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Are Jobs Coming or Going in the Digital Age?

Thought Leaders

The digital revolution is and will be changing the job market as well as how we look at wage labor. As more and more routine tasks become automatized, half of all jobs will be gone in 20 years., according to the Swedish Foundation for Strategic Research. What will the job market look like in the future? Will there be one? And what happens if we add a transition to circular economies to the picture?  I asked Mattias Goldmann, CEO at the think tank Fores to provide some of his thoughts.

For a long time, many jobs have been replaced by robots that carry out the same tasks with greater efficiency and precision, especially in industrial sectors. The difference today is that jobs in almost all sectors – including the services sector – are becoming automatized. New jobs are generated, but not at the same pace as old jobs disappear. Goldmann has spoken about how the new jobs in the digital age have either high or low qualification requirements, but that there are few jobs in between. This indicates a risk of growing salary gaps between those who gain from the new technologies and those who carry out simple low-tech service tasks.

Indeed, even though the smartest machines today still need to be surpervised by human staff, ”in the future they will become more multifaceted and be able to self-adjust to different needs,” says Goldmann. This means that the competition between people and machines is likely to increase even further.

The Club of Rome has made simulations of what a transition to a circular economy would mean in terms of job creation, and concluded that it will generate 100 000 new jobs in Sweden. There are more jobs in an economy based on repair, reuse, and renewables than in a linear, wear-and-tear economy. But according to Goldmann, job creation is not so much dependent on what we produce or how we produce it. Rather, the amount of people working is a matter of “salary formation, tax planning, education, and job market mobility,” among other things.  This means that also in a circular economy, jobs can become subject to rationalization. However, transitioning to an economy which is focused on renting, sharing, and recycling can change the nature of employment, for example with increased self-employment and people having several small income sources.

So, Can IoT be an enabler for a transition to a circular economy?

Goldmann’s point of view is that there is a great difference between resource-efficiency and being circular: “IoT helps us almost automatically in becoming more resource efficient, but only through a very active governance it helps us in becoming more circular.” The specifics of this governance we’ll save for another time.

For a long time, an argument in favor of automatization has been that it frees up time for people to work less and spend more time on family, leisure, and hobbies. Unfortunately, reality has shown that this has not been the result. Rather, some of us work a lot more than before whereas others are struggling to even break into the job market.

What are the alternatives then? Here is a little optimism along with some thought-provoking ideas. Jobs disappearing and tasks being carried out by machines do not have to be an entirely bad thing. Basic income is an intriguing (and somewhat controversial) concept where each citizen gets a regular “citizen salary” from the government, enough to cover expenses for basic needs. Supposedly, this would enable people to do what they really want to do in life, rather than working just to get bread on the table. The money for this basic income could, at least partly, be taken from the savings made from reduced government expenses on unemployment allowances and social security.

Is this ‘basic income’ a realistic idea? At least there might be, or might need to be, alternatives to wage labor. This might especially be true in an age of increased competition in the job market from machines that are becoming smarter and smarter. If you didn’t have to work to cover your basic needs, what would you spend your days doing? Let’s sit back and relax in our hammock while imagining what a jobless society would look like.