Posted by Estefania Murray
Tomorrow’s world of work: meeting the tech challenge
Posted by Estefania Murray
As I type into my laptop, armed with all the resources that high-speed internet puts at my fingertips, I wonder if soon I could be replaced by an AI algorithm, analysing the same information and crafting an insightful and grammatically flawless blog. This may happen sometime, but until then, this humanly-authored note will have to do.
What changes will technology bring to the world of work? How can workers and businesses adapt? What risks does this bring? How will the law keep up? These are all questions recently addressed by key actors such as the World Bank, in its recent The changing nature of work report, and by other development institutions and international observers.
It seems certain that as technology advances, more tasks will become increasingly automated – from data collection to decision making. While this prospect sounds daunting, some analysts argue that the threat from technology – dubbed the fourth industrial revolution – is being exaggerated. Technology, they argue, will also boost productivity which in turn will bring higher incomes, more spending and more employment, and create new types of jobs.
However, there is also the danger that technological advances could bring a widening skills gap and deepening inequality. How we deal with the tech challenge will determine the economic and social outcomes. This is not just an issue for the future – some changes in technology have already made their impact in the labour market.
Not always a day away: the gig economy and extended value supply chains
Smartphones and high-speed internet have massively increased the use of online platforms used to engage with a large pool of mostly independent workers who are willing to provide services for a short period of time and usually with little notice. This form of working is usually referred to as the gig economy. But this is no new phenomenon – the hiring of casual workers has been common in some sectors for many years. What is new is the large amount of online based platforms that have popped up to connect customers and workers, and the range of services and sectors affected.
Work in the gig economy usually involves three players: the customer, the worker, and the online platform that connects the two. And the work involved can usually be categorised into two forms: work that can be contracted and provided entirely online – sometimes referred to as online outsourcing – and work that is allocated online, via apps but delivered in real life. The range of services may also vary, from skilled tasks, like design (delivered online) or plumbing (delivered locally), to more basic tasks like data entry (delivered online) or deliveries (provided locally).
The gig economy has opened up demand for services and supply of labour that may never had been connected before – linking people in remote and rural areas, allowing women perform tasks that their traditional familial and societal roles would not allow before, enabling people to work flexibly at times that suit them, and engaging persons with disabilities who no longer have to wait for an accessible transportation system in order to secure decent employment.
However, there are concerns about the nature of the employment relationship, if any, created between the platform and the worker. Flexibility is one key characteristic of this type of work, with workers being able to switch the service on and off, and in this respect, able to control their own hours and wages. However, they can also be seen as ‘controlled’ by some platforms that allocate work, determine fee levels and regulate quality.
These distinctions matter. Depending on national legislation and jurisdictional tests, workers may or may not be considered to be ‘employees’ of the platform, which could in turn determine their ability to access employment rights such as unemployment insurance or workers’ compensation for injuries, overtime pay, minimum wages, paid leave, health insurance and pension coverage, safety and health precautions, and anti-harassment policies.
As well as lack of access to employment rights, the casual nature of employment can bring problems of low wages, long hours, insecure employment, lack of training, heightened safety and health risks, discrimination and lack of collective bargaining power. Businesses opting to deliver services through the gig economy will need to take these considerations into account. Some companies have decided to grant workers various forms of employment status. Others have disputed claims of employer-employee relationship with different results in jurisdictions across the world. And others are working towards providing some benefits to workers no matter what their status.
It seems likely that governments will have to consider legislation that strikes a balance between security and flexibility, with better ways of defining who is considered an employee, and mechanisms for better protecting the casual workforce, perhaps considering suggestions like portable pension schemes, a wider social security net, or reemployment assistance for temporary workers.
Women in the changing world of work
Technology may bring the flexibility which would allow women to perform family responsibilities and also have access to wages. Also, the ability to engage with other communities that may not have the same cultural barriers to women’s employment, may make working a real possibility. Automation may also lead to women securing more jobs. Education will be key in adapting to these new technologies, and women are currently outperforming men in reaching educational goals. Women will also be more readily available to provide the soft skills needed in the new world of work.
However, certain gaps will need to be addressed. For example, gaps in mathematics and ICT between men and women must be closed. Poverty is also higher amongst women, and thus access to technology lower. Governments can help by promoting women’s engagement in STEM fields and providing for better access to technology across demographics.
Automation: investing in human capital
History shows us that workers tend to adapt to the introduction of new technologies but, the pace at which new technologies are currently evolving may mean that they need some help. For businesses, re-skilling workers will be essential – both regarding new technologies, as well as training in ‘human’ skills that machines find hard to replicate, like critical thinking, problem solving, negotiation, the ability to personally engage with others, emotional intelligence and adaptability.
Indeed, there is a risk that that as companies outsource more of their work those who will be in most need of reskilling, like workers performing repetitive tasks, will receive the least support. Business will need to acknowledge that investing in human capital creates a virtuous cycle. Training workers enables them to adopt technology faster, and readies them to engage in the opportunities that even newer technology brings. Advances in technology may also help in reducing the costs of training, and even help detect what skills are needed in the market and monitor results.
Despite the challenges that technology brings, it also creates opportunities for emerging and developing countries such as shifting employment opportunities from low yielding sectors, like agriculture, to higher productivity ones, or increasing productivity across all sectors and providing access to the world market. But emerging economies will have to start training their future labour force now to secure their place in the world economy. Differences, such as limited access to broadband and the initial skills of the workforce, may mean that developing countries will be late in adopting the changes brought by the fourth industrial revolution. This is why it is important for them to get a head start. Governments can invest in providing access to broadband and technology, and invest in early childhood development of those skills that will be most needed in the future: adaptability to IT and soft skills. As technology progresses, the returns from education will rise.
No matter whether change comes at a slow pace or rushes into our lives, technological advances will bring opportunities and challenges to the world of work. Businesses and governments alike will have to be ready for them. Publicly-funded early education, and businesses taking the lead on training and re-training, may be a partnership worth exploring to ensure workers are ready to take advantage of technological advances most productively.
Uncertainty regarding the legal status of new forms of work, and the risks in practice that these forms of work carry are also key issues. Rethinking how to address these risks and to seize opportunities is a task that will require human ingenuity and cannot be outsourced to machines.