Is the world heading to the end of work?

28Jun 2016
Ambassador Juma v Mwapachu
The Guardian
Dynamic Realities
Is the world heading to the end of work?

Around the world, almost every country is caught up in the frenzy about the challenge of growing and high levels of unemployment. It is clear that the world has entered a period of new drama in which the entrenching relationship between technology and employment is becoming heightened.

In a compelling 1995book entitled, ‘The End of Work-The Decline of the Global Labour Force and the Dawn of the Post-Market Era’, Jeremy Rifkin who is the President of the US Foundation on Economic Trends, argued that “after years of forecasts and false starts, the new computer and communications technologies are finally making their long-anticipated impact on the workplace and the economy, turning the world community into the grip of a third great industrial revolution.

Already millions of workers have been permanently eliminated from the economic process, and whole job categories have shrunk, been restructured or disappeared.”

Social and Economic Dislocations

Rifkin proceeded to postulate that “re-defining opportunities and responsibilities for millions of people in a society absent of mass formal employment is likely to be the single most pressing social issue of the coming century”.

Moving into the latter part of the second decade of the twenty-first century it is evident thatglobal unemployment and youth unemployment, in particular, and going beyond the Rifkin technology-employment causal relationship, have become a troubling global phenomenon of serious social and economic implications.

It is estimated that there are 75 million young people around the world who are presently unemployed and three times as many who are underemployed.

A McKinsey Global Institute Report, May, 2012, ‘Trading Myths: Addressing misconceptions about trade, jobs, and competitiveness’ observes that ‘youth unemployment is approaching crisis proportions’.

Indeed, in the European Union, youth unemployment in the last two decades has almost tripled the rate of general unemployment. Greece and Spain have youth unemployment rates that are upward of 50 per cent. Moreover, a new paradoxical manifestation of unemployment is that while employers in many countries have millions of vacant positions to be filled, yet millions of young people are without jobs. It is a new crisis of skills mismatch with new job demands.

Retreat from Welfare State

In Europe, the dominant retreat from welfare state policies and the entry of broad and rigorous fiscal austerity measures as part of a policy response to sluggish and anaemic economic growth have had a significant contributory effect onunemployment.

In Tanzania specifically, the declining quality of education, across the board following a fast changing economic environment in the past three decades that has seen the ascendancy of knowledge driven economic sectors like banking and financial services, transport and logistics, information technology (IT) and telecommunications and hospitality, has contributed to serious job skills mismatches and thus structural unemployment.

It is important to note that within Africa, unemployment generally and youth unemployment in particular have become triggers of political crises as well as instability.

The ‘Arab Spring’ was fundamentally a youth unemployment manifestation. Some of the on-going religious extremist phenomena could also be very well driven by or attributed to panted up frustrations and angst among the youth who feel that their nation states have failed to respond to their state of hopelessness.

Digitization and Changing Dynamics of Work

But could it also be that what we are broadly experiencing around the world in relation to growing unemployment is in fact, as Rifkin warned a result of the changing dynamics of work? Are jobs becoming scarcer and scarcer as the world becomes more technologically driven? Prof William Brian Arthur, a US economist associated with the Palo Alto Research Centre and the Santa Fe Institute in the United States has analysed the impact of digitization on the US economy.

He estimates that if all the economic activity now performed by digital networks all over the world, without human involvement, were added up, the result would be equivalent to the entire economic output of the US economy.

Such digitized activities which Prof Brian Arthur describes as the ‘Second Economy’in his article published in the McKinsey Quarterly of October 2011 in contrast to the physical economy that we are used to, are replacing huge numbers of middle-class jobs and leaving behind the gains of growth in the hands of a skilled, highly paid elite. Arthur notes that such trend is actually escalating, not reducing.

In fact, the economist Carl Benedikt Frey and Michael Osborne, both of Oxford University, have concluded in their paper entitled, ‘The Future of Employment: How Susceptible Are Jobs to Computerisation?’

That 47 per cent of US jobs are at high risk from automation by 2032.One may thus ask whether the world is not actually shooting itself in the foot by its own quest for radical societal transformation?

It is interesting to note that Switzerland’s concern about the potential impact of automation on jobs became so serious that a group of citizens put up a proposal to be voted on in a referendum that the entire adult Swiss population be paid a monthly unconditional grant equivalent to US$2,500 and 640 to every child in order to fight the resulting poverty and inequality. The federal government and almost all political parties campaigned for rejection of the proposal. The referendum took place on 5 June this year and has been overwhelmingly rejected by Swiss voters.

Digitization and Elimination of Jobs

The reality of the automation environment is now slowly but surely creeping into the developing world as well. For example, books which used to be collected in warehouses and sold in bookshops are now sold and even read on-line disrupting traditional jobs of warehousing and bookshop sellers.

In Tanzania, ATMs are already fast replacing tellers in banks; air tickets are increasingly being booked on-line, airline boarding passes are downloaded on-line and disrupting jobs in travel agencies. Digitization is already in line to replace several jobs in banking and telecommunications industries.

In the developed world,on the other hand, the Internet of Things (IoT) which is the product of convergence of communication, logistics and energy internet platforms, is catapulting what is called the ‘sharing and hybrid’ economies embracing activities being disrupted cutting across the music industry, newspapers, publishing, transport (entry of Uber and Ola, airport checking-in machines), entertainment (film on demand, downloading of music and streaming of film videos), clothes and hospitality industry (entry of Airbnb in connecting apartment and lodging owners for home-sharing) and many other services including complex medical and surgical treatments.

A new business model of sharing is consequently fast entrenching which not only gives rise to what Rifkin describes in a recent book, ‘The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism’, as the trend towards ‘zero marginal cost’ of almost all goods and services provided on-line and thus undermining ‘marginal cost’ system which drives business competitiveness, but also acutely disrupts and eliminates traditional jobs.

My view, as a starting point in this discourse about these various ideas pointing towards the end of work as we know of, is to recognise that we live in the second decade of the third millennium when rapid, vast and momentous changes, largely driven by the power of science and technology breakthroughs, are gripping all societies in equal measure.

Education and Knowledge Response

American social critic, Alvin Toffler in a magisterial book entitled, ‘Power Shift’-Knowledge, Wealth, and Violence at the Edge of the 21st Century (1990) aptly citing Sir Winston Churchill’s famous quip that “the empires of the future shall be empires of the mind” postulated that the world was on the ‘edge of the deepest power shift in human history’.

He posited that the shift was knowledge based and driven. His key point is that unlike the powers that drove colonialism, imperialism and now an unruly globalisation, knowledge, in contrast, has become ‘the most democratic source of power’. Knowledge is more easily accessible to all and sundry.

Such world has already set on us, globally, and the boundaries of knowledge are expanding exponentially, almost on a daily basis.However, it is a trend that often leaves many countries like Tanzania with a reality of seeingsuch knowledge as a mere mirage.

It was our own Mwalimu Julius Nyerere who, in the Introduction to his first book, ‘Freedom and Unity’, written at the dawn of Tanganyika’s independence, reminded us of how knowledge lay at the heart of our nation’s enduring and progressive political independence and of our stable economic transformation. He wrote: “The choice (before Africa) is not between change or no change; the choice for Africa is between changing or being changed-changing our lives under our own direction, or being changed by the impact of forces outside our control.”

A reality- check shows, unfortunately, that Tanzania and much of Africa in fact remain unreasonably impacted by external factors of change because of their own failure to take effective control of their development.A new mind-set revolution is thus needed.

Tanzanian Challenges in Education

Tanzanians, for example, suffer from a form of amnesia when it comes to issues revolving around education and knowledge.It is not as if the question of quality and relevance of education has never featured before as a public policy concern.

It has. The enduring problem is lack of timely intervention supported by elaborate scientific analysis and radical rather than palliative, short-term oriented decisions.

What is clear is that the national capacity to change our lives under our control and direction largely depends on quality education; education that is not only broadly available, accessible and affordable, but which is also responsive to the fast changing dynamics nationally, regionally and on a global scale.

It equally follows that Tanzania’s capacity to learn on a continuous basis and to apply new knowledge towards addressing emerging and forecasted challenges of its development as well as to exploit opportunities for furthering human progress and prosperity crucially depend on quality education.

By quality education we have in mind a broad characterisation of education beyond traditional or formal education, loosely termed as ‘schooling’. In the world of employment, education is interrogated within the prism of what is called skilled talent.

This is precisely because the dynamics of development in developed, emerging and developing economies are increasingly shaped by new phases of the industrial revolution in which technological advances are at a premium.

Leadership as Driver for Innovation

The challenge is therefore one of economic policy. Is the Tanzanian education system from kindergarten to primary, secondary schools, post-secondary and vocational able to produce people who meet the skills employers are seeking?

This is an important point for driving investment, both public and private, in the education sector. President Paul Kagame of Rwanda, for example, is leading the strengthening of knowledge creation through government-private sector partnership. And the Kigali Innovation City is being launched this year.

The role of the City in Kagame’s words is to ‘unlock value by better adapting technology to our (Rwanda’s) economic and social context as well as our current and future needs.’Senegal is also building a US$100 million Digital City.

The city will encompass a ‘city of knowledge’ and a science and technology university complex to accommodate 30,000 students. There is much that Tanzania can learn from such developments.

Re-designing Economic Policy in Tanzania

As a developing country still in transition towards the third industrial revolution (the fourth industrial revolution now being harped upon by the developed rich world marked by the role of robots and artificial intelligence is probably somewhat a distant dream for Africans), Tanzania undoubtedly needs to have a clearer economic policy about employment.

For as the late Prof Rajni Kothari aptly posited in his 1977 paper, ‘Redesigning the Development Strategy’, ‘the prime concern of economic policy for a just social order ought to be to generate employment that is able to absorb at least the new additions to the adult population and where there is a substantial backlog of unemployment and underemployment, to absorb that as well.’

Emphasis should be placed on the words, ‘just order’. They have a deeper meaning today than before because of the growing rate of inequalities that are also fast becoming pervasive in Tanzania’s political economy.

Put differently, economic policy should not only address unemployment but also the levels of wages.Even then, Tanzania cannot behave like an ostrich by sinking its head in the sand in the face of what is a fast evolving reality about the steady decline in formal jobs.

Concern must be taken seriously because research undertaken by leading computer scientists like Carl Benedikt Frey and Michael Osborne shows that ‘computerisation will mainly substitute for low-skill and low-wage jobs and high-wage occupations are the least susceptible to computer capital.’

In other words, the trend for a country like Tanzania with huge chunks of low skilled workers would be towards heightened and more pronounced inequality.The reality, however, is that we are moving more and more into a technically based economy.

In South Africa, the response of the State and regional governments is the establishment of Schools of Specialisation at regional levels which absorb secondary school leavers.

It is a strategy to address shortage of critical skills and social inequalities by offering students both theory and practical learning covering: maths and science, engineering, ICT, commerce and entrepreneurship, performing and creative arts and sports. This is going beyond traditional vocational training. Tanzania should learn from such examples.

In Tanzania, moreover, the government, the private sector, the trade unions and the society as a whole should fundamentally begin to discuss what kind of society Tanzania should build within an inevitably fast emerging labour reducing environment.

This is important as Tanzania embarks on implementing the Second Five Year Development Plan, 2016/17-2020/21, whose main plank is industrialisation and public investment in infrastructure-hard and soft.

Tanzanians must quiz what kind of industrialisation should be embraced as a priority vis a vis the desire to create rather than eliminate jobs; how should the education system be rethought of, shaped and quickly fixed to align it with current and future developments predicated on absorptions and applications of newer and more complex information, communication, industrial and even bio-medicaltechnologies and, finally, what forms of social safety nets would needto be introduced to ameliorate and mitigate possible job insecurities?

As part of the economic policy, it would also be important to revisit Tanzania’s welfare state system which thrived under Mwalimu Julius Nyerere’s leadership and, in particular, to determine how best the gains of growth driven by technological advances may be more equitably redistributed.