Innovation and the future of work

Globalization brings both good and bad job news. The bad news for high-wage developed countries is that jobs will be outsourced into lower-wage locations as soon as the associated economic activity becomes mechanized and predictable. The good news is that globalization creates opportunities that can be realized by people bold enough to transform new ideas and knowledge into innovations. In that way, entrepreneurs will play a vital role in creating the jobs of the future by transforming ideas and knowledge into new products and services, which will require skilled workers and will provide a competitive advantage for advanced economies.

  • How is new technology changing job design?

    Machines’ ability to perform cognitive, physical, and social tasks is accelerating, dramatically changing jobs and labor markets

    Michael Gibbs, March 2017
    The information technology revolution has had dramatic effects on jobs and the labor market. Many routine and manual tasks have been automated, replacing workers. By contrast, new technologies complement non-routine, cognitive, and social tasks, making work in such tasks more productive. These effects have polarized labor markets: While low-skill jobs have stagnated, there are fewer and lower paid jobs for middle-skill workers, and higher pay for high-skill workers, increasing wage inequality. Advances in artificial intelligence may be accelerating computers’ ability to perform cognitive tasks, heightening concerns about automation of even high-skill jobs.
  • Does broadband infrastructure boost employment?

    Broadband infrastructure has differing effects on workers of different skills

    Oliver Falck, March 2017
    Broadband infrastructure enables fast access to the internet, which, evidence suggests, has significant effects on economic growth. However, labor market related issues have not received as much consideration. These include quantifying employment effects of broadband infrastructure roll-out and questions about who exactly are the winners and losers in the labor market, and whether skills in information and communication technologies (ICT) are reflected in labor market outcomes such as wages. Understanding these complementary issues allows for policy conclusions that go beyond simply encouraging the subsidization of broadband internet infrastructure.
  • Skills or jobs: Which comes first?

    Jobs require skills, but they also build skills and create a demand for them

    Jesko Hentschel, February 2017
    Skills are widely regarded as being necessary for boosting productivity, stimulating innovation, and creating new jobs, while skill mismatches are often cited as being responsible for a lack of dynamism in the labor market. However, heavy investments in technical and vocational training programs are seldom a “silver bullet.” Recent evidence on skill building not only points to the core importance of foundational skills (both cognitive and social) for success in the labor market, but also emphasizes how jobs themselves can lead to learning and shape social competencies that, in turn, ignite innovation and create more jobs.
  • Upgrading technology in Central and Eastern European economies

    Existing policies in Eastern Europe will not sufficiently promote technological innovation

    Slavo Radosevic, February 2017
    The future growth of Central and Eastern Europe (CEE) depends on upgrading technology, exporting and coupling domestic technology efforts while improving their position in global value chains. Current policies in the region are not geared to these tasks, despite the availability of huge financial opportunities in the form of EU structural funds. Existing policies are overly focused on research and development (R&D) and neglect sources of productivity growth, such as management practices, skills, quality, and engineering. The challenge is how to design industrial and innovation policies so that they promote modernization and drive structural change.
  • Does employee ownership improve performance?

    Employee ownership generally increases firm performance and worker outcomes

    Douglas Kruse, December 2016
    Employee ownership has attracted growing attention for its potential to improve economic outcomes for companies, workers, and the economy in general, and help reduce inequality. Over 100 studies across many countries indicate that employee ownership is generally linked to better productivity, pay, job stability, and firm survival—though the effects are dispersed and causation is difficult to firmly establish. Free-riding often appears to be overcome by worker co-monitoring and reciprocity. Financial risk is an important concern but is generally minimized by higher pay and job stability among employee owners.
  • Impacts of regulation on eco-innovation and job creation

    Do regulation-induced environmental innovations affect employment?

    Jens Horbach, June 2016
    New environmental technologies (environmental/eco-innovations) are often regarded as potential job creators—in addition to their positive effects on the environment. Environmental regulation may induce innovations that are accompanied by positive growth and employment effects. Recent empirical analyses show that the introduction of cleaner process innovations, rather than product-based ones, may also lead to higher employment. The rationale is that cleaner technologies lead to cost savings, which help to improve the competitiveness of firms, thereby inducing positive effects on demand.
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