Deloitte Says Tech is “The Great Job Creating Machine”

Mila-Blog-Technology-Creating-Jobs

Is technology creating or destroying jobs?

It’s a question that’s been asked since the Industrial Revolution, and one that’s gained more credence as the pace of technology has disrupted — or threatens to disrupt — an increasingly larger swath of professions.

Driverless technology could do away with taxi and lorry (truck) drivers, while artificial intelligence and its ability to crunch through large amounts of data may one day make financial advisers and analysts obsolete. The rise of the on-demand economy has often been blamed for exploiting workers, and for turning what were once stable, salaried jobs into a series of benefit-less “gigs.”

But according to Deloitte, if the future is anything like the past 140 years, there’s much more reason to be optimistic about tech creating jobs, rather than destroying them. Indeed, after examining employment data in England and Wales stretching back to 1871 Deloitte economists hail technology as “the great job creating machine.”

Of course, there’s no doubt that technology has done away with jobs. Much of this has been in “human muscle power” jobs – where tech replaces labor and increases productivity. Farm workers and factory workers are the most obvious example. On the positive side, as labor-intensive and routine jobs have fallen away, “caring” and service jobs have risen. So while there has been a 57% drop in typists, there’s been a 580% increase in teaching and educational support assistants.

Technology has also directly created jobs in new sectors. In the UK, two of the top ten fastest growing jobs in the last 35 years, IT managers and programmers, have been in the tech sector. But with increased digitization, jobs are also affected. In 1971, the role of telephone operator reached an all time high, before automated switchboards made them all but obsolete.

Deloitte also took a look at the more complicated connection between tech and knowledge-driven sectors such as medicine, education and other professional services, noting that far from destroying jobs in these areas, tech and employment “have marched together.” The 1871 census records that there were 9,832 accountants in England and Wales. Their numbers have risen twenty-fold in the last 140 years to 215,678.

Perhaps the most interesting part of the study is its examination of technology’s impact on driving down the price of essentials, thereby creating new demand and new jobs. Thanks to technological progress, consumers can meet existing needs at lower costs, freeing up income to spend on more discretionary goods and services. Some of these are burgeoning, technology-driven sectors, such as communications and home entertainment, and some are in very traditional non-tech sectors such as personal grooming. In 1871, there was one hairdresser/barber for every 1793 citizens of England and Wales; today, there is one for every 287.

So, is the glass full or half empty? It’s a bit of both. There will certainly be destruction as well as creation, but as Deloitte points out, the last 200 years demonstrates that when a machine replaces a human, paradoxically the result is faster growth and rising employment in time. But Deloitte also cautions that as the pace of tech adoption speeds up, society will need to prepare for higher levels of technological unemployment. “…Change increasingly rewards high-level education and skills, this suggests that income inequality may yet widen.”

Leave a Reply

Your email address will not be published. Required fields are marked *