The future of work

How anxious should people be for their jobs as technology advances? Will new, intelligent machines take the place of human labour?

WORDS By: CAROLINA GONZALEZ-VELOSA
Labour Markets Specialist, InterAmerican Development Bank
Published in CONTACT Magazine


 

One of the most popular searches on Google these days is “the future of work”. Academics, policy-makers and pundits are dedicating lots of resources to analysing the way in which technological advances are unleashing new capabilities, and may transform the very nature of work. Anxiety about massive job loss due to technological substitution is, in many cases, driving this agenda.

It’s not the first time that technological job loss has generated concern. At the beginning of the 19th century, with the wide spread of new industrial machines, members of an English radical movement, the Luddites, destroyed weaving machinery that threatened to replace human labour.

But as it turned out, neither the introduction of textile machinery at that time, nor the mechanisation of agricultural labour in the early 20th century, led to massive unemployment. History is clear: the world has faced significant economic transformations in the past, and labour markets have navigated them successfully.

How is that possible?

 

The case of the ATM

Technology does not necessarily reduce the number of jobs. In fact, it can create new ones.

The introduction of automated teller machines (ATMs) in the labour market, for instance, did not result in widespread job losses. On the contrary: since then the number of human bank tellers in the US has doubled. As expected, ATMs took over many of the tasks that human tellers used to do. But gains in productivity were so high that banks opened new branches and more jobs were created. In these new jobs, tellers had less to do with routine, cash-handling tasks, and had to invest more time in cognitively and socially demanding jobs, such as personalised problem solving and finding new clients.

In this case, technological transformation didn’t reduce the amount of work people do; instead, it transformed the nature of that work.

Will it be different this time?

There are fears that the new wave of technological change (artificial intelligence, robotics and machine learning) may have a major impact in terms of job loss. Some numbers are scary: according to McKinsey & Company, half of today’s occupations may disappear due to automation in both the developing and developed world.

But more recent estimates with a finer break-down by tasks and activities suggest that this risk may actually be much lower than feared, amounting to less than 10% in EBRD (European Bank for Reconstruction and Development) and developed countries[1].

 

Trends in Trinidad and Tobago

There is not much consensus regarding the magnitude of these risks in Trinidad and Tobago. Despite this uncertainty, we can identify three trends that will intensify for sure, and will shape the challenges that lie ahead in the labour market.

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First, globalisation will maintain its unstoppable pace, linking markets, cultures and people around the world. It may even be intensified by technological progress. As a small, open economy, Trinidad and Tobago will have to invest in the talent of its workforce, ensuring that workers have the right skills to be competitive internationally. Competition will be fierce, but the opportunities will be enormous.

Second, aging will intensify, and this process will be quite rapid. By 2050, almost 30% of the population in Trinidad and Tobago will be over 60, and 15% will be over 80. This will lead to growing pressure on social security systems, especially health and pensions. Workers will probably need to retire later, meaning they will have to update their skills to stay relevant for longer as technology evolves. Lifelong learning and adult education will have to become a norm.

And finally, as discussed earlier, while technological progress may not reduce the number of jobs, it will very likely transform their nature. Demand for skills in which machines have a comparative advantage, such as routine, predictable work, will decrease. And skills in which humans have the comparative advantage will have a greater economic value. Effective communication, creativity, and problem-solving will become more relevant as technology facilitates basic tasks and automation gathers pace.

 

Being prepared

The future of work is uncertain. But countries like Trinidad and Tobago have the chance to shape their future by being ready for whatever may happen. They can take advantage of all the opportunities that technological progress provides, investing in the talent of their people and mitigating the risks for those workers who may suffer.

This means having a stronger education and TVET [technical/vocational education and training] system, in which soft skills are part of the equation. Workers can then be trained and retrained to remain globally competitive, with the private sector as a partner.

This also means building strong and well-designed labour market policies, such as employment services, that help job seekers and adult workers in their employment trajectories and mitigate risks for those who are more vulnerable.

And finally, it means adjusting the health and pensions system to the demands of an aging society, so that future generations do not pay most of the bills.

Nothing prevents Trinidad and Tobago from rising to these challenges. It can be done.

 

[1]         AfDB, ADB, EBRD, IDB (African Development Bank Group, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank). 2018. The Future of Work: Regional Perspectives. Washington, DC

 

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