The so-called Fourth revolution – the use of robotics, nanotechnology, the Internet of Things, biotechnology, artificial intelligence and 3-D printing – is already changing the labor force and all sectors of life. In an economy centered around people, this change will create bigger social inequality gaps and shape the way we live and work. How is new technology going to change the labor force?
The Fourth Industrial Revolution
A technological evolution can be very disruptive to the market labor. It happened during the First, Second and Third Industrial Revolutions. New jobs, roles or whole sectors will be created eventually. Some occupations will be partly altered or face complete elimination from the labor market. Other positions will be forced to fundamentally transform in order to survive in the work force. But what is definite is that these far-reaching technological and sociological changes will affect everybody.
Is this trend something new and threatening? Not really. According to the Information Technology and Innovation Foundation’s analysis of the history of technological advances from 1850 through 2010, technology has eliminated a lot of jobs. However, technology has also created new employment opportunities elsewhere, and the technological disruption witnessed in the past two centuries is now at an historic low.
According to report by Swiss Bank UBS, emerging markets, e.g. in Latin America or in India, will suffer more than developed economies because this will “reduce the competitive advantage of their cheap labor.” It will also broaden the gap between old and young workers, rich and poor, creating “greater income inequality imply(ing) larger gains for those at the top of the income, skills and wealth spectrums.”
Unfortunately, even during the Fourth Industrial Revolution (building on the Third digital revolution), the gender and wage gap between men and women will likely remain, according to the World Economic Forum report on the Industry Gender Gap. Women are still underrepresented in many sectors, such as technology or IT, especially on the top level positions. The report predicts that through the year 2020, the share of women in mid-level and senior roles will increase by 7-13%. But overall, for new emerging jobs in computer, technology or engineering, where the number of women entering the field is already lower than men, the gender inequality might persist in the future.
Technology is saving and killing jobs at the same time, with automatization a particular concern. On one hand, automation saves money for businesses. On the other hand, it will remove workers from the work force. In the UK, 35% and in the US 47% of workers are at risk being replaced by technology over the next 20 years. It might eventually threaten middle-skill professions, such as legal work, white-collar occupations, or customer service workers who can be replaced by artificial intelligence.
When you replace people with machines to make the process more efficient, businesses are able to lower their costs. The good news is that in many ways, innovations and technology create jobs indirectly by increasing productivity, raising wages and lowering prices. As a result, this increases spending and creates other jobs in the economy.
It is not only the technology evolution, but also demographic changes that affect the labor force. While looking at the future of the US Labor Force to 2060, the US Bureau of Labor Statistics predicts that about 98.1 million people will be added to the US resident population. The growth of the labor force will be slower when compared to the previous decades due to the aging of the baby boomers or lessening of the growth of immigration.
Overall, even though some trends are hard to predict, many jobs will be replaced by robots. New markets and industries will appear, and other job roles will be altered. Many businesses and markets will experience rapid growth of job opportunities, others will have to be closed. But robots will not replace humans anytime soon.