The World Economic Forum (WEF) held its annual meeting in Davos earlier this month. One of the focuses for discussion—and topics covered in its Future of Jobs report—was the “Fourth Industrial Revolution.” This “revolution” is a designation for the fast-developing technologies that are catalyzing job automation, creating uncertainty over the future of many job types for workers. Many people fear the effects of robots and machines with artificial intelligence on jobs. In Davos the world’s policymakers and academic elite discussed how five million jobs—including ones thought to be previously “safe” such as doctors and lawyers—could be filled by robots by 2020, with women likely to be most affected.
Our authors Richard Freeman and Marco Vivarelli have written articles on advanced technologies and the effect they will have on the labor market. Freeman, in Who owns the robots rules the world, advises that employees must be empowered to own part of the technology that will replace them, therefore creating an income for a future when their jobs may no longer exist. If this does not happen, then the top stratum of humanity who own the robots will continue to get wealthier, whilst the redundant workers may become “serfs working on behalf of the robots’ overlords.”
Vivarelli has a more positive outlook. He explains that many workers of the future will undertake jobs that we cannot even comprehend yet. In his article Innovation and employment, he suggests that although technological unemployment is a reality we have to face, technological innovation can create many jobs in whole new markets and industries. Vivarelli’s advice is “Policies should maximize the job-creation effect of product innovation and minimize the direct labor-saving impact of process innovation. R&D investments, especially in high-tech sectors, may not only foster competitiveness, but may also be an effective means of creating jobs.”
Employee incentives: Bonuses or penalties? In his article, Daniele Nosenzo, writes that penalty contracts lead to higher productivity in workers than bonus incentives based on performance, but there are consequences.
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