Technology trends in the labor market

?? The Global Labor Market Trends report published by the National Labor Observatory in the second quarter of the year 2023 explains well the complex economic phenomenon of the relationship between technology and the future of work. It provides an excellent perspective into the evidence-based process of economic analysis which helps institutions with their workforce decision-making. The report will contribute to the formation of a better labor market in the Kingdom of Saudi Arabia. This dynamic labor market in Saudi Arabia will be able to respond positively to any economic development whether it is local, regional, or global. (P. 25.)?

?? At the beginning, the report praises the idea of technological progress. It leads to more?productivity and more efficiency. Technology enhances the accessibility of markets by the companies. This inevitably will create more novel and capable effort embracing?the full range of activities which are required to bring a product or service from conception, through the different phases of production, to its delivery to final consumers, and its final disposal after use.

?? Accordingly, employees will have better jobs. Their skills will be of high value. This means that technology can maximize the rewards for any company.?

?? Nevertheless, it is very important to take into consideration the fact that not all employees will gain equally as the economy with all its branches adopt these advanced technologies. New technology means economic transformation. Some workers will retain their jobs. Other workers may lose their jobs and will do their best to be still?employable. (P. 8.)?

?? Technological change in the economy will impact the structure of the work force. This will produce different outcomes. Some workers will be vulnerable to substitution and job displacement. The report labels this phenomenon as “technology-biased job polarization”. This could mean the end of several economic employment opportunities. Those workers who might lose their jobs as a result of the introduction of new modern technologies are the ones whose job nature is one of being “codifiable”. Their jobs are actions of routine or a regular set of rules and steps organized by a well-know plan. [This could be described as traditional jobs.]

??? No force is in existence so far that can stop this fast technology introduction, and it causes many hardships for workers and it could disrupt the work environment. There will be negative social outcomes in any society such as inequality, vulnerability, and poverty.?

??? This is the responsibility of politicians and??policymakers. They need guidance to help them mollify the negative dimensions of how new technology could cause job replacement. There are social and economic shocks that accompany new technology-induced economies. There is a reason for the policies that foster what the study terms as “targeted labor market interventions”. This can mean new directions for both the politics and the economy of a certain nation to help ease out any tension in the labor markets. (P.?10).

?? ?Most of the jobs that could be replaced are known as the middle skill jobs.?Based on correct data, over 60% of employment opportunities in the economies of emerging markets nations and developing countries are found in middle skill jobs. (P. 12).

?? To quote the report, “In many countries – particularly developing nations – the jobs growing today are not the jobs of the future. Limited structural change steers the demand for labor towards middle and low skill jobs– precisely those at most risk of vulnerability in the future. These labor market dynamics present a challenge for countries in balancing the need to upgrade to the high skill jobs of the future versus protecting today’s job”. (P. 14).?

?? But another major labor market trend is emerging. It is?the introduction of?artificial intelligence (AI). This could hurt high skilled workers. Their jobs could be substituted by machines. This will be a phenomenon known as “task automation.”?In this regard, several studies?from OECD countries (The Organization for Economic Cooperation and Development), verify that AI could replace high-skilled jobs. This?suggests that high skilled jobs are more vulnerable to AI. These jobs include: business professionals, managers, chief executives and science and engineering professionals. This entails that the process of automation performed by a machine can function the same way how skilled professionals perform executing very complex employment assignments. (P. 14).?

?? Here, the study submits a critical proposal. It writes the following, “If automation does result in a significant employment reductions and greater pressure on wages, some untested ideas like universal basic income may require further exploration”. (P. 17). In addition, there is the possibility of a good impact by artificial intelligence on the labor market. It can improve production. It could yield to a better provision of employment services especially the method known as job matching. This refers to the?process of identifying job roles in an organization that are the most suitable for the qualifications and desires of those seeking a certain employment.?(P. 15).?

?? In principle, the study warns against job polarization whereby jobs could be gained and jobs could be lost as a result of the introduction of new developed technologies in any economy. This is why the report recommend that nations should adopt vast improvements in their education and training systems because the students in many countries are facing learning gaps that are hindering them from entering a more sophisticated labor market. (P. 16).?

??? Two policy directions are proposed. First, a policy of re-employment support and income protection must be implemented for those workers who are in job transitions looking for new employment because new technologies replaced them. (P. 17). The second policy direction is to educate the workforce constantly so they can acquire new skills, and that vocational training should be offered all the time to the labor force. (P. 19).?

??? This is why the right beginning should proceed by improving the foundational skills of the general education system, especially?

early childhood education. These skills must be cultivated regardless of what future high-skilled job will be offered. (P. 19).?

??? Ultimately, the most important way to help an economy adopting to new technologies is that the process of developing new technologies must be gradual and predictable and consistent with the social conditions of the workforce

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