unemployment through digitization? · markets (big four of the digital economy) "the winner...
TRANSCRIPT
![Page 1: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/1.jpg)
1
Dr. Max MustermannReferat Kommunikation & Marketing Verwaltung
Prof. Dr. Dr. h.c. Joachim MöllerChair of EconomicsUniversity of Regensburg and IAB, Nuremberg
Unemployment through
digitization?
![Page 2: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/2.jpg)
2
Profound changes through digitizationThreats or opportunities?
Disruption
3D-printing
![Page 3: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/3.jpg)
3
Digitalization in the public debateA worldwide hype in the media?
![Page 4: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/4.jpg)
4
The pessimistic scenario of technological
development in the German mediaAn example
» The experts are split into two camps. Some claim that the
tide is rapidly rising and 80 percent of the jobs are destroyed in
20 years. The others believe that this will happen only later.«
Der SpiegelDer Spiegel, 17.4.1979
![Page 5: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/5.jpg)
5
19642016
![Page 6: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/6.jpg)
6
Elimination of jobs on a broad front?Some empirical studies draw gloomy scenarios …
0 0,2 0,4 0,6 0,8 1
Frey, Osborne (USA) 2013
Pajarinen et al. (FIN) 2014
Bowles (D) 2014
IngDiBa (D) (2015)
Gefährdet Nicht-Gefährdetthreatened Non-threatened
![Page 7: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/7.jpg)
7
Are the threats exaggerated?Critical assessment of pessimistic scenarios …
Experts often overestimate the technical possibilities
(D.Autor 2014)
Technical potential is not equated with actual substitution of
human labor:
legal hurdles (e.g. for autonomous driving),
cultural preferences, reservations (robot service?)
Profitability Hurdles
Share of specific activities within the professions assumed to
be constant not realistic!
Professions do not disappear, they are adjusting!
![Page 8: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/8.jpg)
8
The work does not go out, but it is changingTechnological progress leads to new activities within professions
![Page 9: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/9.jpg)
9
The robots leave their cages...Cobots are directly interacting with workers …
Precision
Speed
Endurance
Force
Predictability
Low maintenance costs
Creativity
Emotions, empathy
Social intelligence
Ability to assess and make
decisions
Problem solving
competence
Intuition, flexibility...
![Page 10: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/10.jpg)
10
What kind of tasks can be replaced?Frey, Osborne (2013)
Technical developments (cobots, machine learning, KI), not
only displace simple standardized (routine) activities but also
more complex activities!
Less endangered, however:
Activities of hand-eye coordination
Creative-intelligent activities
Social-intelligent activities
Calculation of the substitutability of (current) activities in the
professions
![Page 11: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/11.jpg)
11
Substitutability on the basis of tasks/ activities Much lower values compared to F&O …
IAB_2013: 15% of
employees
Total in hatched
area:
IAB_2016: 25% of
employees
Source: Own presentation with data from Dengler, Matthes (2015, 2018)
0
5
10
15
20
25
10 20 30 40 50 60 70 80 90 100
Potential of substitution
D:IAB_2013 D:IAB_2016
Perc
enta
ge o
f em
plo
yees
![Page 12: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/12.jpg)
12
Change in required skills and
sectors of the economy
![Page 13: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/13.jpg)
13
Substitutability decreases with the requirement levelProportion of activities that can be replaced in principle today
Source: Dengler, Matthes (2018): IAB-Kurzbericht, 4/2018
Unskilled
Skilled
Specialists
Experts
![Page 14: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/14.jpg)
14
Disruptions and projected effect sizeSectors affected differently …
Long Fuse – Little Bang
Long Fuse-Big Bang Short Fuse – Big Bang
Short Fuse – Small bang
Timeline
Infl
uen
ce o
n t
he
bu
sin
ess m
od
el
![Page 15: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/15.jpg)
15
Technological unemployment
![Page 16: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/16.jpg)
16
» Those countries are suffering relatively which are not in the vanguard of
progress.«
Technological unemploymentThe famous definition of Keynes …
» We are being afflicted with a new disease of …–
namely, technological unemployment. This means
unemployment due to our discovery of means of
economising the use of labour outrunning the pace
at which we can find new uses for labour.«
John Maynard Keynes:
Economic Possibilities for our Grandchildren (1930), (my highlighting)
![Page 17: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/17.jpg)
17
Technical progress is Janus-headedEffects on employment ambivalent
What is the net effect on employment?
Technical progress/Process
innovations
Increase in labourproductivity, less
manpower needed
Lower prices and/or higher quality
More demand, higher market share, more manpower needed
1
2
![Page 18: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/18.jpg)
18
What effect of technical progress?Competition and price elasticity
Price
Elasticity of
demand
Competition Employ-
ment
effect
New Products/
Competitive markets
High High Positive
New Products/
Markets with low
competition
High Low (Positive)
Old Products Low High/ Low Negative
![Page 19: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/19.jpg)
19
Further important aspectsProduct Innovations, Reshoring
Technology creates new services and products (product
innovations) positive employment effects
Reshoring Does the surge in robots/digitalization harm theemerging countries?ally significant negative impact on worldwide employment. While it is small in developed
countries, for emerging economies it amounts to -14% between 2005 and 2014. Furthermore, we assesscross-country effects, finding that robots in developed countries decrease off-shoring just as employmentin
» Robots turn out to have a statistically significant negative impact on worldwide employment. While it is small in developedcountries, for emerging economies it amounts to -14% between 2005 and 2014 … Robots in developed countries decrease off-shoring just as employment in emerging economies.«
Carbonero, Ernst, Weber (2018), Robots worldwide: Ilo Working Paper # 36-.
![Page 20: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/20.jpg)
20
Digitization and distribution
![Page 21: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/21.jpg)
21
The distribution problemDigitization exacerbates inequality
Outstanding importance of cutting edge technology, extreme
scale yields
Markets (Big four of the digital economy)
"The winner takes it all"-structures
Segmentation of companies (polarized structure: "Lovely and
lousy jobs")
Selection of highly productive workers in good companies, less
productive in bad companies (card, Heining, Kline, QJE 2013)
![Page 22: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/22.jpg)
22
New social conflicts?Redistribution of property rights instead of redistribution of income
» As companies substitute machines and computers for human activity, workers need to own part of the capital stock thatsubstitutes for them to benefit from these new “robot” technologies. … Without ownership stakes, workers will become serfs working on behalf of the robots´ overlords.
Richard Freeman (2015), IZA Discussion Paper 2015
![Page 23: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/23.jpg)
23
Conclusions
![Page 24: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/24.jpg)
24
Conclusions
Significant drop in labor demand rather unlikely but
structural change
Professions will generally not disappear, but changing job
content Increased training efforts needed!
Adaptation requirements between qualifications,
professions, companies and countries or regions
Technological unemployment tends to be a second-order
problem
Distribution effects a first-order problem!
![Page 25: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/25.jpg)
25
Prof. Dr. Dr. h.c. Joachim MöllerInstitut für Arbeitsmarkt- und Berufsforschung
der Bundesagentur für Arbeit
http://www.iab.de
![Page 26: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/26.jpg)
26
A recent plan: robots producing robots …Only marketing or revolutionary production technique?
ABB to build the world’s most advanced robotics factory in
Shanghai
Milestone investment will combine connected digital
technologies, state-of-the-art collaborative robotics and
cutting-edge artificial intelligence research to create the most
sophisticated, automated and flexible Factory of the Future.
Source: https://new.abb.com/news/detail/9410/abb-to-build-the-worlds-most-advanced-robotics-factory-in-shanghai
![Page 27: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/27.jpg)
27
Robot stock (developed countries, excl. Japan)High dynamics in US, Korea, Germany
Source: Carbonero, Ernst, Weber (2018), Robots worldwide: The impact of automation on employment and trade, Ilo Working Paper # 36-
![Page 28: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/28.jpg)
28
Robot stock (emerging countries, excl. China)High dynamics in several countries
Source: Carbonero, Ernst, Weber (2018), Robots worldwide: The impact of automation on employment and trade, Ilo Working Paper # 36-
![Page 29: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/29.jpg)
29
Robots: Japan vs ChinaExponential growth in China
Source: Carbonero, Ernst, Weber (2018), Robots worldwide: The impact of automation on employment and trade, Ilo Working Paper # 36-
![Page 30: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/30.jpg)
30Source: Dauth et al., IAB-Discussion Paper 30/2017
The use of robots increasesGermany one of the leading countries...
Ro
bo
ts p
er 1
00
0 w
ork
ers
D EU USJahr
1995 2000 2005 2010 2015
![Page 31: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/31.jpg)
31
Higher unemployment through digitization?e.g. Korinek, Stiglitz (2017)
Assumption: digitization leads to more fluctuation between
companies/sectors/regions
higher separation rate higher unemployment in equilibrium
Assumption : digitization leads to devaluation of specific human
capital
Consequence in imperfect labor markets:
higher unemployment in equilibrium
Conclusion: tending to increase unemployment possible, but a
second order effect!
![Page 32: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/32.jpg)
32
Paradoxes in the ongoing debate
Paradox 1:
“Digitization makes millions of skilled workers redundant."
“Demography leads to an intensified shortage of skilled workers."
Paradox 2:
"Digitization leads to an enormous increase in productivity."
"The growth of productivity is exceptionally weak in long-term
comparison.“
Paradox 3:
“Digitalization leads to labor saving.”
“Some of the forerunners in digitalization are expanding their
workforce.”
How does this fit together?
![Page 33: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/33.jpg)
33
Technological unemployment through digitisationA counter position
» The idea that people would always have a
unique ability that is unattainable for non-
conscious algorithms is pure wishful
thinking.«
Yuval Noah Harari: Homo Deus, 2017,S.430f.
![Page 34: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/34.jpg)
34
The productivity puzzle
![Page 35: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/35.jpg)
35
Technology and productivityIs there a puzzle?
»You can see the computer age
everywhere but in the productivity
statistics.«
Robert Solow 1987
» ... measured productivity has
increased rather slowly in recent
years, even as the world seems to be
captured by AI (Artifical Intelligence)
fever.«
Anton Korinek ,Joseph E. Stiglitz (2017)
![Page 36: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/36.jpg)
36
Productivity growth per hourDecline and stabilization at low-level
-2
-1
0
1
2
3
4
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Own presentation with data of the Bundesbank; Growth rate vs prior-year quarter; 3-year moving
averages and polynomial trend.
![Page 37: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/37.jpg)
37
Artificial Intelligence as a new basic technologyApproaches to explaining the productivity puzzle
E. Brynjolfsson, D. Rock, C. Syverson (2017):
Basically four possible explanations for the productivity
puzzle:
Higher expectations
Measurement problems
Distribution effects (zero-sum games)
Implementation delays (J-Curve effect)
Favored: The J-curve effect: effects only after
complementary innovations and investments; these are
often incomprehensible (intangible); e.g. adjustments,
organizational changes, qualification in advance)
![Page 38: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/38.jpg)
38
Backup
![Page 39: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/39.jpg)
39
The digital revolution is progressing rapidly...Development areas
Cyber-physical systems offer radically new possibilities of
networking...
Mobile robots, cobots
Assistance systems, remote maintenance, 3D printing
Platforms, e-commerce
Artificial Intelligence, machine learning
Within companies "Internal digitization", smart factories
Between suppliers and customers "external digitization"
![Page 40: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/40.jpg)
40
Use of digital technologies by sectorInformation of firms in April/May 2016, percentage of shares
18,9
34,4
2,1
15,10
29,6
Services Zentraler BestandtteilunseresGeschäftsmodellsNutzen modernedigitale Technologien
Planen die Einführung
Setzen uns damitauseinander
Haben uns noch nichtdamit beschäftigt
6,90
29,70
2,7014,30
46,50
Production
Quelle: IAB-ZEW-Betriebsbefragung „Arbeitswelt 4.0“, IAB Kurzbericht 22/2016
![Page 41: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/41.jpg)
41
Gewinner und VerliererEntstehen neue Abhängigkeiten?
»Künftig gibt es zwei Kategorien von
Menschen: jene, die Computern sagen,
was sie tun sollen – und jene, die von
Computern gesagt bekommen,
was sie tun sollen..«
»Roboter, d.h. alle Arten der Maschinerie von
Computern bis hin zu künstlicher Intelligenz
… können zunehmend Arbeitskräfte
ersetzen, sogar die Hochqualifizierten, und
damit die Möglichkeiten für gute Arbeit und
Bezahlung verringern.«Richard Freeman (Harvard)
Marc Andreessen, (Netscape Communications)
![Page 42: Unemployment through digitization? · Markets (Big four of the digital economy) "The winner takes it all"-structures Segmentation of companies (polarized structure: "Lovely and lousy](https://reader034.vdocument.in/reader034/viewer/2022052003/6016b3ef8ae6e7172a0fc3b7/html5/thumbnails/42.jpg)
42
Die optimistische SichtKönnte technologischer Fortschritt sogar zu mehr Jobs führen?