Technological advancements in face of, robotization, and automation are affecting the labor market and the very concept of work in different ways.
We have already crossed the doorstep of the fourth industrial revolution, which drastically changes the concept of work, employment, and education. Although some people try to play down the impact of technology on labor markets, this topic poses a problem for many employees and their livelihood.
Here is why.
Just like the current revolution in manufacturing, economy, and politics, all previous industrial revolutions have been driven by technology. Informatization and automation in the 1970s change the rules of the game in manufacturing and the world economy: with the development and spread of communications and globalization, information technology, products, and services become more flexible, efficient, and closer to customers.
Reorientation toward lean manufacturing and optimization of production caused the same shift as mass production did during the second industrial revolution but this time new technologies cause no little stir across different industries.
These technologies are based on certain technological advancements and new developments: AI, IoT, processors, and sensors, robotics are becoming increasingly powerful. They open new possibilities in industrial manufacturing: autonomous or semi-autonomous systems joints information, software, and mechanical components, which means that production processes can be more flexible and less labor-intensive.
Artificial Intelligence (AI) and machine learning, that is, the ability of IT systems to learn and solve problems independently, galvanize companies to implement robotization, industrial automation to boost their productions and increase profits.
With the help of artificial intelligence, so-called collaborative robots (cobots) can now work directly with humans in factories instead of being physically separated from them. Human-robot collaboration (HRC) is an integral part of the manufacturing industry, especially in the area of assembly.
The planning and use of these robots or other manufacturing systems are greatly facilitated by augmented reality, that is, by technologies that allow preview and effectively plan possible implementations using a computer.
3D printing capabilities also make production and products more flexible: companies and factories can, for example, independently produce components and spare parts or prototypes which they have previously had to purchase from suppliers.
The logistics processes are also improving. Logistics 4.0 or Smart Logistics processes are automated, i.e. they are managed according to requirements: with adaptive logistics concepts supply chains can be synchronized and employees can be replaced with autonomous vehicles, for example.
The way we work will change dramatically over the next few decades. Technological advances will also take a big leap in the next few decades. In the 18th century, it was the steam engine that ushered in a new era, today, digitization, robots and artificial intelligence (AI) are driving the change.
They automate factories and ensure that they can operate largely without humans. However, there are differing views on how much this will change the world of labor.
Researchers Michael Osborne and Carl Benedict Frey from Oxford University wrote that one in two jobs in the U.S. are in danger of being digitized.
Other researchers don’t find this as dramatic, and according to a survey by Bitkom, a majority of Germans (62 percent) see AI as an opportunity rather than a threat.
According to Enzo Weber – labor market researcher, macroeconomist, forecaster – concerns about mass unemployment caused by new technologies are not rational. Weber is a professor of empirical economic research at the University of Regensburg and heads the forecasting and macroeconomic analysis department at the Institute for Employment Research.
“Many of the activities that people did 100 years ago are now done by machines – by that logic, we should all have been unemployed a long time ago,” he says.
Usually, jobs disappear but it creates an avalanche of new professions. However, this involves considerable effort.
All in all, employees must be prepared for the new demands of the labor market. Weber cites the economic miracle of the 1970s as an example of such efforts.
At that time, the vast majority of labor markets were unskilled workers, most of whom had no education and training.
“These jobs disappeared millions of times over time, but more skill-demanding jobs appeared,” he says.
“Nevertheless, unemployment among low-skilled workers at the time rose significantly, exceeding 25 percent.”
The problem was a lack of adjustment, not the number of jobs.
Weber says that continuous support and the ability to gain new skills and qualifications are needed to cope with the inevitable changes.
Education as the Key to Successful Change
Obtaining new qualifications within the company may allow some employees to change their area of expertise so that no professional training would be required. Anyone undergoing new training within the company/factory can get recognition for qualifications from previous professional activities.
But some pitfalls are still present, such as retraining to become a nurse or IT specialist, Weber says. Various national employment agencies can facilitate solving this issue through educational programs.
Weber says it’s already happened at an appropriate scale, so a positive impact on the job market can be demonstrated. There is no one-box solution.
“It all boils down to individual career counseling, and everything varies from case to case.”
What makes this complicated is that financial support is an important factor for successful change management.
Manufacturing jobs, such as material handling or machine work, are particularly affected.
But office and commercial services, such as finance, retail, banking, accounting, are also affected: a high proportion of routine tasks are relatively easy to program.
On the other hand, the number of jobs in IT, science, and teaching will increase, as will the number of jobs that are difficult to automate, such as those in the social sector.
Some industries are changing more than others, thanks to new technologies.
Some professions are on the brink of extinction, a case in point could be shop consultants, bookbinders, cashiers, drivers, packers, and a list goes on.
Since book processing is now done almost automatically on an industrial scale, the number of employed bookbinders is noticeably decreasing.
Here are some other examples of possible jobs extinction:
Robots have replaced 20,000 workers at Amazon, and this is no joke, while Google and Tesla are actively working on cars with self-driving technology.
Chinese electronics manufacturer that produces iPhones plans to replace many workers with industrial robots.
The reasons for the extinction of certain jobs or positions vary.
The growth of machines and the automation of various work means that over time fewer and fewer working hours would be required to produce the same amount of goods.
Any revolution has its advantages and disadvantages. Not everyone is excited about technological advancements.
There are at least three reasons why.
This is not a new phenomenon. Computers and robots are taking over jobs, and no longer just in the low-skill labor. Computers are already writing news or advising customers on the phone. Soon they will be driving our cabs and trucks.
Digitization and automation as a profound process of transformation is well underway and is not limited to any single industry. Good thing is that according to the Leibniz Center for European Economic Research, digitalization and automation will create 1.8% more jobs by 2021.
However, people with interactive and analytical skills have a clear advantage. In contrast, low-skilled labor workers who do mostly routine tasks risk losing income and jobs. These people need to be prepared for everyday digital life and will have to adapt to the labor market through continuous training and professional development.
However, such training is not available in all countries of the world. In industrialized countries, the focus of technology is usually not on creating jobs or providing previously unavailable resources, but on optimizing their own production.
For example, robots have long been used to optimize production on assembly lines, while others have led to the creation of autonomous cars. In the end, the effect remains the same, because ultimately the use of automated technology threatens various jobs in mass production, or particularly in the future in transportation, such as taxi or bus drivers.
Sure, digitization creates new jobs, but they require highly skilled workers. Not all bus drivers and office workers will be retrained as data analysts or programmers. It’s easy to imagine that in a few decades there won’t be more jobs for most of society as we know it today.
The world’s current economy is based on the goal of full employment. If digitization continues as before, a profound restructuring of these systems will be required.
Mental stress in the workplace has increased dramatically.
Employees feel the need to always be on call and work on weekends because it is technically possible. The boundaries between work and leisure are blurring. The amount of work and its complexity are constantly increasing.
In addition, there is a constant fear of getting fired, not keeping up with technological changes, and being replaced by a computer.
Technology already provides continuous monitoring and analysis of employees and their results. Artificial intelligence systems use algorithms to evaluate candidates’ resumes or recognize employees who are about to fall ill.
Such findings can be used in a positive way, and fortunately, some laws impose fixed limits on such monitoring.
But experience has shown what is technically possible will be inevitably used in the future. The potential for abuse of such technologies is high. Many people increasingly feel helpless in the face of new technologies.
Digitization will continue. Despite all the criticism, we cannot stop this development. It is imperative that we create a fair framework and that people continue to be at the center of the labor world.
Last but not least, the COVID-19 crisis has raised the awareness of many companies that without digitization they will jeopardize their competitiveness.
For example, Leibniz Centre for European Economic Research (ZEW) is now claiming an investment phase in digitization, as the federal and state governments allocate funds to support the economy by adopting new technologies.
However, companies also need the right people for this change.
IT and digital experts are especially in demand across all industries, as companies need to hire app developers and implement the necessary measures.
Strong visibility and wide reach on the Internet, clear positioning, and professional connections across all digital media only make companies competitive in the long run.
Small and medium-sized companies often lag behind in terms of digitization and need to catch up. The field of digital marketing is a case in point.
While automation of customer engagement and retention has long been the norm for large companies and corporations, mid-sized businesses lack websites and apps that unlock important marketing potential.
However, not every company can afford to hire a marketing agency or IT staff. In such cases, outsourcing service providers are ideal and this trend opens up new career opportunities.
When it comes to the question of whether technological advancement is a curse or a blessing for the labor market, opinions vary widely. In any case, fears that technological advances will endanger existing jobs have long existed.
Undoubtedly, new technology is a double-edged sword for different businesses. This becomes clear in the example of artificial intelligence. Not only does it make life more pleasant and even longer thanks to medical applications, but it also leads to job losses in many areas of the economy.
And not everyone will appreciate it when their lives become more transparent because of privacy issues and personal data leakage.
Financial service providers will also have to face all the opportunities and risks. FinTech is just a small part of the iceberg. Technology will change customer interactions, internal processes, and ultimately business models as a whole.
Rapid adaptation will be critical to successful business management. After all, denial of technological progress may temporarily slow it down, but will never stop it.
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