---------- Forwarded message ---------- Date: Thu, 08 Jul 99 20:34:04 From: Roberto Verzola <[EMAIL PROTECTED]> Reply-To: [EMAIL PROTECTED] To: [EMAIL PROTECTED] Subject: [GKD] ICT and Jobs [***Moderator's note: Members may recall that in August 1998, we posted a summary of the ICT-JOBS Working Group discussion, which EDC and ILO hosted in May-July 1998, and which had over 700 members. The article below is another excellent summary of the ICT-JOBS discussion, with a somewhat different emphasis.***] Philippine Journal October 9, 1998 Second opinion ICT: job creator or destroyer? by Roberto S. Verzola Are information and communications technologies (ICTs) a net creator or destroyer of jobs? This was the topic which more than a dozen scholars, consultants and union officials debated in an online conference sponsored by the International Labor Organization (ILO) from May to July this year. It is both As can be expected, the discussants all acknowledged that ICT was both a creator and a destroyer of jobs. That machines and computers are taking over work previously done by human beings was something nobody denied. All agreed that ICT was destroying some types of jobs. But all likewise acknowledged that ICT introduced new ways of doing things, creating in the process new types of work which did not exist before. Despite very strong opinions expressed by both sides, however, they could not agree which role dominated. A job creator Some discussants asserted that ICTs create new goods and services as well as new market opportunities and income sources. Thus, they stimulate general economic activity, which translates into more jobs. The new ICTs, they said, are no different in their effects from the industrial revolution, which enhanced our productivity and improved our living standards. Historical records since the 19th century, they added, showed that productivity, output and jobs have all risen together. Today, the argument goes, ICTs help businesses save money, which these businesses then invest elsewhere, creating new jobs. There is even a shortage of skilled ICT workers. ... and a job destroyer Other discussants claimed that ICTs are selective in their positive impact, and that they lead to unemployment elsewhere. When bosses introduce machines and computers, some workers invariably get fired. In many workplaces today, machines and computers are taking the place of human beings, who are then left to fend off for themselves. A 1994 study by the Communications Workers of America, for instance, showed net job losses due to ICT over a 10-year period. Not even statistics, however, could settle the issue. As one participant noted, the available studies today are confined mostly to Northern countries and a few Asian and Latin American NICs. The present data are too ambiguous for a definite conclusion, and one can find data to support either position. It is also difficult to capture in statistics the effects of ICTs on the informal economy which in many countries, is a big part of the whole economy. Some insights emerged in the discussions which can help us better understand the impacts of ICT on labor. Work-at-a-distance, manage-at-a-distance ICTs facilitate work-at-a-distance. This could led to the increasing use of teleworking, to which many workers react ambivalently. It is true that teleworking provides new opportunies for women in the home, for instance, or entrepreneurs in remote villages. But teleworking also breaks up labor cohesiveness and weakens unions; furthermore, it tends to exclude the teleworker from traditional social security and other job benefits. ICTs also provide management with new options in designing work processes and the workplace. They can ask their workers to work at home, or they can gather previously decentralized functions like decision-making and put them all in one central unit, decentralizing some functions and centralizing others, in whatever mix they find most advantageous to the company. Jobs: from large to small firms ICT has also made the virtual firm possible, an enterprise that outsources much of its requirements and relies on ICT to hold the organization together. Much has been made of the advantages of the virtual firm -- flexibility, efficiency, and competitiveness. Outsourcing also tends to transfer jobs from large companies -- which become virtual firms -- to smaller companies. What is a dream to corporations is a nightmare to labor unions; small firms are more difficult to unionize and tend to violate labor laws more often. One effect of outsourcing is labor contractualization. Who decides? The key, it seems, lies in the decision-making that leads to ICT use. Invariably, it is management which decides when to introduce and when not to introduce ICT into the workplace. Thus, the criteria for ICT use will be management criteria, not labor criteria. >From the management point of view, machines and computers are very often preferable to human labor. Machines don't form unions; they don't go on strike. Machines can be upsized, downsized, rightsized or whatever-sized anytime; they can be run faster or slower, longer or shorter. Machine outputs are more consistent and reliable, resulting in better quality and lower cost. Whatever is profitable Where it remains more profitable to use human labor instead of machines, management will obviously stick to human labor. They can relocate where human labor is cheap and maintain control through ICT and telemanagement. The logic of profitability, however, will continue to reassert itself; as soon as it becomes profitable to do so, management will eventually switch to machines. It is true that machines and computers may require new skills, and therefore create new jobs (computer operator, technician, Web page designer, Webmaster, Java programmer, etc). However, this job creation is an incidental part, while job elimination is the intentional part of the logic. New jobs need new skills, are less secure Also, the jobs destroyed are actual people with real families, while the jobs created are potential jobs. To qualify for these new potential jobs, job-seekers have to go through a long and often expensive process of retraining. Furthermore, the same logic will also apply on the new jobs that ICTs create -- these jobs will also be replaced (by automated software, expert systems, "disintermediation", etc.) when it becomes profitable to do so. As the pace of technology development increases, the pace of job elimination and replacement also speeds up. Even those who might have the skills to acquire new jobs are under constant threat of replacement or displacement. (Can Pascal or Dbase programmers still find jobs next year as easily as last year?) While the net quantitative effects of ICTs are still being debated, their qualitative effects are clear: they have made human labor more replaceable and jobs less secure.