Page 38 - The Fourth Industrial Revolution

increases and leads to the creation of new occupations, businesses and even

industries.

As human beings, we have an amazing ability for adaptation and ingenuity.
But the key here is the timing and extent to which the capitalization effect
supersedes the destruction effect, and how quickly the substitution will take.

There are roughly two opposing camps when it comes to the impact of
emerging technologies on the labour market: those who believe in a happy
ending – in which workers displaced by technology will find new jobs, and

where technology will unleash a new era of prosperity; and those who
believe it will lead to a progressive social and political Armageddon by
creating technological unemployment on a massive scale. History shows that
the outcome is likely to be somewhere in the middle. The question is: What

should we do to foster more positive outcomes and help those caught in the
transition?

It has always been the case that technological innovation destroys some
jobs, which it replaces in turn with new ones in a different activity and
possibly in another place. Take agriculture as an example. In the US, people
working on the land consisted of 90% of the workforce at the beginning of

the 19th century, but today, this accounts for less than 2%. This dramatic
downsizing took place relatively smoothly, with minimal social disruption
or endemic unemployment.

The app economy provides an example of a new job ecosystem. It only
began in 2008 when Steve Jobs, the founder of Apple, let outside

developers create applications for the iPhone. By mid-2015, the global app
economy was expected to generate over $100 billion in revenues,
surpassing the film industry, which has been in existence for over a century.

The techno-optimists ask: If we extrapolate from the past, why should it be
different this time? They acknowledge that technology can be disruptive but
claim that it always ends up improving productivity and increasing wealth,

leading in turn to greater demand for goods and services and new types of
jobs to satisfy it. The substance of the argument goes as follows: Human
needs and desires are infinite so the process of supplying them should also
be infinite. Barring the normal recessions and occasional depressions, there

will always be work for everybody.

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