Technological Change and the Future of Work
By Peter Senker Senior Fellow in the Science Policy Research Unit, Mantell Building, University of Sussex, Falmer, Brighton BN1 9RF, UK.
Schumpeter, most of the classical and neoclassical economists who
followed Adam Smith have neglected the profound influence of changing
products on economic development, and the effects of a changing
product mix on the location of industrial activities and employment.
The goods with which Adam Smith?s analysis was mainly concerned were
the basic goods of his time: The tailor does not attempt to make his
own shoes, but buys them off the shoemaker. The shoemaker does not
attempt to make his own clothes, but employs a tailor. The farmer
attempts to make neither the one nor the other, but employs these
different artificers.
[6] One of the most important aspects of the profound economic
changes which have occurred in the past 200 years has been the change
in the emphasis of production from the basic products such as
clothes, food and shoes with which Smith was concerned. Conventional
neoclassical economics mainly considers productivity and efficiency.
It is not primarily concerned with issues such as what products or
services are produced, for whose benefit, or who is employed in
production: in that sense, it has not progressed much beyond Adam
Smith. Some significant modern technologies
Freeman
[7] suggests that changes of technoeconomic paradigm based on
combinations of radical product, process and organizational
innovations are more or less inescapable. He considers the adoption
of Fordist mass production and assembly line techniques as one
paradigm change; and the change to more flexible manufacturing
processes involving information technology as a further one. At
present, the most important cluster of technologies in terms of their
implications for the future of work are microelectronics and
information technologies: these are likely to remain important for
several decades. In addition, a vast range of new materials is likely
to come into significant use in the next 10 to 15 years.
Biotechnology is also likely to begin to become significant in
employment terms by the early years of the 21st century. Freeman
suggests that competitive pressures in the world economy are so
strong that once such a paradigm has crystallized, it is hard for
firms and countries to be non-conformist. Technological choices
become increasingly constrained, even though an element of social and
political choice remains. Even socialist countries which have
attempted initially to opt out of a pattern of technology
characteristic of the capitalist countries have after a decade or so
generally been obliged to fall in with worldwide trends, with
relatively minor differences. This was the case with the USSR after
intense controversy in the 1920s, which adopted Fordist assembly-line
technology and even Taylorism in the attempt to overhaul the
capitalist countries.
Before considering the future location of economic activity and its
implications for the quality of work it is necessary to outline
developments in the ?clusters? of technology which are likely to be
most important in the foreseeable future - information technology,
new materials and biotechnology. There is widespread speculation that
IT will be utilized in the next 10 years or so as the basis for the
development of ?automatic factories?. The automatic factory depends
essentially on the ability to pass computerized information between
various functions - for example between design, production, marketing
and information. Kaplinsky has published a wide-ranging and
thoughtful survey of automation and its prospects. He points out the
need for information to be available in compatible formats for it to
be used for the integration of various functions effectively. The
harmonization of functions necessary is facilitated by
rationalization of design and process. Standardization and group
technology (GT) are key to this. GT involves parts being grouped into
families, thus simplifying and systematizing design and production.
Kaplinsky suggests that fully automated production - the true factory
of the future - will be fairly widespread in the 1990s.
[8] There are, however, grounds for believing that he may have
overestimated the speed at which these developments will take place
and, at the same time, underestimated the skills needed for their
achievement.
[9] IT products and services IT products include telecommunications
equipment, defence and transportation electronics, factory automation
and electronics products for use in the home, office and car. Much of
the employment growth related to IT arises from the use of IT
equipment to provide services, from telecommunications to insurance.
Much service production involves the provision of services to
manufacturing industry. In addition, the knowledge to provide
?product-based services? tends to be concentrated amongst those who
design the products.
The four areas likely to have the most impact on employment, skills
and working life are developments in plastics such as strong
engineering plastics, adhesives, composite materials and advanced
high-performance technical ceramics. Steel has long been a dominant
material, but its dominance is likely to be eroded during the period
under consideration. Nevertheless, steel makers are likely to respond
to the competitive challenge from other technologies, and some new
materials techniques - for example the creation of composites - are
likely to be applied to steel as well as to plastic and other
materials. Achievement of forecast growth in advanced ceramics
markets depends on success in development in a number of directions,
including improved reliability and cost reduction in several
applications such as cutting tools, turbocharger rotors, mechanical
seals and valve guides. Much of the future growth in plastics use is
likely to be in the automobile industry, substituting for metals in a
wide range of applications including under-bonnet components, leaf
springs, the drive train and exterior trim.
[10] Biotechnology During the next 10 years, the increase in
employment resulting from the development of biotechnology will
probably be relatively small and concentrated on R A recent OECD
report [11] suggested that, in the early years of the next century,
biotechnology would begin to acquire importance of the same order as
that of IT now. In the 21st century, biotechnology could become a net
creator of employment, creating new (as well as substitute)
industrial products and agricultural crops, and creating new means of
environmental protection. Location of economic activity
IT. US production of IT products is by far the largest in the world at present, but Japan is catching up fast. Japanese competitive strength in world markets is reflected by large exports, and it has been suggested that this strength may well increase - to the point where, in about 15 years, their exports will represent twice the value of their production. Of course, trade barriers may slow the growth of Japanese exports. Total Japanese production could catch up with that of the USA in 15 to 20 years, with both countries employing about 5 million people each in IT production. While European markets are much larger than Japan?s at present, in terms of production and employment, Europe is likely to lag far behind and could experience a growing trade deficit. It has been suggested that ?skill clusters? - concentrations of expertise - are critical to success in IT. While such concentrations have been created to some extent in Europe, they are not as large or growing as rapidly as in the USA and Japan. Electronics production in other countries is relatively small - perhaps 10% of total production in Japan, the USA and Western Europe.[12] New materials. It appears that the leading countries in the exploitation of new materials are likely to be Japan and the USA, followed by Germany. For example, most estimates and forecasts show Japanese production accounting for about half of a rapidly growing world market for advanced ceramics between 1980 and 2010. The Japanese industry is already well developed. Several manufacturers of more traditional materials, together with firms such as electrical appliance manufacturers which use the new materials, have already started advanced ceramics production and development. A similar pattern has arisen in the USA, but the European industry has progressed less rapidly. The UK industry is still very small. With few exceptions, end-users have not become involved in R to the same extent as in other advanced industrial countries: the UK domestic market is minute.[13] While Japan is a major user of advanced plastics, the USA is the leader in advanced plastics such as engineering plastics and advanced composites. The US lead is sustained by large users in aerospace and defence industries, and by their large markets for luxury goods such as speedboats. In Europe, the powerful chemicals companies, and large automotive and electrical user industries contribute to the strength of the German plastics industry, which leads those of France, Italy and the UK.