Introduction
Technological advancements that took place over the past 50 years have been a major factor affecting employment worldwide; in particular they have been affecting middle-skilled workers (Financial Times [FT] in January 2018). These advancements have caused what is called digitalisation —“the diffusion of digital technologies into nearly every business and workplace” (Muro et al 2017). This means that certain roles require a higher level of digital skills to be fulfilled, in order to deliver the expected quality of work. This will have implications on employment rates, not only in high income countries like the US, but most prominently, in the developing world; due to the lack of digital literacy.
Why is digitalisation important? The structure of the economy as a whole is being transformed, and the balance of power is undergoing a big shift at the expense of traditional operations towards improving information management. Digital Technology’s role is central to this shift, in the ways of collection, storage, exchange, and use of information. In addition, its power stems from the fact that it builds workers and firms’ capabilities for adding value by improving the production process with regards to the managerial, organizational and analytic aspects, while lowering the value of, and need for, other traditional kinds of work (Muro et al 2017). With all the aforementioned change in trends, digitalisation plays an important role in cultivating employees’ skills to be aligned with new emerging roles at work.
The speed of change in today’s world makes it very difficult to anticipate what the future will look like with any degree of certainty. Thus, making sure that companies have the right people with the right skills set, to cope with the future, is very crucial to their success. The roles that will be automated, the new roles that will be needed to carry out new work procedures and implement the latest technologies, and the specific skills that employees should possess, are all issues that must be considered for planning for the skills that employees must have in the future (PwC 2015). Furthermore, these issues should be considered not only by organisations, but also by states that need to develop their education systems to accommodate for the future.
Theoretical Framework
Acemoglu and Autor (2010) define a task as “a unit of work activity that produces output (goods and services)”. While a skill, is the capability of an employee to accomplish different tasks. Skills may be either acquired through schooling or externally given to employees by other forms of investment. Employees apply their skills to execute certain tasks, and skills applied to tasks create, hopefully, the required output (a good or service). The difference between skills and tasks becomes important when employees having a specific skill can carry out multiple tasks and adjust the set of tasks that they do to respond to changes in technology and labor market circumstances. Acemoglu and Autor (2010) argue that an understanding of the impact of technology on employment, calls for a framework that includes such a change in the allocation of skills to tasks. Particularly, they recommend following Autor, Levy and Murnane (2003), that latest technological advancements have helped information and communication technologies (ICTs) to either directly carry out, or allow the offshoring of, a part of the core tasks formerly executed by middle-skilled workers.
Proposed by Acemoglu and Autor (2010), the task-based framework describes the production of a good as a combination of services of a variety of tasks. Skills can be classified into three levels, low, medium and high. An assumption is made in this framework, and that is, a form of comparative advantage takes place between workers –tasks are classified according to their complexity, and medium skilled workers produce more than low skilled workers, and less than highly skilled workers in more complicated tasks. Equilibrium allocation of skills to tasks is an important issue here. Certain tasks will be performed by low skilled workers, other tasks will be performed by high skilled workers, and intermediate tasks will be performed by medium skilled workers. The lowest range of tasks correspond to service jobs and other manual occupations that need physical flexibility but little training. These tasks are straightforward for the majority of workers, but require a degree of coordination that cannot be easily automated. The middle level corresponds to middle skilled production employees and administrators, accountants and sales people that perform well defined processes (such as calculating or monitoring) which are easily codified by software and executed by cheap equipment, thus, requiring new skills by employees to deal with sophisticated equipment. Finally, the highest level corresponds to problem solving tasks, abstract reasoning, creativity and innovation. These tasks are usually performed by professionals, managers and to some extent by technical occupations. The latter tasks require a set of skills that is hard to automate because they entail procedures and processes that are ambiguous in nature and poorly understood, thus they cannot be easily codified.
In addition, the proposed framework facilitates the modeling of the introduction of recent technological advancements that directly replace workers for the execution of certain tasks. The framework can easily model, in particular, how new machinery (for example, spelling correction and grammatical errors identification softwares) can substitute for jobs performed by employees. This type of change in employment structure gives a better view for explaining the implications of new technologies on labor market. It also affects, negatively, the salaries structure of the group that is being substituted by the new equipment.
The Digital Divide
The global digital divide is defined as “the strikingly differential extent to which rich and poor countries are enjoying the benefits of information technology” and as “the unequal distribution of computers, Internet connections, fax machines and so on between countries” (James 2003 cited in Fuchs and Horak 2008). According to Norris (2000), the global digital divide can be seen as a part of an economic divide as it relates to the variations in access to, and usage of, information and communication technologies between developed societies and developing ones. Developing societies are those having little economic capital compared to developing societies, thus, people there are much less likely to have access to ICTs, to develop the knowledge of how to use them, to make this usage beneficial, and to participate in establishing institutions. These poor countries are not only economically marginalized, but also lack the cultural skills and political power that are necessary for taking a role and participate in the information society.
The digital divide is not only about material access, it is also about developed skills and usage forms. Material access is essential, however, it is not the only prerequisite for developing skills and benefit from usage. As most African countries do not have basic social, educational, economic and technological resources, which causes a lack of material Internet access. Thus, it can be expected that this will also result in a lack of digital skills and useful internet usage (Fuchs and Horak 2008). To measure digital literacy, i.e., the ability to use ICT hardware and software in useful means, the United Nations use the UNDP education index, this is a combination of the “adult literacy rate and the combined primary, secondary and tertiary gross enrolment ratio with two third weight given to adult literacy and one third to the gross enrolment ratio” (United Nations 2005 cited in Fuchs and Horak 2008). However, no exact data measuring digital literacy directly is collected. A ‘‘Partnership on Measuring ICT for Development’’ has been designed by the OECD, the ITU, the UNESCO Institute for Statistics, the UNCTAD, the UN Regional Commissions (UNESCWA, UNECLAC, UNECA, UNESCAP), the UN ICT Task Force, and the World Bank. One of its objectives is to reach a common set of 42 core ICT indicators and to establish a global database on ICT indicators. One of the indicators concerns usage access, ‘‘HH10 Internet activities undertaken by individuals in the last 12 months’’ (Partnership on Measuring ICT for Development 2005). However, there is no global database available, yet, for this indicator. In addition, The UNESCO proposed 33 indicators for measuring ICT in education (UNESCO 2003), but data regarding these indicators is not collected either. Digital education, digital experience and the existence of online services and applications are important for developing digital capabilities and skills. If these technological fundamentals of digital practices are missing for most countries as in Africa, it can be expected that there is also a global divide regarding usage access and digital skills development (Fuchs and Horak 2008).
Consequences of the Digital Divide
Chen and Wellman (2004) argue that the spread of the Internet along with its associated digital divergence at the international level can be attributed to a variety of factors, such as, differences in technological, socioeconomic and linguistic influences. Up to date regulatory telecommunications policies, education and infrastructures are fundamental conditions for disadvantaged societies to join, and participate in, the age of information. Marginalized populations (usually living in developing countries), face a variety of obstacles that hinder their digital skills from being developed. These obstacles include: The dominance of English language content, high costs associated with digital infrastructure, the lack of technical support, the lack of appropriate content, and most importantly, the lack of early education. For example, while only about one half of the world who uses the Internet is considered native in English language, about 75 percent of websites are in English. Thus, the digital divide remains considerable between developed and developing worlds. The diffusion of Internet is not only a matter of computer and digital technology, but has a deep influence on social inequality and employment. As a consequence, people on the disadvantaged side of the digital divide are increasingly eliminated from digital knowledge-based societies and jobs.
With all the aforementioned factors in mind, a reconstruction of the divide can now be done in more sophisticated terms. Access to numerous forms of technology in different contexts, results in difference in levels of engagement and different consequences. While concerns related to inequalities of opportunities to use, and engage with, different forms of technologies are important, concerns regarding the different consequences and outcomes resulting either directly or indirectly from access to technology will help in understanding the impacts, for example, on employment (Selwyn 2004).
The outcomes of using, and engaging with, technologies are not uniform among all. For instance, some information is, by nature, specific and has some restrictions over the people who can have access to it, due to some conditions of education, and managerial skills to analyze and use it (Lyon 1996 cited in Selwyn 2004). Thus, the consequences of accessing data, resources and services via information and communication technologies are not the same for all users. Having said that, the impacts of engaging with technology can be understood through the effect on social equality, on both levels; individuals and communities, i.e. social inclusion, socioeconomic security, social cohesion and empowerment (Berman and Phillips 2001). Participating in society (inclusion) can be seen through the utilization of a variety of aspects (e.g. Berghman, 1995; Oppenheim, 1998; Walker, 1997 cited in Selwyn 2004). These can be classified into five major points:
- Political activities such as engaging in mutual attempts to develop or conserve the physical and social environment
- Production activities which refer to participating in an economically or socially important activities, such as paid jobs, education and establishing a family
- Social activities like interacting with family or friends and belonging to a cultural group or society
- Consumption activities, i.e., consuming a minimum normal level of the goods and services compared to the society
- Savings activities, for example, pensions, savings or property ownership
Thus, the consequences of ICTs can be seen through these aspects, which show how technology use allows individuals to contribute and be part of society, in other words, the extent to which ICTs improve our skills to perform certain roles in a community (Haddon 2000).
Implications on Employment
Manual work automation has been increasingly observed nowadays due to a multiple of factors, of which are, artificial intelligence (AI), enhanced computing power and robotics that do people’s jobs —human decision making and complex cognitive tasks— by executing algorithms, machine learning and other computational techniques. (Autor 2015 cited in Millington 2017). Jobs being automated will not only affect workers who are being substituted by machinery, but also, other workers who do not have the required modern skills by the new transformed jobs. Unless these workers acquire the needed skills, they will be a source for low-paid unskilled work in developing countries (Millington 2017).
For countries, educating the young is important but they will need also to make sure that existing workers will acquire skills – technical and ICT skills—for adapting to new technologies and tasks within the new digital environment or retrain the workforce so that it has high skills that cannot be easily automated (such as critical thinking, reasoning, problem solving, teamwork, creative thinking and interpersonal —soft— skills) and competencies over machines (World Bank 2016).
Asian countries have to continue to discover new ways to move up the value-added chain to have a competitive advantage, not only over other emerging markets, but also over other advanced economies that are being increasingly supplied with new technologies (Frey, Osborne et al. 2016 cited in Millington 2017). As the manufacturing industry has seen the largest wave of automation, workers moving from agriculture to higher-paying manufacturing jobs in the emerging economies in African and South American economies are less likely to reach the rapid growth seen by Asian countries (Frey, Osborne et al. 2016 cited in Millington 2017).
Alternatively, developing and emerging economies will need to search for new growth models if they cannot afford the costly upgrade of skills. Public policies’ responses are important for helping workers in acquiring the skills, particularly, the ones that technology complements, not those skills that are being replaced by technology, so as to prepare employees for the modern world of work (Santos 2016 cited in Millington 2017). New fields will emerge and new expertise will be needed, and employees need to develop their skills in accordance with new technologies and job requirements to be able to compete in a knowledge-based economy. Growth in services fields, robotic maintenance, asset management, remote diagnostics and analytics capabilities will compensate –due to the rise of the ‘Internet of Things’ (IoT)– for job losses (Frey, Osborne et al. 2016 cited in Millington 2017).
In addition, an important implication of technology on employment is the increase of job quality polarization phenomenon in the labor market. The technological change is argued to be skill-biased by several studies; when employers start implementing those changes, highly skilled employees will benefit on the expense of lower skilled ones (World Bank Group 2015). It is shown by research now that technological change is seen to increase the demand for highly skilled employees –employees which are creative and innovative (doing non-routine jobs) or have the skills required for handling the new jobs created by new technologies— thus, these employees cannot be replaced by technology (World Bank Group 2015).
However, jobs polarization in the labor market in low income countries has not been studied in depth yet. In countries such as China and India, It has been suggested that technologies might create jobs for the middle class, these jobs are created either on direct basis through the emergence of IT enabled services and digital jobs, or indirectly through formerly unconnected workers and companies that have the ability to use digital tools, for instance, the rise of SMEs in rural areas in China, however, those studies were based on subjective evidence. This means that there might be different experiences of countries (World Bank Group 2015).
Lastly, there would be a huge issue when individuals do not have access to the opportunities of new technology, specifically, in developing countries. As the digital divide increases, and as the supporting environment for efficient technological implementations become more challenging, the concerns are growing that catching up will be harder. Internet access varies across different countries, “between 1.1 billion and 2.8 billion individuals cannot get online via the mobile network because they do not live within sufficient mobile network coverage” (McKinsey & Company 2014 cited in World Bank Group 2015). Furthermore, the estimates show that there are almost 4.4 billion people off the Internet in the world, about three quarters of which are in twenty countries. This means that there is a divide in workers’ capabilities to access digital tools. Disconnected employees are unable to access the various online work platforms, e-payment systems, or even e-commerce tools that workers, and more importantly, corporations in well-connected countries, take for granted. This, in return, creates a risk that the consequences of previous digital divides might worsen (World Bank Group 2015).
The framework discussed above should help in understanding the implications of technological change. The anticipated outcome of it, is that technological changes are biased towards benefitting certain groups of workers –depending on their skills or on the tasks they perform– at the expense of others. Particularly, technology is said to be skill-biased if it is likely to complement, on one hand, the roles of skilled workers by increasing their output by implementing technology at work, and in return increase demand for skilled labor, while on the other hand, it has a marginal or no direct effect on low skilled employees (World Trade Report 2017). An example of skill-biased technical change would be information technologies, these technologies are used more frequently by skilled employees than by low skilled ones. Evidence shows that skill-biased technological change is present in developing countries. Using plant-level data for Chile, Pavcnik (2003 cited in World Trade Report 2017) shows evidence of capital-skill association. This could be caused by increase of demand for skilled employees within industry, though there might not be a clear causality. Fuentes and Gilchrist (2005 cited in World Trade Report 2017) extend their analysis so that it covers more years (1979-95) and also find evidence of a strong link between technology implementation at work and demand for skilled labor as indicated by patent usage and other technology indices.
Recommendations and Conclusion
Regulations and policy interventions will be necessary to support employees, whose jobs are changing; through requiring new and more sophisticated skills so they can fulfill their new tasks. In addition, systems reforms and expansion will be of vital importance for employees entering the labor market to ease the adaptation process and to upgrade & develop their skills (Gelb and Khan 2016 cited in Millington 2017). Dynamic labor market plans, including education, training and upskilling are essential to guarantee that job losses arising from increasingly employing technology at work and the globalization of supply chains are compensated by new employment prospects (International Labour Office 2015 cited in Millington 2017). Digitalization has now reached to the point that employees have to have a wide exposure to basic office applications to fulfill their tasks. Such exposure is more important than having specific IT skills, especially for emerging economies (Muro et al 2017).
High-tech sophisticated technology skills, such as code writing, are still important. However, when it comes to developing countries, a greater effect may come elsewhere: word processing and spreadsheets. In developing countries, mid-digital positions represent the base point of economic inclusion and serve as door-opener positions for higher roles —where employees with limited digital education can catch up with the majority. In addition, these basic digital skills are now becoming a minimum requirement for the most common middle skilled “good” jobs (Muro et al 2017).
To begin, the process of expanding the public’s understanding and awareness of the importance of digital skills needs a collaborative effort from governments, civic and businesses. Accomplishing this needs new partnerships and cooperation that will maximize broad digital outreach practices so as to raise the speed of up skilling.
Awareness campaigns are good place to start with. These campaigns have been providing some help to stimulate engagement in some fields and could surely help increase the number and diversity of people developing basic digital and computer skills. Governments, businesses and communities might need to establish powerful marketing campaigns which focus on the significance of basic computer and digital skills, these campaigns should target the underrepresented, youth, unprivileged groups, and those who influence them. These campaigns would not focus on promoting particular skills like coding, but, they would attempt to reach the public audience that will encourage people to learn new digital skills by conveying the message that these skills are necessary and will open new opportunities.
To conclude, digitalization is playing an important role in economic life –as it increases labor productivity– and employment, this requires a much more rigorous collaborative effort than has yet happened not only regarding increasing the talent pipeline for highly skilled workers in specific tech roles, but also to spread the entry level digital skills between everyone in emerging economies.
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