In an earlier post I showed that personal working time has drastically shrunk and will continue to do so. How can this possibly work, if payment for labor continues to be linked to time?
  • For another, the demographic developments are clear: the population is aging and we can’t really predict the actually scope, as a lot of technology in this area will continue to improve the situation (leaps in technology and personalized healthcare)
  • And thirdly, the foundation for the retirement economy, a functional capital market, is currently in the process of disappearing forever. Or do you really think that we will reach an interest rate level comparable to the one we had 30 years ago? On what basis is the supposed to happen? Will capital become less or more important? Hasn’t access to and ownership of material goods slowly but fundamentally become disconnected from possessions (as a foundation for revenue from interest) during the past two decades?

Speaking the plain truth and moving on

But instead of looking for solutions together and addressing the expectations for instance regarding further qualifying future retirement pensions, we delegate these discussions to the politicians, who turn the whole issue into a shortsighted, tactical theatrical production driven by individual interests.

After all, it’s easier to argue about petty details, than it is to address threatening, comprehensive topics. That always leads to reform. And reforms aren’t popular. But it would be more agreeable to permanently advance reform than to accept large-scale change. Our grandparents could tell us a thing or two about that.