Ethiopian Business Review

Fears about the impact of technology on the labor market are nothing new. In the early nineteenth century, a group of English textile workers known as the Luddites worried that new technologies like power looms and spinning frames would cost them their jobs. They protested by smashing the machines.

Today, anxiety that new technologies could destroy millions of jobs is as high as ever. In the midst of a major employment crisis, technology continues to reduce the labor needed for mass production, while the automation of routine legal and accounting tasks is hollowing out that sector of the job market as well. The science of robotics is revolutionizing manufacturing; every year, an additional 200,000 industrial robots come into use. In 2015, the total is expected to reach 1.5 million. Adapting the labor market to a world of increasingly automated workplaces will be one of the defining challenges of our era.

Yet no country can afford to ignore the transformation. Globally, some 200 million people are unemployed, up 27 million since 2008. There is a critical need to anticipate coming technological changes and provide the global workforce with the education and skills needed to participate in the modern labor market.

Worldwide, one-third of employers surveyed complain that they are unable to find workers with the right skills for existing vacancies. Efficient paths from training and education programs to the world of work must be built, so that skills can be matched to market demand. Government programs must be strengthened, and employers and trade unions must assume greater responsibility for investing in skills. They also must consult more closely with educators and policymakers – discussions that should be informed by labor-market information, performance reviews, and the availability of employment services.

Whatever a country’s development level, investment in education and skills will increase the ability of its workforce to innovate and adapt to new technologies. Such investment can determine whether a country’s economic growth is broadly inclusive or leaves large segments of society behind. An abundant supply of workers who have been appropriately trained and can continue to learn boosts investor confidence and thus job growth.

In addition to training the labor force for an age of further automation, sustainable economies must offer protections for workers in good times and bad. The nature of a worker’s relationship with his or her employer is changing. People entering the labor market are increasingly finding only short-term or temporary contracts; often, they are forced to take informal work or emigrate for a job. These trends are exacerbating income inequality.

As a result, mitigation policies are necessary. Along with a robust system of unemployment benefits, social protections such as healthcare and pensions are essential for overall worker security and to ensure a healthy economy. And yet only 20Pct of the world’s population has adequate social-security coverage; more than half lack any coverage at all.

That is why the work of the International Labor Organization, which was established in 1919, is still relevant today. In a world of increasingly automated workplaces and eroding employee-employer relationships, the values encoded in the ILO’s labor standards are more necessary than ever.

The complex challenges facing workers worldwide will require complex solutions. In 2013, the ILO launched its Future of Work initiative, which seeks to identify and analyze incipient trends and provide a forum for discussion about what must be done to adapt to rapidly changing labor-market conditions.

Our world has changed vastly over the past century – and not only because of technology. By 2050, the global population will surpass nine billion. The number of people aged 60 years and over will have tripled. Three-quarters of the elderly will be living in what are now developing countries, and the majority of them will be women. These demographic shifts will further revolutionize the labor market, social-security systems, economic development, and the world of employment.

For all of the progress human society has made since the era of the Luddites, a simple truth persists: machines must strengthen, not weaken, our prospects for inclusive growth and broadly shared prosperity. We must ensure that the modern economy is a sustainable one, built on the principles of human dignity and the opportunity for decent work.

This article is provided to EBR by Project Syndicate.

Guy Ryder

Guy Ryder is Director-General of the International Labor Organization. 

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