Would e-commmerce technology create jobs or destroy them?

As e-commerce becomes dominant, old jobs will be replaced and new ones to be created. Constant learning is the only way for workers to keep ahead of the technological changes.
Written by Charles Babcock, Contributor

Is the rapid implementation of e-commerce technology creating jobs - or destroying them? In the short run, e-commerce creates jobs because it's generating a new economy right alongside the still-humming old economy.

In the long run, however, there's little question that e-commerce will eliminate brick-and-mortar jobs, with the travel agent being only the first of a long list of endangered species. This doesn't necessarily mean there are new bread lines forming a short distance down the road. On the contrary, economists are convinced the Internet will create more jobs than it destroys. But will this process of creative destruction be shared equally? Probably not.

Some people who lose out in the old economy will be able to migrate into the new one, but not every warehouse worker is going to become an HTML programmer, and not every HTML programmer, for that matter, is going to have the right stuff to become an e-commerce Webmaster.

"Anything that promotes efficiency displaces a job someplace," says Ted Gibson, chief economist at the California Department of Finance, which does budget projections for the state.

Another California economist sees a relationship between the gains in efficiency in e-commerce and the lack of inflationary pressures. "Everyone is a little worried that, with the next round of productivity increases, they will be released. That's why, even with 4 percent unemployment, you don't see any upward pressure on wages," says Rajeev Dhawan, author of the University of California at Los Angeles' Anderson School of Management's quarterly economic forecasts.

And what are these new efficiencies? Mainly, they are software talking to software over the Internet, as opposed to people trying repeatedly to make a physical connection by phone, fax or, heaven forbid, U.S. Postal Service with the correct party on the other end.

Many people will see the changes coming and will seek a new role. Experts discount any government assistance to ease the transition. "The record of government retraining programs has been pretty dismal," says Hal Varian, dean of the School of Information Management at the University of California at Berkeley.

"I have never been impressed with the government's ability to see the next wave," Gibson adds. The best it can do is ensure that language skills and computer literacy are widely distributed throughout the society, and let existing industry-education partnerships take over from there.

Stephen Levy, director at the Center for Continuing Study of the California Economy, says Intel's relationship with Mission College in Santa Clara is an example of a relationship that works. Intel describes the types of skills that it anticipates needing, and the college updates its curriculum and hires instructors to address them, he notes.

But retraining may not be a one-time thing. In effect, the pace of change is making skills outmoded at an accelerating rate. California, which had 381,000 aerospace engineering jobs in 1986, now has 145,000, due to cutbacks in the defense budget and changes in the engineer skills needed. The average period for an aerospace engineer's skills to remain up to date is now only seven years, according to Dhawan.

Something similar will be true for those in Web site software and hardware engineering, he says, but the time period will be even shorter - two-to-five years - before their skills are outmoded. "We're now in a constant learning situation," Levy says. "No one can stand still."

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