Throughout the 19th century and the first half of the 20th century, employment in labor jobs such as factory workers, construction workers, machine operators, and office workers grew faster due to the significant building of the infrastructures such as high rise buildings, highways, bridges, and manufacturing products. But around the early 1980, something changed as labor markets across developed countries began to decrease with many jobs were shifted to lower cost countries. Instead, employment in knowledge jobs began to increase at a much faster rate. The main reason is the development of information technology (IT) with computer-control robots replace labor works in many factories. Today, automobile manufacturing, machinery shops, steels industry and aerospace industry, all use automated control systems to do works.
Of course, computers cannot compete with the analytical tasks of high-skilled knowledge workers but they do directly affect the need for labor people like assembly-line workers or those doing certain manual tasks. These works can be translated to a set of instructions which a computer control machine can easily follow (Automation). There is a high possibility that many of these labor jobs will completely be replaced as it is more profitable to operate robots than to pay human workers. According to several studies, many low-skilled labor jobs will be eliminated in developed countries within the next ten years.
According to a study by David Autor of the Massachusetts Institute of Technology (MIT) who used data from the U.S Department of Labor on the tasks involved in different occupations. By classifying these tasks as manual/routine labor or non-manual/non-routine labor, Dr. Autor was able to identify which occupations are more or less vulnerable to automation. For example, he identified the jobs of secretaries, bank tellers and accounting clerks as among those will be replaced by automation. (We already saw many banks used Automated Teller Machine (ATM) to replace Bank teller and Secretary’s typing works were done by Word Processing software). Another study by the London School of Economics (LSE), which uses industry data from 11 countries ( 9 European plus Japan and America) also found that company that adopted IT at faster rates have the fastest growth, higher profits than non IT using company. They also have more demand for highly educated workers, willing to pay higher wages for their knowledge but have the sharpest declines in demand for people with lower levels of education or labor workers.
Today, the adoption of IT is a key competition in globalization. According to a study from Stanford University, most companies are adopting IT as the mean to increase profits, faster growth and to expand to global market but there is another reason. The author looked at rates of IT adoption within the U.S and Europe and found that with globalization, many companies are facing direct competition from developing nations such as Brazil, India and China as they entered the World Trade Organization (WTO). To have better competitive advantage, these companies have to respond quickly by innovating more in order to move up to higher position in the value chain. In the near future, competition is no longer on costs but on productivity and innovation. However, the interesting fact is growing developing countries such as India. Brazil, and China are also increasingly using computer-control systems as they are improving their productivity and profitability for global competition, despite the fact that they have very large labor population. The study concluded that the effects of information technology on employment and job market will continue to change the political situation of many countries. Technology will enable higher-end jobs to move to countries with large pools of highly educated workers and create alliances among them. This will create more competition between alliances as globalization continue to impact everything. Of course, this is not yet a major factor trends but it could change relationship between countries and the balance of world power.
Based on these studies, it is obvious that for much of the 21stcentury, people’s job prospects will rise with the education they have. The higher education, the better job prospect and country with better education system will have significant advantage over others. The future world will become more polarized, not about the “Rich” and “Poor” but about the “Educated” and the “Uneducated”.
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Prof. John Vu
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Source: SEGVN