Employment in the Global Knowledge Society

1
Employment in the Global Knowledge Society

• Garry Jacobs
• World Academy of Art Science

2
Myths about Employment

• Population growth creates unemployment
• Technology destroys jobs
• Globalization generates unemployment
• Rising levels of unemployment are inevitable

3
Population Employment 1950-2000
4
Population Growth Employment 1994 2004

• Population grew by 763 M (14)
• Employment grew by 400 M (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

5
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

6
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

7
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

8
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, RD,
  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.

9
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

10
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.

11
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

12
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 19

13
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

14
Structural Unemployment

• Symptom of the artificial functioning of the
  society hindered by its structures
• 9 in Europe
• 5.6 in USA

15
How society stimulates employment

• New products
• New services
• Growth in demand
• Higher productivity
• Entrepreneurship
• Access to information
• Technological innovation
• Organizational innovation

• Higher quality standards
• Legislation enforcement
• Administrative efficiency
• Health consciousness
• Environment awareness
• Higher skills
• Increased speed
• Change of attitudes

16
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

17
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)

18
Need for Further Research

• Natural process of job creation
• Project occupation demand
• Project skills requirements

19
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.