Digitization of work heading for massive unemployment or new prosperity
Digitization of work: heading for massive unemployment or new prosperity?
Telecommuting is not a new phenomenon. On its own, it has existed for at least a decade, yet was marginally applied until the arrival of the Covid-19 pandemic. It has been becoming the daily routine for many qualified employees since March 2020. This may continue even when the crisis ends. Companies have been compelled to digitalize work interactions and invest in further technology to automate certain tasks.
What will be the consequences of this labor digitization in the short, medium and long term?
A positive impact on the well-being of white-collar workers in the short term
Surveys show that “white collar workers” who had the opportunity to work at home during lockdowns are mostly satisfied. 86 % of French teleworkers in 2021 would even like to carry on this practice after the health crisis, according to the results of the annual Malakoff Humanis telework barometer. Reasons for this are numerous: more flexibility in terms of working hours, shorter travel time and costs, as well as possibility to move away from the workplace. Most white collar workers will still be able to enjoy these benefits for some time. Indeed, they will move in the short term to a hybrid work week with about 3 days in the office and 2 days at home.
The risk of mass unemployment in the medium term
In the medium term, the digitization of work could lead to unemployment for local workers. New technologies are quickly developing, improving remote collaboration, such as virtual reality tools or translator software. With these innovations, local companies may be tempted to relocate skilled jobs to other countries where labor is cheaper. Economist Richard Baldwin calls this phenomenon “telemigration. At the same time, there is also artificial intelligence (AI) that is getting better than humans at handling specific tasks. Skilled workers may then face increased competition from both tele-migrants and robots in the near future.
Rebuilding prosperity with rapid adaptation of society
But this situation is perfectly avoidable. Indeed, previous experiences have shown that tele-migrants and AI do not necessarily replace the local workforce, but complement it in many ways. Digital technologies are evolving at great speed, forcing society to adapt quickly. In order to achieve this, the educational systems of future generations must first be redesigned so that humans retain a clear comparative advantage over robots. Training must also be reoriented to areas where local knowledge and geographic proximity are essential. Second, the existing local workforce must be provided with better social protection and retraining programs that facilitate a career change. Finally, if large companies decide to substitute traditional labor contracts with AI and tele-migration, a progressive tax system and new labor laws will be needed. This will counteract the explosion of social inequalities.
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