The fairy tale of job destruction!

Not a week goes by without me reading that digitalization is destroying jobs. What to do with all the people? Technology is making work obsolete and machines are taking over. That’s where things sometimes go haywire. Because the truth is that technology is not destroying human work at all. On the contrary. But it is changing work.

(Reading time 4 minutes)

Facts

The number of total jobs has always been on the rise. Wars and crises can cause short-term slumps in growth. In the longer term, however, the number of people in employment is always rising. So there are always more jobs.

For example, the total number of jobs in West Germany in 1950 was 19.5 million. 40 years later, in 1990, it had already grown to 30.4 million. In 1991, due to the reunification, a further 8 million jobs were added and, after further growth, we are at around 41 million jobs in 2012. Depending on the calculation with East Germany, we therefore see an increase of around 65% over the years.

You will reply that this is quite logical, because there are many more people in Germany. You’re right, there are more. But it’s only around 11% more than in 1960.

What we have to take into account, however, are the enormous productivity gains, as this example from the German Farmers’ Association shows: Whereas in 1950 a farmer was able to provide 10 people with food, in 2012 it is more than 130, i.e. 13 times more.

Although technology has enabled incredible productivity gains, the number of employees has still risen, and by quite a lot. So the bottom line is that there are more jobs. Quite simply.

Change in work

What is true to a large extent, however, is that work is changing. And that’s where the problems start.

My father, for example, had trained as a typesetter and practiced the profession in the 1960s. In concrete terms, this meant that lead letters were put together in a frame until the finished text (mirror-inverted and upside down!) was ready to be used as a printing plate. This was laborious, time-consuming work that did not allow for any mistakes. It took a relatively long time to “set” a single page of a book.

Later came the first electronically supported systems, which exposed films and then etched the artwork onto a printing roller. This enabled faster, simpler and higher quality print processing. My father’s original profession, working with lead letters, disappeared. Except for the one machine that was kept in the company out of sheer nostalgia.

My father remained loyal to the company and the printing industry. However, he never worked as a typesetter on a computer screen. There were already younger and better trained employees. With a wealth of experience, my father made a natural transition into other areas such as sales, customer service and team management. And he actually completed his career in the printing industry.

Today’s typesetting is de facto non-existent. Technology has digitized the transition stages from the creation of the text to the actual printing.

Slow transition to other professions possible

Our parents’ generation proved that a slow change to a different profession can be successful if the driving force behind the change is not too fast and strong. Unfortunately, we are currently saying goodbye to this completely. Technological progress is only getting faster and stronger, and industries are being turned upside down more and more. And with them the employees.

Accelerated technological progress makes slow transition impossible

If technology continues to develop at an accelerated pace, it will no longer be possible to make this transition in a sustainable way. Companies will no longer be able to afford it and will have to make drastic decisions accordingly.

In my father’s example, this would mean that lead typesetting was immediately followed by fully automated systems. There is no question that the employer could not have suddenly, from one day to the next, so to speak, placed 25 typesetters elsewhere in the company. And in the economic climate of the 1970s, we don’t even have to talk about wanting to (or “not being allowed to”).

“Primarily a problem of expectation”

I would have liked to use this sentence as a thesis, but I realize it does an injustice to the people who are suffering from these abrupt changes. You can then come up with “change in expectations” for the dismissed Opel factory worker and family man! That is simply indecent.

Nevertheless, I don’t think it’s so wrong in the context of society as a whole:

We have to let go of the expectation that professional life should be straightforward.

Old hat, you think? Yes, everyone agrees with the above statement in discussions. However, when it becomes known once again that “industrial company XY” is automating significant parts of manual work, the outcry is still loud. A rethink is needed here. From everyone.

Everyone is responsible

Anyone who thinks it only affects employees has not fully grasped the problem.

Entrepreneur

It’s dinosaur thinking to think that the economy can just “get flexible”.

In 2015, it should be clear to every business leader that the economy as we know it is a means to the end of society. And not the other way around.

I think everyone has a responsibility to enable more flexibility. Companies need to recognize early on which technologies will result in which changes and plan and deploy their staff accordingly.

Waiting until the new robot line is available and then announcing the procurement of the machine and mass redundancies within a few months is simply not an option. That is irresponsible. Especially towards your own company.

Because employees have knowledge about so many things in the company in their heads. This needs to be taken on board. Although this knowledge is unstructured and not always easily accessible, it is crucial for long-term success.

Employees

And of course employees need to become more flexible. However, I am more confident about this because I see a lot of younger people who have no intention of working in the same job for the rest of their lives. And yes, this is also the case in very “simple” professions.

State

It is up to the state to facilitate this change through legislation. Not force it. But it must create the conditions for society, and therefore the economy, to reform itself on an ongoing basis. The more the whole thing becomes a permanent reform process, the better. This means that social change can take place in smaller steps, making it easier for everyone. What we see today is far too much adherence to things and ideas that have been declared universally valid.

A life in the comfort zone

However, it must also be clear that this lifestyle of secure income and a clearly defined area has come to an end. It was only possible because the “saturation economy” of the last 100 years has given us an economic illusory reality.

Actually, this has only really worked out for one generation, namely those who were socialized just after the war, i.e. who did not experience the shortages and suffering so directly, and who retired in the last two decades. Before digitalization really took hold.

This model of living in the comfort zone never had a chance of lasting. So please let’s say goodbye to it. And I’ll just say that the number of new opportunities easily makes up for the greater uncertainty. You’re going to come at me with ideology… that’s right!

Because every era has its own concept. Whereas in the post-war years it was the need for material security, today we increasingly see self-fulfilment in the foreground. And you can’t achieve that by binge-watching TV series on the couch every evening.

No, the interesting life begins where things become uncertain. Not dangerous and/or threatening, but not everything can be set and predictable. In this context, I think this increased flexibility and material risk fits in quite well with our times.

Macroeconomic agility and reforms

So if companies and employees need to become more agile in order to survive in a dynamic environment, it is only logical that the entire economy must also become more agile.

There is a huge need for reform at a broad level and I have the feeling that these reforms are being blindly ignored. Examples that are interdependent:

1. Firstly, there is the remuneration of work. I have already explained in another article that personal working hours have fallen drastically and will continue to fall. How is this supposed to work if the remuneration of work continues to be linked to time?
2. On the other hand, demographic trends show that the population is getting older and that we cannot predict the extent to which it will do so very well, as a great deal of technology will continue to improve the situation in this area. (Keywords: technological leaps & personalized medicine)
3. And thirdly, the basis for the pension economy, a functioning capital market, is just about to say goodbye never again. Or do you seriously believe that we will return to an interest rate level like 30 years ago? On what basis is that supposed to happen? Will capital become more or less important? Hasn’t access to and ownership of material goods been gradually but fundamentally decoupled from property (as the basis for interest income) over the last two decades?

Pour the wine and move on

But instead of looking for solutions together and taking care to further relativize expectations of a future pension, for example, we delegate this discussion to politicians, who turn it into short-sighted, tactical theater driven by individual interests.

It is simply easier to argue about details than to deal with dangerous and comprehensive issues. This always results in reforms. And these are not popular. But it would be more tolerable to push ahead with permanent reforms than to accept change in large chunks. Our grandparents, if they are still alive, can tell us a thing or two about this.