Digital Technology & The Division of Labour: We Have a Problem.
A long held myth in Western nations and some Asian, is that digital technologies like Artificial Intelligence and robots will take away jobs. This fear of massive job loss as it relates to technology has been around for well over a century. Technology does eliminate jobs. It does not eliminate work.
Countries like Taiwan, Japan and South Korea are technology and industrial powerhouses today. They weren’t always so. Not many countries in Africa are, but they may well soon be and in fact, it may be critical to the global economy that they become so. What’s going on?
The basic issue? Digital technologies are creating a larger division of labour than any previous analog human technologies. Software, Artificial Intelligence (AI), genetic modifications, robotics. Technology has always created a bigger division of labour. Always.
Sociologist Durkheim predicted over one hundred years ago that as technology advanced, it would create an even greater division of labour. That is, jobs. Another sociologist, Lenski, reiterated this in the 21st century. Both have proven to be right. More so than economists.
And when it comes to digital technologies, as we advance them, this may actually become a problem. There may well be more jobs than can be filled. While it may seem counterintuitive or perhaps overly optimistic and feeding into the narrative of techno utopians and big industry, it’s very much grounded in reality.
We are already seeing a significant population decline in Western nations, known as WEIRD countries (Western, Educated, Industrialized, Rich and Democratic.) Even China is suffering from a population decline. Not long from now, there will be more people over 65 and not working. Africa however, now has and will for the next few decades, the youngest population.
While many jobs will be lost, more will be created. Part of the challenge will be building the internet physical infrastructure in Africa, India and countries that are still developing. Satellite internet service will help. The other requirement will be education and access to devices. Many African nations are already investing heavily in technology training for youth, from basic coding to more sophisticated skills. Nigeria, South Africa, Kenya, Ghana are leading the way. Some African nations may leapfrog the current model of low-cost labour manufacturing such as Taiwan, South Korea and Singapore did. Some may chose a meritocracy model, emphasizing education.
WEIRD nations and advanced countries like Taiwan and Japan will likely remain technology powerhouses, leading technological innovation, but African nations that invest heavily in education could quickly catch up. Geopolitics will play a role in technology transfers and skills development as well. We are seeing the world divide along lines of values; autocracy versus democracy. This impacts foreign direct investments and laws around technology transfer and education. In the short term, it could be a bit messy in Africa. Latin America could play a similar role as well, with nations like Brazil and Argentina leading the way there.
But it is the trend of population decline and an aging population that will impact these shifts the most. Already it is estimated that in the USA alone there are over 1 million technology jobs unfilled. And while there have been layoffs in the tech sector, these are largely in the U.S. and are by Tech Giants who are cutting in certain areas. There’s also the rise in jobs that are not necessarily coding and engineering type jobs, but knowledge jobs in HR, customer service and support, sales and marketing.
So the real problem isn’t the loss of jobs due to digital technologies, it’s going to be finding and educating enough people to fill them. Other, more traditional sectors are facing similar dilemmas, from nurses and doctors through to farmers and skilled trades like welders and electricians.
As I noted in a recent post, the Great Resignation is for workers, more like the Great Exploration. While threats of a recession loom, that may not happen. The markets prey on doom and gloom. The world is in much better shape than it seems and the fact this Great Exploration is happening is due to the massive amounts of wealth that a digital economy has enabled. These factors all come together to create a perfect storm. The division of labour is accelerating and that may be a bigger challenge than a deceleration.