The last few years have seen numerous studies pointing to a bleak future with technology-induced unemployment on the rise. For example, a pivotal 2013 study by researchers at the University of Oxford found that of 702 unique job types in the U.S. economy, around 47 percent were at high risk of computerization.
This was backed up by similar findings in Australia suggesting 44 percent of occupations—representing more than five million jobs—were at risk over the coming 10 to 15 years.
Is the situation really so dire? Are we heading towards mass unemployment as computers and robots do all the work? The short answer is no.
The economy can be expected to create new jobs at a commensurate rate at which it extinguishes existing jobs. There are reasons to believe that job creation will outpace job destruction.
History Rhymes
However, the full answer is more nuanced. Australia’s current and future workforce is certainly in for challenging times ahead. We are entering into an era of more rapid than usual technology-fueled disruption of labor markets.
The exponential growth in device connectivity, platform economies, e-commerce, social media use, computing power, data volumes, and overall Internet penetration will change the nature of work. Some are suggesting that platform economics and the new gig economy are set to challenge the longstanding theory of the firm by Nobel Prize laureate Ronald Coase and fundamentally restructure the way labor is organized.
Such sudden shocks have happened in the past. The industrial revolution of 1750–1850 saw the invention and widespread adoption of the steam engine, spinning wheels, cement, chemicals, and many other technologies. These discoveries improved the productivity of industry.
