Industry 4.0 — The adverse labor market because of IT
During my academic training in the different undergraduate, specialization or master’s degree courses I have come across a recurring theme that generates discrepancies and concerns in a quite notorious and constant manner. This is the fear of the threat that information technologies (or technology in general) supposedly generate towards the labor market, always in transformation.
Since decades ago (for those of us who witnessed it), the ghost of the computer destroying the jobs generated by the typewriter is still present materialized, on one hand, today as a desired and on the other as an undesired scenario called Industry 4.0; and it seems not to make it clear if what is coming is beneficial or a bad future for many jobs.
There are several articles that address this topic today, but what drives me to contribute with my perspective, is that in many cases this topic is insidious and represented in a negative way about what is expected; and of course, who would think that a fact such as technology taking away jobs could be seen as a positive thing? … Well from my perspective, in many cases, it is. And I would like to explain it.
What is Industry 4.0?
The term Industry 4.0 or Fourth Industrial Revolution consists of an effort for the complete digitization of the value chain in the company, through the integration of different technologies or techniques such as the massive integration of systems along the entire chain; data analysis, the use of IoT interconnected devices, artificial intelligence, etc.
The changes encompassed by this new paradigm in the industry are as follows:
- Integration of information and communications technologies in the manufacturing and service industry:
Process automation, less human intervention, extensive use of systems, actuators, sensors and automated devices are being implemented in companies more often. This has the direct effect of reducing the number of jobs. - Transformation of manufacturing companies into companies with a strong IT background
An information technology area is now needed everywhere… and this is related to the fact that, for example, even a kitchen device can now have an user interface providing valuable information to the user. Motor vehicles are no the exception. Who would have imagined 50 years ago that vehicle combustion systems would require a computer. Or that this computer would later also control the braking, traction, stability or suspension of the vehicle; or that it would eventually drive the vehicle itself?
Software programs are now in contexts never seen before and are now not only necessary in different industries, but often indispensable. - New paradigms and technologies:
Nowadays, marketing processes include social network analysis. Since many people spend many hours there. It has become a social paradigm in which companies now invest millions and everyone wants to be there. This leads to the creation and use of different technology such as AI. - New digital cultures and ecosystems:
E-sports, opinion leaders and digital content creators; they are members of a new culture and actors in an ecosystem that has become part of our life.
The adverse data that scares us
Fairly representative studies in this area show the data we worry about.
Frey and Osborne, Oxford professors, in their study “The Future of Employment: How susceptible are jobs to computerization?” (https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf?link=mktw) show a very negative future (at least for the American labor market), where 47% of jobs in the United States will disappear in the next 25 years.
This study indeed shows that this percentage of jobs are at high risk of being automated; a high percentage of models, telemarketers, cashiers, fishermen, among others would be affected. While this is potentially true, the study also shows (as seen in the accompanying graphs) that the level of academic training and income level have a direct bearing on the opposite.
In other words, the more educational or academic specialization one has, the less likely this is to occur. This is an important addition in this analysis, since it ends up defining that although 47% of these jobs are potentially at risk, it is those jobs that are not very specialized and require a basic level of knowledge that are called to be removed from the labor supply because they are easily automated. This seems to confirm what many of us understand as a benefit rather than a detriment in the emergence of technology, since this is a tool that contributes to facilitate and enhance the work activity, rather than canceling it. Those who do not challenge themselves in their training or those who leave aside academic specialization are the most affected.
In this context, many jobs will stop answering the phone, for example, and technology will create the opportunity for them (those who seek specialization) to analyze the behavior of customers who are served by an automated voice response AI system, for example. Technology will be the enabler that allows to participate strategically now of the solution, more than in an operational way, allowing then to generate more value in the company. Technology would not then, from this perspective, take away jobs; it would improve and empower them; transforming them. It would make it possible to make the leap towards specialization.
The same thing happened in the end with the initial example of the typewriter and the computer. Computing and its various derivative products and services are now a multi-billion-dollar industry. Possibly many people who worked in typewriter-related professions were harmed; but I believe that if we look at it in perspective, today the balance is much more than positive.
So, if you will, you can say that the participation of technology in different industries is not necessarily a threat to the labor market, but a great potential opportunity. The answer is to move away from the natural fear of change and yes of course, to adapt; to specialize.
And that, for me at least, is progress.
