I am writing this post today, May 1. I remember that, as a teenager concerned about social equality, I saw May 1 as an important day and innocently believed that we were celebrating everyone’s day because we were all workers. Later, with my father’s guidance, I learned about the concepts of business and employment and the role of trade unions.
In the first year of my degree, I became fascinated by economic history—although I found it difficult to understand—and was deeply influenced by Karl Marx and Adam Smith and his concept of the “invisible hand” of the free-market system. I also read Karl Marx in depth, coming to understand the concept of the employee (or labor power or hired worker), as well as his concepts of capital and the proletariat.
The concepts of the employee and the business owner emerged with the Industrial Revolution in the nineteenth century and became established during the Second Industrial Revolution, forming the basis of the labor market and the economy as we have known them until now.
But the Digital Revolution, together with the Fourth Industrial Revolution, is profoundly transforming every sector of the economy, as well as most social and economic models.
We are truly undergoing a change of era. We do not know how it will affect the world, but I have no doubt that the change will be rapid and profound, mainly because of four key factors:
1. For the first time in economic history, technology has digitalized, through social networks, communication between people, and its impact has reached the entire globe. Africa and Asia are also connected to the Internet. Although we do not know what this new era will look like, I like the concept of the “Age of Networked Intelligence.”
2. A range of new technologies is emerging and changing the rules across most economic sectors: Big Data, Virtual Reality, Artificial Intelligence, 3D Printing, the Internet of Things, Robotics, Nanotechnology and Blockchain, among others, are transforming business models and offering limitless opportunities to create new companies at exponential speed and with disruptive potential.
The challenge we now face is how to distribute income in a world that will probably have less employment.CLICK TO TWEET
The timing and scale of these structural changes in the economy are extremely difficult to predict. However, the speed at which developed economies are adopting robotics technologies is affecting the policies that many countries are pursuing to reduce income inequality, such as increases in minimum wage rates and incentives for research, development and innovation.
3. The new technology-based leaders are global, enormous and virtually unique within their sectors. Amazon, Alphabet (Google), Facebook, Uber and Airbnb—most of them American—are transforming businesses, employment and income-distribution models, while reducing the tax revenue contributed to the countries in which they operate.
The challenge is to establish how taxes should be paid in order to maintain the welfare state in European countries while twentieth-century companies undertake their Digital Transformation and employment itself changes. This transformation comes not only from the emergence of new roles such as Digital Professions, but also from the need for new skills such as complex problem-solving, critical thinking and creativity.
4. Without question, the greatest impact will come from the Robotics Revolution: The Automation Economy across every field, particularly in the transformation of employment.
We are moving toward an era with less employment, and that employment will bear little resemblance to our current idea of a job. Digitalization will not simply replace some jobs with others; instead, most employment will become “uberized”—flexible and precarious—as explained by Gregorio Martín, Professor of Computer Science and Director of the UPV Institute of Robotics.
Most people will probably be self-employed workers, entrepreneurs, small-business owners or work flexibly for others, with all the advantages and disadvantages this entails.
The challenge we now face is how to distribute income in a world that will probably have less employment. Although it is still too early to speculate, I agree with Professor Xavier Ferràs: I do not believe robots themselves should pay taxes, but rather the income generated by technology.
Although jobs will be destroyed, new jobs will be created. They will be far more interesting, but very different from today’s roles. In the twenty-first century, remaining connected, informed and trained is essential.
And with all these changes… are you prepared for the jobs of the twenty-first century?
Originally published on Mujeres Consejeras by JOANA SÁNCHEZ
