With digitization and automation jobs will disappear, but we’ll continue to work anyway. That is what several experts I have been talking to believe. They also think that distribution of wealth in society could become the biggest challenge ahead.
None of the experts I have been talking to about jobs and the future is opposed to the picture that a large part of today’s jobs will be automated.
“Everyone understands that we are replacing people with robots in factories that are being automated. What is still not widely recognized is that this also applies to white collar jobs now — those jobs that absorbed much labor when we started the transition to manufacturing in factories, and also what made this transition relatively painless. The question is whether there is a third sector that can absorb those who are losing white collar jobs,” says Gunnar Karlsson, professor of telecom traffic systems at the Royal Institute of Technology in Stockholm, Sweden.
So the crucial question is whether new jobs will be created when old ones disappear. Many hope they will be created in innovative star-ups, but Swedish technology weekly Ny Teknik concluded last fall that 25 of Sweden’s most acclaimed start-up companies together had created 3,700 jobs, while 5,000 jobs had disappeared in five years, only in the Volvo Group.
Another hope, however, lies in increased demand for local services as a result of higher income for those who still have jobs, and according to a report by the Foundation for Strategic Research (Stiftelsen för strategisk forskning) this seems partly to be true (see below).
Anna Felländer, chief economist at Swedbank, also sees a trend moving in that direction, where the most important thing, according to her, will be to make it easier for innovative companies and for the self-employed.
“40 percent of the US workforce is self-employed and in five years it will be 50 percent. There is an individualization of the economy going on, and it happens quickly in Sweden,” she says.
Robin Teigland, a researcher at the Stockholm School of Economics, who has written a report on the new ‘sharing economy’ with Anna Felländer, believes that our revenues will come from many sources, and even from machines working for us.
“They can make money for you without you having to do anything except maintaining the machine or the resource,” she says.
Per Johansson, a former researcher in human ecology, and now part of the think tank Infontology, believes in a similar trend but he wants to make a difference between jobs and work. He says that jobs are functions in systems with roots in bureaucracies and military chains of command — tasks with some kind of mechanical character. Work is instead what we do in life — anything that requires effort.
“We need to shift focus towards other human urgencies and tasks — areas in which I think there will never be any shortage of work. It’s a kind of of change of fantasy we have to undergo,” he says.
How difficult it will be depends on how indoctrinated we are in the old beliefs, according to Johansson.
Roland Paulsen, PhD in sociology at Lund’s University, goes further.
“I see work as the biggest environmental problem we have. Nothing consumes so much of the Earth’s resources,” he says, referring to the objective of high employment rates, despite automation effects, which leads to unnecessary production and consumption.
No matter which picture of the future of jobs you choose, most believe that the distribution of wealth will be a major challenge. One reason is the risk of accumulation of profits to giant corporations with high automation rate. Another is the risk of very large income gaps. A third is that the self-employed may be exposed to fierce price pressure through global digitization.
“We will need to improve individuals’ negotiating position through regulation,” says Robin Teigland.
One solution being discussed is unconditional basic income — a kind of base salary to everyone, sufficient for covering basic costs in life, and replacing all other social programs in society. Many are skeptical, including former Swedish Prime Minister Fredrik Reinfeldt, even though he early on recognized the risk that jobs can be automated.
“I see it as a left wing alternative that has occurred in the debate (…) where we in fact establish a society where a large percentage of the population will never get any job because they will live on the citizen salary,” he says.
But proponents see great opportunities.
“It is important to focus on what a citizen salary would make possible if people did not have to worry about providing daily food and housing — a freedom from adapting to other people’s agendas, which the old way of governance and managing means, and then new businesses can emerge. In a best case scenario this leads to an adaptability which I think is key to solve these problems,” says Per Johansson.
Roland Paulsen notes that a citizen salary may have surprising effects.
“You would have to raise the salary of crappy jobs that no one wants to do if they don’t have to. An upside-down world where the least attractive jobs would become the best paid. But I still think that a basic income can lead to the development of new ethics and a new way of living together,” says Roland Paulsen.
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Machines are taking over the jobs
- The report “The Future of Employment” from Oxford University (2013), by Carl Benedikt Frey et al, states that 47 percent of the jobs in the United States are at high risk to be automated within a few decades. The report also claims that the entry of machines will occur in two waves. First low-wage jobs with low educational requirements will be hit, for example in transportation, logistics, production and administration. Then there will be a pause while technology is evolving to embrace also creative and social abilities, and at that point also well paid jobs with high educational requirements will be affected.
- In the report “Every second job will be automated within 20 years” from the Foundation for Strategic Research (Stiftelsen för strategisk forskning) — a Swedish adaptation of the Oxford report — the author argues that 53 percent of Swedish jobs run the same risk.
- Gartner expects that one in three jobs will be done by software, robots or smart machines 2025.
- Pew Research Center’s report “AI, Robotics, and the Future of Jobs” is based on answers from 1896 technology experts and analysts. 48 percent of them thought that technology will displace more jobs than it creates, while 52 percent believed the opposite.
- The report “New jobs in the automation era” from the Foundation for Strategic Research shows that 450 000 jobs were lost in Sweden through automation between 2006 and 2011. New jobs and increased demand for local services due to higher wages for those who still had their jobs, replaced three quarters of the lost jobs. Reforms in the labor market contributed to a total rise in employment.
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This can become Sweden’s role
What can be the role of Sweden for handling the transition when jobs are being automated?
Per Johansson: “We may be good at finding a new imaginative and realistic optimism. You have to observe all sorts of negative things and limitations clearly, but if you create a confidence in the future that is effective enough, then you have the antidote you need against destructive tendencies that strive back to the Middle Ages.”
Roland Paulsen: “To be a leading country. Economic globalization is not the only one, there is a political / ideological globalization too. That the Washington Post reported on the experiment in Gothenburg (six-hour work day), says something about when a country is at the forefront, it puts pressure on other countries. And Sweden has a long tradition of being a political frontrunner.”
Robin Teigland: “Sweden is at the forefront in sharing economy, in robotising of jobs, and in IT and Internet penetration. Many people look at us and see how we do. We can sell our services and our knowledge. All countries are facing this and people come to us. Sweden can also be a test market, where it is easier to push change than in the US for example.”
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A part of this report was first published in the Swedish magazine Digital Teknik.