Syndicate content

Add new comment

The Future of Jobs and the Fourth Industrial Revolution: Business as Usual for Unusual Business

Jieun Choi's picture
The global economy is on the precipice of a Fourth Industrial Revolution – defined by evolving technological trends that have the potential to fundamentally change life for millions of people around the world. Increasingly, technology is connecting the digital world with the physical one, resulting in new innovations such as artificial intelligence and self-driving cars.
 
Smarter machines and devices bring many advantages, while new technologies make production and use of new inventions cheaper and easier than ever. But automation can also cost workers jobs. How can countries prepare for these changes and maximize the potential benefits?
 
Photo: Simone D. McCourtie

In recent years, labor-saving technology, together with globalization, has reduced jobs in manufacturing, particularly in advanced countries. Many studies predict major job losses due to automation. For instance, Fredy and Osborne predict that almost half of US workers would face risks of their job being automated by 2030.
 
Developing countries are not immune from this trend either. If automation takes over more of manufacturing in high-income countries, there will be less demand for such work in emerging markets. This is especially worrisome in the era of high unemployment, particularly for youth. The world economy will need to create some 600 million new jobs in the next 15 years—most of them in Asia and Sub-Saharan Africa (The World Development Report 2013). India and China alone will have about a half billion young people joining the workforce in the next 15 years, and 11 million young Africans are expected to join the labor market every year for the next decade.
 
The good news is that while new technology may cause the creative destruction of some jobs, it will also create many new jobs, some of which we can’t even imagine today. In the past, technology has ended up creating more jobs than it wipes out. For instance, computers have replaced jobs, such as those done by typists, but they have also increased the demand for computer-based work and created new jobs related to developing, operating, and programming computers. The extent of these opportunities could not have been predicted two or three decades ago. Since it is more difficult to anticipate what new jobs will be created by new technology, losses from jobs we know today tend to grab headlines.
 
The magnitude of the Fourth Industrial Revolution’s impact on jobs seems to be associated with a worker’s skill level, and what determines vulnerability to automation seems to be whether a task is routine. Some studies predict that lower-skilled jobs will be affected the most, while others predict middle-skill jobs will be most impacted. Most studies tend to agree that high-skilled workers would be least affected, which is a scenario that could result in rising inequality.
 
Based on a study of the labor force in 46 countries, McKinsey Global Institute concludes that almost half of work activities globally have the potential to be automated. Helping workers to acquire new skills is crucial.
 
Then, how do we prepare for it?
 
South Korea, the most innovative country in 2017 according to Bloomberg, is a rare example of a country where government-driven industrial promotion of technology-intensive sectors has been remarkably successful. The Fourth Industrial Revolution has been one of the most discussed topics among the candidates’ debates in recent presidential elections.
 
The newly elected President Moon Jae-in recently proposed a set of policies to help South Korea take full advantage of the Fourth Industrial Revolution. These policies focus on advancing technology that is both scalable and profitable. His proposals include:
 
  • Improving coordination and knowledge exchanges by creating a Fourth Industrial Revolution committee under the direct control of the president. This committee, supposedly consisted of the government, experts and business, and coordinated by the Ministry of Science, ICT and Future Planning, would spearhead policy-making on the Fourth Industrial Revolution technologies.
  • Setting up an organization that supports research and development (R&D) for small ventures with government startup assistance.
  • Establishing supporting infrastructure, such as a smart highway for autonomous vehicles, which could reduce the cost of production for new inventions.
 
Meanwhile, the South Korean government also emphasizes the development of skills. It plans to train and support 10,000 computer science teachers in elementary, middle, and high schools. The Ministry of Employment and Labor recently adopted a state-issued license program to cultivate professional human resources in the fast-developing fields of the Fourth Industrial Revolution.
 
South Korea’s proactive steps to support a smooth transition to an economy bolstered by new technologies, enable new inventions to be commercialized and scaled, and invest in skills are an excellent example for all economies grappling with the consequences – both positive and negative – of the Fourth Industrial Revolution. All of these actions, coincidentally, are very similar to the government’s previous policies to support the country’s rapid industrialization. Despite the socioeconomic change and despite its unique influences on our life, the way to prepare for automation seems to be to conduct business as usual.