Does information technology create or destroy jobs? Or is this even the right question?

Does information technology create or destroy jobs? Or is this even the right question?

Summary: The 2000s decade was a time of accelerating technology, accompanied by stagnant employment growth. This is no coincidence, MIT researchers argue. But how much technology is going to waste anyway?

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TOPICS: CXO, IBM, IT Employment
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Is information technology destroying more jobs than it creates?  That’s long been the conventional wisdom, of course. Proponents of IT, on the other hand, point to the new types of opportunities created as a result of the march of technology — from programming to analytics to technicians.

However, two longtime proponents of IT as an opportunity creator — Erik Brynjolfsson and Andrew McAfee, both with MIT — have taken a darker view of IT’s impact on the economy.

In the latest edition of MIT Technology Review, David Talbot reviewed Brynjolfsson and McAfee’s new book: Race Against The Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy, and pulls out the observation that the digital economy may be favoring that 1% at the top of the pyramid while sapping opportunities at lower levels of the economy.

The first decade of the 2000s was a time of accelerating technology, accompanied by stagnant employment growth, the authors point out. Employment fell by 1% during the past decade, compared to 20% growth in the 1980s and 1990s. This is no coincidence, Brynjolfsson and McAfee say. For example, increasing automation has dramatically reduced the need for customer service workers across many industries, such as airline reservations or directory assistance, the authors point out. MacAfee also points out that “certain kinds of document examination once done by armies of lawyers—can now be done competently by scanning technologies and software.”

It’s not the labor-intensive or professional jobs that will be replaced by automation — top executives may see their roles increasingly automated as well. Just last week, SmartPlanet Editor-in-Chief Larry Dignan reported on Gartner analyst Nigel Rayner’s prediction that within a couple of decades, “many of the things executives do today will be automated.” Rayner observes that the only thing standing in the way of more automated executive decision-making is “business culture.” But, “effectively, most of what the CFO, CEO and managers do today will be done better by machines,” he says.

In addition, as Brynjolfsson and McAfee observe, “intelligent assistants and question-answer software—of which IBM’s Watson is one example—may accelerate the trend. (Talbot’s review and the book were written prior to Apple’s Siri introduction, so the implications of intelligent assistants in the palm of one’s hand were not explored.)

The rise of robotic automation is another trend, and in the book, Brynjolfsson observes that global electronics manufacturer Foxconn “plans to replace many of its factory workers in China with a million new robots.”

The employment numbers for this decade that Brynjolfsson and McAfee site are disturbing, and technology may be to blame, at least to a partial degree. But these official numbers but don’t take into account the emergence and evolution of entrepreneurial ventures. And technologies such as cloud computing and social networking are providing immense, low-cost resources for new business creation. Many of these new ventures are off the radar.

Most of this post was originally cross-posted at the SmartPlanet Business Brains site. In response, Paula Thornton, management consultant and tireless proponent of systems design, provided an interesting perspective, which may suggest that when it comes to jobs and IT, we may be asking the wrong question. Technology is often neutral in job-creation arguments, and if anything, a lot of it just gets wasted anyway.  As Paula explains:

"Its unfortunate that such brilliant people took such a narrow view of the topic. First IT is not equal to the successful automation of a company, nor is it the sole source of technology that would change the way a business operates -- just changing processes can do same. Second, IT, by my observations can do far more job harm simply in the money that it wastes, that could be better allocated for new roles. I've seen countless Fortune 500 companies waste more money on technologies that are never adequately leveraged for any variety of reasons -- thus being an absolute and total waste of money. In the enterprise realm, such technologies have costs in the hundreds of thousands of dollars and the implementations of same is 3-4 times that.... The problem isn't that we've got technology replacing people, it's that we're not designing technology to optimize the human potential."

Talbot also suggests an opposing point of view as well in his review: Nobel prize-winning economist Robert Solow, for one, says it has been the norm throughout the course of history for technology to throw people  out of work. But in the long run, employment keeps growing, and wages keep rising.

At the IBM Watson University Symposium at Harvard Business School and MIT Sloan School of Management, McAfee moderated a panel on the role of computers in 2020 (live-blogged by Paul Gillin), in which MIT’s Rodney Brooks made the observation that the rapid development of IT in North America is providing a competitive edge in the global economy:

“We think manufacturing is disappearing from the US, but in reality there is still $2 trillion in manufacturing in the US. What we’ve done is go after the high end. We have to find things to manufacture that the Chinese can’t. What this has led to is manufacturing jobs getting higher tech. If we can build robotic tools that help people, we can get incredible productivity. The PC didn’t get rid of office workers; it made them do things differently. We have to do that with robots. We can take jobs back from China but they won’t be the same jobs. That doesn’t mean people have to be engineers to work. Instead of a factory worker doing a repetitive task, he can supervise a team of robots doing repetitive tasks.”

More discussion on technology’s impact on jobs and job creation is available from IBM’s live-blogging coverage of the IBM Watson Challenge symposium. McAfee points out that technology now offers organizations robust analytic toolkits that enable greater insights and predictions on market trends.  As Irving Wladawsky-Berger, former IBM executive and MIT lecturer observed at the symposium: “Cloud computing and other technologies can help entrepreneurs get started and build companies and hire people. So a lot of small companies will spring up—not the high tech companies but companies that take advantage of technology.”

(Photo Credit: Wikimedia Commons.)

(Most of this post cross-posted at the SmartPlanet Business Brains site.)

Topics: CXO, IBM, IT Employment

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  • I worked for IBM for 25 years

    When I first started with them, I worked as a "Customer Engineer", installing and troubleshooting the largest mainframes they sold at that time. I had many occasions to work with the marketing reps, and the approach they used in selling anything to any customer was telling them that if they bought X number of their wonderful machines, they could lay off Y number of employees. It worked then, and doubtless still does now.
    thetwonkey
    • RE: Does information technology create or destroy jobs? Or is this even the right question?

      @thetwonkey Your comments about salesmen stating buy this and layoff x employees is right on. I remember hearing that more than once, rarely a true statement although we did reduce some staff, but always transferred existing staff. High turnover rates in beach town with most staff under 28-30 years old.
      rollguy
  • RE: Does information technology create or destroy jobs? Or is this even the right question?

    Considering how incompetent many top executives really are, I'm sure that enterprising engineers can make machines that can do better than the empty suits at running a company. Can you say "Leo Apotheker" three times?
    ssaha
  • RE: Does information technology create or destroy jobs? Or is this even the right question?

    This article reminds me the Venus Project from Jacque Fresco, we are focusing our talented scientists and engineers in the oil industry, gasoline car industry, finance industry but the future will be very different, we need to focus all our effort on building better electric vehicles, flying cars, inteligent buildings with renovable water, and energy automated systems, all of this needs very talented people out there, but first we need to get rid of the debt monetary system which makes the 1% of the world rich, and the rest of the people very poor. It's more a economic and political decision, because the talented people exist.
    Gabriel Hernandez
  • Post-job economy

    I think Kurt Vonnegut had it right in Player Piano all those years ago. Sooner or later we are going to have to transition to some type of economy where the majority of people no longer have jobs.

    Sure, historically technology has made us more efficient and new jobs and industries always sprang up to backfill the jobs the technology removed. But each tech advance gets us closer to the state where people, as a whole entity, are obsolete.

    The only reason we still have any use at all for unskilled labor is that people are still more dexterous in non-controlled environments and because machine vision isn't all that great. Those two will likely be solved at a to-manufacturing level inside 20 years.

    As far as knowledge work, Moore's law states that by 2050ish the average desktop equivalent system will be about 7 billion times faster than the human brain. With that kind of horsepower most knowledge work evaporates too.

    You end up with a comparative handful of high-level programmers having meaningful jobs and maybe some lawmakers and everything else becomes make-work.
    SlithyTove
    • Good Story

      @SlithyTove
      You should also read Jules Verne's "Paris in the 20th Century". A bleak book where automation replaces people and jobs become hard to find for even the best and most educated.
      sboverie
      • RE: Does information technology create or destroy jobs? Or is this even the right question?

        @sboverie@...

        Lost work of ancient sci-fi that is suprisingly relevant in the modern era? I'm in.

        Had never heard of that one.
        SlithyTove
    • RE: Does information technology create or destroy jobs? Or is this even the right question?

      I do not think that the question is one of unskilled versus skilled labor. Rather, I think the problem is the danger than new technology can deskill labor that used to be skilled. I have been most aware of this in a tendency for software to get dumber as software development tools get (apparently) more powerful.

      Meanwhile, skilled labor goes far beyond dexterity. I have the luxury of watching a multi-story building rise from the window of the room in which I write this. Yes, the machines engaged for this task have come a long way; but I find myself observing all sorts of sophisticated man-machine interaction as a result. The workers I observe from my window have no end of judgment skills, and I do not think that we can casually assume that such skills will eventually be assumed by a new generation of automation.
      kitchen-cynic
      • RE: Does information technology create or destroy jobs? Or is this even the right question?

        @kitchen-cynic

        I'm not sure you have really internalized what that kind of computing horsepower means.

        To try and put it in perspective, with the proper training program a 2050 desktop computer (assuming Moore's law runthrough) running an artificial neural network of roughly the same "size" as the human brain would be able to accept 140 man-years worth of training every second.
        SlithyTove
      • RE: Does information technology create or destroy jobs? Or is this even the right question?

        @kitchen-cynic But how many humans are on the job? Machines replace manpower. I've worked on large commercial jobs where in the past hundreds of workers would have been employed and we did the job with 12. In a small fraction of the time it used to take I may add too!<br><br>But in order to accomplish this force multiplication it is a combination of machinery, design, method, materials and planning. One of the popular things we like to say is if it wasn't for mistakes we'd never work. Eventually they'll get it right and no one will.
        paulfx1
  • IT

    The ironic thing about technology is that on one hand it can make things easier and on the other hand make things easy enough that an employee is not needed. Before business PCs became popular, managers would not type anything because that is what secretaries were for. With a business PC in the manager's hands he found that he could skip the dictation and write his own memos and letters and he discovered that typing was a fairly easy task and he saves money by not having a secretary.

    Another aspect of technology would be kitchen appliances. In the hands of an ambitious cook these tools make some tasks easier to do while helping the cook explore new techniques. In the hands of a bad cook, the microwave is good for heating up frozen food. So goes IT in the hands of a good manager or a bad one.
    sboverie
  • RE: Does information technology create or destroy jobs? Or is this even the right question?

    my classmate's mom makes $68/hour on the laptop. She has been laid off for 5 months but last month her check was $7564 just working on the laptop for a few hours. Read this site http://phlpn.es/pzhb44
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  • RE: Does information technology create or destroy jobs? Or is this even the right question?

    How many millions of jobs has IT created? Everyone who works on computers in manufacturing, distribution, sales, service, hardware, software, support, etc. Steve Jobs, Michael Dell, and Bill Gates alone are responsible for creating hundreds of thousands -not just the 250,000 that work for Dell, Microsoft, or Apple, but all the people whos work is generated by those three companies, and that's millions of people.
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  • RE: Does information technology create or destroy jobs? Or is this even the right question?

    IT by definition keeps the employee they are supposed to help at arm's length. What IT destroys is company productivity. Ever since IT was formed from the 5 groups, productivity has nose-dived...
    Tony Burzio
  • The solution to future technology is easy: no work and no jobs,

    and no executives and no leaders.

    Technology will serve everyone, equally, with no executives needed and no peons welcome.

    Whatever machines and computers and robots and other technology exists, will have to be personalized, for each person, taking into consideration all of the attributes, positive and negative, and serving each person to the point that nobody is left needing or wanting.

    That's the only way to prevent massive chaos and civil unrest in future civilizations.

    All future technology will be like servants of humanity, and not superseding or equaling humanity.
    adornoe
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    Still, taking most of these excursions at the beginning of the changing times also ensures that you are back relating to aboard just in time to have a leisurely lunch within the air-conditioned eatery. Which, by having a glass or possibly two or local Silk wine, (remarkably good), can cause a delightful feeling from well-being. I dont' know whether that's because of the having experienced the wonders of such an ancient civilisation or your wine, but you decide I are able to promise you should feel very relaxed. <br />
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    Afternoons are started cruising at a leisurely price down the actual might Riv Nile. By upper deck that is amply given comfortable sun's rays beds and recliners, a splash vacation pool and well-stocked bar, you should almost have fun with your afternoons even though your morning excursions. <br />
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    Throughout the seven days that we all cruised we tend to enjoyed 12 various excursions, (all portion of the price everyone paid), to some of the interesting places I have ever went to and, by making usage of our own "Egyptologist" we were able to get a real understanding of what life have to have been for instance in traditional Egypt. <br />
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    Each daytime we dined on the air-conditioned fine dining enjoying the actual service from the friendly and obliging staff members. The food we enjoyed was varied and excellent and if a customer didnt' prefer anything from extensive list the chefs present were always ready to create different things for them all. In fact I stubled onto many of the staff, simultaneously restaurant and additionally otherwise, to be really warm and friendly and helpful regardless what the time of day or nighttime. <br />
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    Following our dinner, on several evenings, there was first "traditional" Egyptian entertainment also known as Nubian dancers, Egyptian Belly-Dancers as well traditional artists. Plus, relating to the last still one evening, we all took part in an Egyptian outfit party. Everyone bought, just for pennies, some fabulous Egyptian robes and gowns along with everybody had a beautiful time. <br />
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    Our Earth Cruise was a beautiful experience. It was basically everything and better that we wanted. Exciting, varied, mysterious, eventful and additionally overall :fulfilling. <br />
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