Focus on Digital disruption - jobs



A recent report of a joint project undertaken by the CSIRO and TAFE Queensland, suggests that ‘as digital technology becomes increasingly ubiquitous, business models and employment models are being disrupted and machines are developing the capability to perform ever more complex tasks’. As a result, workers will need to learn and re-skill in an ongoing fashion to keep up with existing and new job requirements emerging from continuous technological change. This in turn has implications for the education and training sector in terms of its readiness and adaptability to meet the needs of workers transitioning into a digital economy.

This two-part Focus on topic features the impact on employment and skills of the phenomenon often described as ‘digital disruption’. This part considers the effects on jobs and employment while the other looks at the implications for skills and training. Users may also like to visit the Technology Pod, part of the VOCEDplus Pod Network.

What is the research saying?

Technology and digitalisation are bringing significant change to the world of work. Researchers, futurists and the media foretell of a future where robots and computers take-over the labour market and employment as we know it today is forever changed. There is no doubt that ‘disruptive technology’ has the power to devastate entire industries and upend various sectors of the job market. There is, however, no consensus on how many jobs will be created or lost due to technological advances. There is an element of fear in the debate: Will there be a jobless future as robots replace people? Will there be a future of mass unemployment and significant job polarisation? Or will it instead be a future full of new and interesting highly paid jobs for people with the right skills and knowledge?

The issues

There is debate over how quickly the new world of work will emerge. Is it already here or will it take decades for the changes to happen?

The report ASEAN in transformation: how technology is changing jobs and enterprises (Chang, Rynhart and Huynh, 2016) states that 'new and advanced developments in technology are transpiring at an increasingly rapid rate'. The authors can see evidence in the 10 Association of Southeast Asian Nations (ASEAN) countries studied that technologies are already increasing productivity, rendering some occupations obsolete and creating new ones.

In the Organisation for Economic Co-operation and Development (OECD) May 2016 policy brief on the future of work, Automation and independent work in a digital economy, digitalisation is seen as 'a key influence on the future of work over the next decades'. This theoretically gives industry, employers and employees time to adjust and ease into the technology enhanced future.

Public predictions for the future of workforce automation (2016) presents the results of a survey of the American general public. A majority of Americans predict that within 50 years, robots and computers will do much of the work currently done by humans, but few workers expect their own jobs or professions to experience substantial impacts.

Regardless of the timeframe, there is agreement that significant change is coming.

In the working paper Digitalisation of the economy and its impact on labour markets (Degryse, 2016), the author breaks the wide-range of impacts on the labour market in the new world of work in the ‘fourth industrial revolution’ down to four impacts: Job creation; Job change; Job destruction; and Job shift. Job creation (the creation of new sectors, products and services) will be a positive for humans. Experts see excellent although unknown possibilities opening up in the future. Job change is more contentious. Routine tasks replaced by technology will impact on what employees do on a daily basis in their job but could the new form of worker and machine interaction or new forms of jobs actually make them better and more fulfilling jobs? Job destruction for those jobs at risk of computerisation, automation and robotisation may mean that a very high number of jobs will be lost. Job shift may see the creation of digital platforms and crowdworking.

The potential extent of job losses is of great concern. Depending on the forecasting technique or research method used the predicted losses may be extreme.

In the report The risk of automation for jobs in OECD countries: a comparative analysis (2016) OECD researchers estimate the automatibility of jobs for 21 OECD countries based on a task-based approach. In contrast to other studies, they took into account the heterogeneity of workers' tasks within occupations. They determined that on average across the 21 OECD countries, nine per cent of jobs are automatable. The threat from technological advances thus seems much less pronounced compared to the occupation-based approach. There are of course differences between OECD countries which may reflect general differences in workplace organisation, differences in previous investments into automation technologies, and differences in the education of workers across countries. The main conclusion from this report is that automation and digitalisation are unlikely to destroy large numbers of jobs. However, low qualified workers are likely to bear the brunt of the adjustment costs as the automatibility of their jobs is higher compared to highly qualified workers.

The report Technology and people: the great job-creating machine (2015) highlights that in the UK over the last 144 years technology has created more jobs than it has destroyed. Historical evidence demonstrates that when a machine replaces a human the result, paradoxically, is faster growth and, in time, rising employment. Based on experiences of the past there is cause to be optimistic that similar employment trends will occur in the new world of work.

The impact of job change is forecast to be extensive. For example, analysis by PricewaterhouseCoopers Australia (PwC) in A smart move: future-proofing Australia's workforce by growing skills in science, technology, engineering and maths (STEM) (2015) shows that 44 per cent (5.1 million) of current Australian jobs are at high risk of being affected by computerisation and technology over the next 20 years.

In Automation and independent work in a digital economy the researchers found that 'the risk of job loss because of automation is less substantial than sometimes claimed but many jobs will see radical change'. Their data analysis revealed the percentages of workers at high risk of automation (where at least 70 per cent of tasks are automatable) and the larger share of jobs with a low risk of complete automation (but where between 50 and 70 per cent of tasks were automatable).

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Published: July 2016