Transcript Employment in the Global Knowledge Society

Employment in the
Global Knowledge
Society
Garry Jacobs
General Assembly of the World Academy
of Art & Science
Zagreb, Croatia, November 2005
1
Myths about Employment
Population growth creates unemployment
 Technology destroys jobs
 Globalization generates unemployment
 Rising levels of unemployment are
inevitable

2
Population & Employment 1950 - 2000
Population & Employment 19506
2000
6
5
140%
Billion
4
3
2.5
200%
2
1
2.7
0.9
0
1950
2000
3
Population Growth &
Employment 1994 – 2004

Population grew by
763 M (14%)

Employment grew by
(17% )

Job creation is at record rates

Shift from manual to mental work has
resulted in a dramatic improvement in
the quality of jobs created
400 M
4
Unemployment 1994 -- 2004

Unemployment rose from 140 M to 180 M (21%)

6% of global labor force of 3 B unemployed

Labor force participation rose 1.5% resulting in
an additional 90 M job seekers since 1990 –
largely due to more working women and delayed
retirement of the elderly
5
Youth Unemployment (under 25)

Unemployment is concentrated among youth
& in cities

Youth are entering workforce faster than job
creation due to high pop growth in 1970-80s

Youth UE: USA – 11%, France – 28%, Croatia
– 37%, Spain – 50%, World – 14%

Mismatch between education, training & jobs
6
Impact of Aging on Employment




Significant labor and skill shortages will develop
in OECD countries
Working age population is declining in OECD
countries -- 8% in EU25 by 2030 – could result
in labor shortage of 70-150 M in EU15.
Labor shortages by 2020: USA 17M, China 10M
Will propel massive migration of people and jobs
7
Impact of Technology



Technological development results in
localized direct low-wage job destruction in
labor-intensive sectors and invisible indirect
job creation in many other sectors.
Technology is stimulus to higher wage
indirect job creation in machine production,
R&D, education, services with multiplier
effect from higher incomes & consumption.
US labor force grew from 29 M to 130 M in a
century of rapid technology adoption.
8
Invisible Job Creation: Computers
Computer research, design and manufacturing
 Same for peripherals & allied products
 Software design, engg, servicing, maintenance
 Making and selling computer games
 Electronics retailers
 Computer training companies
 Web publishing, e-commerce, other web
businesses
 Self-employment – web-based & other
 Recycling old computers

9
Globalization



Does transfer jobs from high cost to low
cost locations, causing disruptions.
Offset by higher purchasing power at home
& reciprocal demand from abroad.
High labor costs alone is not the cause of
job destruction. US labor costs were 10
times higher than Europe in the late 19th
Century. Total productivity of the economy
is the key, i.e. application of Knowledge.
10
Global Shortage of Skills, not Jobs

USA has shortfall of 126,000 nurses & estimates shortfall of
200,000 MDs & 800,000 nurses by 2020.

In Germany, 80% of enterprises with fewer than 20
employees reported difficulties in filling positions.

In Austria, 42% of enterprises face skilled-labor shortage.

50% of firms in developing countries face skills shortage.

Mismatch between skills & jobs due to little or inappropriate
education & training

Only 5% of India workforce have formal vocational training
11
Natural Employment Generation

Average person works only 1/3rd of
lifetime but requires goods and services
3/3rds

Since the providers of those goods and
services also work only 1/3rd of their
lifetime, the ratio of working lifetime
contributed to working lifetime required
of others = 1:9
12
Fractional Job Creation

School going child creates fractional jobs
for
 Teachers
& school administrators
 Authors, printers, publishers
 Medical care providers & researchers
 Garment makers
 Toymakers
 Farmers & food processors
 Retail store & restaurant staff
13
Structural Unemployment

Symptom of the artificial functioning of
the society hindered by its structures
 9%
in Europe
 5.6% in USA
14
How society stimulates employment
 New
products
 Higher
 New
services
 Legislation
 Growth
 Higher
in demand
productivity
quality standards
& enforcement
 Administrative
 Health
consciousness
 Entrepreneurship
 Environment
 Access
 Higher
to information
 Technological
innovation
 Organizational
innovation
efficiency
awareness
skills
 Increased
 Change
speed
of attitudes
15
Job Creation in India
7 M new job seekers annually
 No significant rise in unemployment
 Only 8% of jobs in formal sector
 Little information on where & how jobs
are created in informal sector
 Process of job creation poorly
understood
 Strategy to create 10 M jobs per year
 Indian Employment Guarantee Act 2005

16
Job Creation Strategies











Publicize opportunities in the media -- knowledge
Remove structural impediments & disincentives
Increase access to credit
Incentives for new initiatives
Strengthen or enforce legislation
Impart training (computer-based)
Use insurance as a stimulus
Promote entrepreneurship & self-employment
Promote new organizations
Raise minimum levels of education
Create purchasing power (money)
17
Need for Further Research
Natural process of job creation
 Project occupation demand
 Project skills requirements

18
Conclusions
Now is not the time for fatalism or complacency.
 Full employment is an achievable goal.
 Knowledge, education, training & human values
such as freedom & respect for the individual are
the keys.
 Right to employment should be guaranteed.
 The nation that guarantees it will achieve it.
 Future of Employment is in our hands.

19