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Fourth Industrial Revolution (McKinsey (2017) (China (will have the…
Fourth Industrial Revolution
Millington (2017)
Class-less targeting of effected peoples
increase self-employment
benefit women, youth, older workers and disabled
vulnerable workers and groups will need the most support
'internet-enabled' offshoring of jobs to developing economies has continued to be an important global trend
not affecting jobs with a lot of human interaction
Shift of manufacturing location
Developed economies might take manufacturing back with new technology from what used to be outsourced
Effect will be substantial to emerging economies
the nature of technological change this time is different from earlier industrial revolutions
The benefits are not widely shared incentives, inequality
the scope of such change has also widened considerably
the pace of technological change has accelerated
For three major reasons
rapid wage gains in lage manufacturing economies
prices of 'hardware' and enabling software have been declining in recent years
expanded usage of robotics
Wealth inequality
General movement of income away from labour and towards capital will lead to growing wealth inequality
Middle skilled jobs
Developed economies
middle of the income distribution more in danger of being replaced by automation
Developing economies
tend to be more concentrated towards the top of the income distribution, jobs might escape automatisation for longer
low paid unskilled workers (especially non- routine jobs)
high paid jobs (high skilled) non routine, especially demanding tech-knowledge or creativity
investment in education as a solution
ILO (2016)
'techno-pessimism' has often failed to materialise focus on paper, is if the 4IR will be different
emphasise issue of technological-change has had negative consequences
already appears to be a trend of widening income inequality
Global trend- widening income inequality
widening skill disparities would make this worse
technological revolutions often lead first to net job destruction and only later do they seem to end up generating substantial increases in new forms of employment as GDP increases
4IR builds in the momentum of the 3IR
could thus generate an unprecedented exponential pace of productivity growth
job displacement of 4IR might be worse than previously assumed
there has been a new rapid wave of the automation of jobs and logistics, coordination and communication
the momentum of this technological revolution has been combined with the additional competitive pressures exerted by globalisation
definition of a 'job'
"a set of tasks and duties, preformed, or meant to be preformed by one person, including for an employer or in self employment"
but the tasks within a job could be complex
major matter of concern is how training and educational institutions will have to change significantly in order to adequately prepare people for new, complex and rapidly job tasks and skills
routine or non routine/// manual or cognitive
begins by replacing manual routine jobs
How will such institutions deal with the likelihood that workers will have to change jobs more frequently over the course of their careers?
Definitions
1st industrial revolution
18th and 19th centuries
change represented the transition from predominantly rural, agrarian societies to urban industrial societies
2nd industrial revolution
1870-1914
new industries began to develop oil, steel, and electricity
3rd industrial revolution
1980-now
digital technology, in many areas
computer, the internet, information and communication technology
4th industrial revolution
Building on the 3rd
robotics, AI, Quantum computing, biotechnology, 3d printing and autonomous vehicles
there is a continuing debate on the degree to which emerging and developing economies are already being affected, and will further be affected by the 4IR, eg. are such economies more or less susceptible to automation than developed economies
Are current emerging and developing economies going to have their economic development short circuited by the 4IR? In other words their prospects for expanding their manufacturing sectors in particular, could be limited. Is the service sector going to be an alternative source of technological change?
McKinsey (2017)
By 2030 375 million workers globally would likely need a transition to a new occupation
'lost jobs, jobs changed, jobs gained'
half of the work activities that people are doing could theoretically be automated
consumption
1 billion more to join a consumption class especially in examples like China
optimistic stance on 4IR
Critical factors for increasing the demand
technical feasability
the cost of both developing and deploying automation
the impact of labour market factors
regulatory and social factors
more jobs gains that losses
jobs will just inherently change
economic growth stimulated by automation will likely create a demand for additional work
he has a relatively compact definition of automation
three different projections 2016-2030- 1. slow change, 2. fast change, 3. mid-point
focus on midpoint
developed economies 20-27% work displacement by automation
emerging and developing economies displacement will be below 20%
importance of investment
Infrastructure and buildings (architects, engineers carpenters, etc etc.)
Transition to paying wages for personal services (cooking childcare and cleaning)
Invest in renewable energy like wind and solar power, increase in energy efficiency and mitigate climate change
Where will jobs decline?
some costumer service jobs
office support occupators
predictable settings (assembly line workers dishwashers, drivers, and equipment operators)
India
increased demand for all levels of education
wage level lower than china
labouring force set to grow by 30% (140 million workers) by 2030
thus has to generate substantial amount of jobs
dominated by services as opposed to manufacturing (which dominated China)
reshoring at a much more premature stage in India due to this
Informal sector represents a massive (80%) of the labour market
increase in middle wage jobs (retail, teachers and construction workers)
China
will have the largest number of displaced workers
100 million workers by 2030
ageing population
shortage of prime-age workers
wage level has exceeded those of significant economies
needs to enhance its comparative advantage through developing automation
Reshoring trend (Reshoring Initiative 2018)
much more vulnerable to this trend compared to India
most of the reshoring to the US came from China between 2010-2017
significant rise in consumption class
higher wages than in india on average
increase in middle wage jobs (retail, teachers and construction workers)
what jobs are projected to still grow significantly through 2030?
'creatives'
managers and supervisors
educators
professionals, such as engineers, scientists and accountants
professionals such as engineer, scientists and accountants
health care providers