Category Archives: Layers PD

Does technology destroy jobs

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Infoposter_V1The argument over whether technology creates or destroys jobs has been going on for as long as I can remember.

Only yesterday John Naughton, in an article entitled “We are ignoring the new machine age at our peril“, worried about the impact of self driving cars and other technology on the future of employment. Naughton argued that there are “radical discontinuities that nobody could have anticipated”, driven by “combinatorial” effects of different technology trends coming together. These, he siad, include: “the near-infinite computing power provided by Moore’s law; precise digital mapping; GPS; developments in laser and infrared sensor technology; and machine-learning algorithms plus the availability of massive data-sets on which to train them.”

He warned the outcome could be “that vast swaths of human activity – and employment – which were hitherto regarded as beyond the reach of “intelligent” machines may now be susceptible to automation.” he went on to quote a studyby  Dr Carl Benedikt Frey and Michael Osborne, two researchers at the Martin School in Oxford,T heir report, The Future of Employment: How Susceptible Are Jobs to Computerisation?,  estimates the probability of computerisation for 702 detailed occupations, based on US government classifications of those occupations.  About 47% of total US employment, they conclude, is at risk from technologies now operational in laboratories and in the field.

However a study entitled ‘Are ICT Displacing Workers? Evidence from Seven European Countries‘ by Smaranda Pantea, Federico Biagi and Anna Sabadash from the Institute of Prospective Technologies in Seville comes up with a different answer. Looking at micro data ins even European countries for companies in the manufacturing, ICT producing and service sector the study found “a non-significant relationship between employment growth and ICT intensity among ICT-using firms.: The authors say: “Since our estimates mainly capture the “substitution” effects of ICT on employment (i.e. those due to ICT substituting for some type of labour and to ICT increasing productivity and hence reducing demand for inputs, for constant values of output), our results indicate that these effects are statistically insignificant.”

Of course this study and the American study are not directly comparable. They looked at different things and used different methodologies. One conclusion might be that whilst technology is not being directly substituted for overall employment, it is changing the nature of jobs available. Some labour market studies (for instance based on the US O*Net surveys) have suggested that what is happening is a bifurcation of labour, with an increasing number of high qualified jobs and of low skilled (and consequently low paid) service sector jobs. And of course another impact may be on the ;content’ and different skills required in different jobs. For instance our work in the construction industry through the Learning layers project suggests increasing adoption of technology is leading to the need for new (and higher) skills levels within what was traditionally seen as a lower skills sector. This has considerable implications for vocational education and training. ather than training for presents skills demands VET systems need to be looking at future skills. And by providing those future orein3eteds kills this could provide a workforce and society with the abilities and motivation to shape our use of technology in society, rather than as John Naughton fears that “we’re bound to lose this race against the machine” and in the course “enrich the corporations that own it.”

How can we make work in construction trendy?

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For some reason the construction industry is not a sexy research area. Motor cars, yes, machine tools, yes, the computer industry, yes, yes, yes. But poor old construction, boring. Yet in economic terms, construction could be seen as the most important sector in Europe.

Our initial research under the Learning Layers project reveals some interesting contradictions. The construction industry is probably the biggest victim of the present recession. Even the neo liberal UK government is now taking actions to stimulate house building – through the partial nationalisation of mortgage debts. Probably an emphasis on infrastructure projects or on social housing would have had a bigger impact and would have avoided the risk of another house price bubble. But the fact they are doing anything at all shows the problem.

But whilst the recession has badly hit profitability and employment another concern has arisen in our interviews with construction companies. Managers are severely worried about the ability to recruit new trainees and particularly to recruit the better educated apprentices they see as critical to cope with the increasing use of technology in construction. Managers point to the major issue as being the image of the industry – just as in research they consider the industry not to be sufficiently sexy. They are less likely to discuss issues such as wages, opportunities for progression or just the sheer hard physical work involved in many construction trades. Having said that, reality may be very different from practice in other images which have a positive image. Work in the games industry can be hard, poorly paid and boring. And for every kid who makes a fortune out of a mobile app, thousands make no money at all.

Either way they are right in that there will almost certainly be demand for new skills to deal with technology – both in the uses of technology for construction but perhaps more important the changing materials being used in building today, not least due to ecologiocal and energy saving concerns and legislation. Whilst improving initial education training programmes is one response and attempting to improve the image of the industry, the big challenge may be to improve research and development and to develop more continuous training for existing employees. In this short extract form previous research, below, we provide an overview of the industry in Europe and Germany, together with issues in how training – or informal learning – might be improved.

The total turnover of the construction industry in 2010 (EU27) was 1186 billion Euros forming 9,7% of the GDP in 2010 (EU27). The construction industry is the biggest industrial employer in Europe with 13,9 million operatives making up 6,6% of the total employment in EU27. In addition it has a substantial influence on other industries represented by a multiplier effect. According to a study by the European Commission, 1 person working in the construction industry is responsible for 2 further persons working in other sectors. Therefore, it is estimated that 41,7 million workers in the EU depend, directly or indirectly, on the construction sector. Out of the 3,1 million enterprises 95% are SMEs with fewer than 20 and 93% with fewer than 10 operatives.   The level of investment in R&D in the European construction sector is low compared to other sectors. The construction sector only invests a small portion of its total production value in research, development, and innovation.

The developments of new processes and materials provide substantial challenges for the construction industry. The traditional educational and training methods are proving to be insufficient as the rapid emergence of new skill and quality requirements (for example those related to green building techniques) require much faster involvement and action on all three levels (individual, organisational and cluster) in order to react quickly to these changes and exploit opportunities. Without this the market potential is hampered by lack of innovation skills and training gaps (Dittrich, Deitmer 2003). The increased rate of technical change introduces greater uncertainty for firms, which, in turn, demands an increased capacity for problem solving skills (Toner 2011, 7). This situation is aggravated in some fast developing European Regions because skilled craftspeople are missing. Therefore there is increasing need for rapid re- and upskilling of the building workforce across the construction cluster.

The construction industry in Germany is one of the country’s most stable economic sectors. Providing jobs to more than 2,2 million people it holds a market share of 21% making the German construction sector the largest in the EU27 in terms of production value. In Germany the federal states, enterprises and the apprentices share the costs of the dual education system (practical training in schools and on-site training). The German compensation fund for construction industry SOKA-BAU reported a total of 270 million Euros of training allowances and job training costs in 2010 making it just a little more than 0,1% of the total production value. In fact, the building trade has one of the lowest participation rates for employees towards further training provision than any other sector (TNS INFRATEST 2008). This is because much of the formal training offering is only weakly connected with real work tasks. The cost pressure in building enterprises limits chances for time-consuming training measures far away from the workplace (Schulte, Spöttl, 2009). Any mobile support for learning and informing at the work place would be welcomed by companies as well as by building workers themselves. With enterprises paying for all the costs associated with the on-the-job training, SMEs need a cost effective solution to overcome the issues that occur with the rapid development in the technologies, processes and materials.