The changing job market

I just read that in the US, college graduates have trouble landing jobs related to their education if at all [1]. This vividly reminds me of a TED talk given by Andrew McAfee about what future jobs will look like. The following is a video really worth watching!

I think that Andrew McAfee has said everything much better than I ever could. I will however, try to lay out some thoughts below.

It is only natural that technology changes the job market. Let us see the following simple example. Years ago, when people moved around on horseback or in horse-drawn carriages, there were many blacksmiths primarily involved in horseshoe manufacturing. The increased need for horseshoes skyrocketed blacksmithing as one of the great staple crafts of medieval and modern times [2]. Technological progress changed that in many ways. The means of transportation changed and the way of good manufacturing changed also. I think that today there are only a few blacksmiths making horseshoes in the developed world. Horseshoes (admittedly very few in total, as compared to previous times) are mostly manufactured by metallurgical companies along with other goods. The need for horseshoes can no longer support the same job positions it supported previously.

At the time that the need for horseshoes started declining fast, some of the craft professionals were left out in the cold as they did not foresee the imminent extinction of their profession and the slimming of their clientele. It was only expected for them to be frustrated. The simple minded among them would even become enraged against “evil progress” bringing the cars, which in their minds were the reason they were losing their means of subsistence. I am sure there are people today who would complain about the tragedy that struck the blacksmiths, proposing a return to the “good old times”! Thankfully, it is impossible to go back and they are very few! Anyone around who would prefer taking an intercontinental business trip on horseback? I didn’t think so…

Metaphorically speaking, “blacksmiths” exist at any point in time. It looks like most individuals and societies at large, miss to see the coming changes. They miss starting reforms early enough and end up facing insurmountable difficulties when changes finally happen. This is the mechanism that creates societies that resist innovation and dwell in the past. In extreme cases such societies also revolt against reality and reason only to get deeper in the trouble due to resisting essential reform. Andrew McAfee urges societies to become better in “producing” individuals who will be employable under quickly changing circumstances. Mobile workers.

More food for thought is provided in the following video in which Ken Robinson explains how our educational system was designed for the era of industrial revolution and why it needs to change. The video is an adaptation of Ken Robinson’s RSA talk and has been enhanced with great drawings by Cognitive Media.

What we have come up against today, is a great change in technology and communication, which has reshaped profoundly the way business is conducted. There is a tendency for direct communication to increase and in the process, uproot middlemen and bureaucracies. In simple terms this means that once again a lot of today’s jobs will soon become extinct. The sheer magnitude of the technological changes we are currently going through reflects the high number of disappearing jobs. Changes in technology and communication permeate the whole world and the effects on the job market are probably already measurable.

In addition, the resistance to innovation leads to a lack of structures which will employ highly skilled individuals after they complete their studies. That is how we ended up with a surplus of unemployed or underemployed college graduates. Such a situation is unfortunate. The problems humanity faces are not smaller today. In fact they are always pressing. We cannot afford not using all these skilled people. We just lack the mechanisms to harness this historically unprecedented global creative potential.

The bright side of all the above is that new opportunities are always arising. Problems to be solved are endless! So is improvement of human life. What remains to be managed is change in order to make life easier while helping individuals remain employable. In this sense, employable means being able to participate in society. I see this as the most important aspect of employment. To achieve this huge task governments (currently managing education in most countries) need to respond and reform quickly. Education needs to change in the direction the world is going, i.e. towards provision of useful services that will replace older non-efficient forms of services. Bureaucracy also needs to change. It must become responsive and adapt itself to the needs of society. On the other hand we need to keep in mind that bureaucracy is notorious for resisting reform. The following example will give a sense of what I mean when I say making services more efficient.

The postal service!

In many countries, private and public companies spend a lot of resources in order to communicate with their clients by traditional snail mail. Most of it, if not all of it, is not needed from the time email entered our world. A modern form of postal service would circulate a tiny fraction of the material it circulates today. It’s services would be required for delivery of physical objects but not for an electricity bill! However the current model is still alive because not everyone is using email. This will change in the future and will result in the extinction of the postal service as we know it. It is just inevitable. There will certainly be a lot of resistance from groups which have vested interest to support the existence of this service (such as current employees). In the end though reality will win. The interest of the majority to spend reduced resources on traditional postal services will finally become obvious. The minority of employees (and people not using email) will be unable to resist the change forever. You may be wondering why I thought of the postal service example today… This is why:

The amount of spam I receive in my mailbox in about a week's time. I have to keep an eye because if I forget to clean it I will quickly run out of physical mailbox space!
The amount of spam I receive in my mailbox in about a week’s time. I have to keep an eye because if I forget to clean it, I will quickly run out of physical mailbox space!

Who knows, I may after all need some space to receive physical, useful objects by post from time to time!

Humans tend to like making their lives easier. This is the driving force of change. Wise management of our resources is at the core of our survival as a species. This is in fact the real scientific meaning of ecology. The big picture can definitely change to the better and more practical through the help of our collective ingenuity. As it has always. Slowly. But I remain optimistic that necessity and survival of the species will keep winning over the destructive and irrational resistance of vested interests. All we need is a fair amount of uninterrupted time to progress. From a social engineering point of view, we can foster progress by designing processes reasonably towards practical results. The sets of incentives need to be clear and non-conflicting, taking into account human nature towards comfort (one of the driving forces behind vested interests). It sounds simple but reality shows it is not that much. We may revisit this issue in a later post

References

  1. J.R. Abel, R Deitz, Yaqin Su. Are Recent College Graduates Finding Good Jobs? Federal Reserve Bank of New York, Current Issues in Economics and Finance. Volume 20, Number 1, 2014.
  2. Wikipedia. Horseshoe. Accessed on 17 January 2014.

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