IMPACT AND ADAPTATION TO TECHNOLOGICAL CHANGE AND THE FUTURE OF WORK IN ARGENTINA

IMPACT AND ADAPTATION TO TECHNOLOGICAL CHANGE AND THE FUTURE OF WORK IN ARGENTINA

IMPACT AND ADAPTATION TO TECHNOLOGICAL CHANGE AND THE FUTURE OF WORK IN ARGENTINA

Introduction

In a world that is increasingly competitive and globalized, where major powers get increasingly advantages over those in developing countries, and where the technologies are going to a substitution of labour forces less professionalized it is important to create policies and strategies that lead to a maximization of the adaptive capacities and resilience of the population in the labor market.

The rapid pace at which technology has advanced in the last two decades and the future impact that can generate a world post-Covid has been an acceleration in the changes and the demands own labour markets. These changes will not only have an economic impact on both global and local, but also affect those countries that do not have strategies accordingly to adapt to the new change variants.

The next ten years will be key to the study and the adequacy of policies, objectives and long-term strategies that will allow Argentina to adapt to technological changes, so that the country is prepared for new trends that will invariably impact the economic variables and demographic. In such a way that the economic variables and demographic changes are not affected directly. 

Context

The development of so-called Internet of things (IoT), artificial intelligence and advanced robotics has brought automation and digitalization both in the industry and in the market of services, although in this latter to a lesser extent.

This fourth industrial revolution represents a new paradigm in the development of the work force, as it means a fundamental change in the workforce.

Little by little, technology has been increasingly encompassing the day-to-day businesses, and with it, reinforcing the need for companies to survive in an environment increasingly tecnologizado and more competitive. The need of tecnologizar and automate the various productive sectors in order to achieve greater efficiency and productivity is taking businesses to a constant search for profiles of workforce increasingly skilled in contrast to those jobs that require labor forces less professionalized. In fact, according to the report, Talent Trends Report 2019 of the consulting firm Randstad, it is estimated that 85 percent of jobs that will be for the year 2030 haven't been invented yet.

This digital revolution, and technology is stimulating new forms of production and modifying the same productive structures, leading to changes at both global and local, while amending the labour markets from the root either at the level of employment such as wages and the ability to occupational different jobs.

In front of these features is important to understand the effects of both negative and positive that these innovations will have on the social structure and labour of Argentina over the next decade and beyond, taking into account the local context.

Some authors, such as Nubler (2016) argue that this new digital ecosystem that is already being driven from the end of the TWENTIETH century has had as the epicentre of the Information Technologies and Communication can generate an earthquake in the structures of both demographic and economic, since this is a deviation that is critical of the historical patterns of change in techno-economic and the speed in which these influence the shape of the organization of both production and consumption of goods and services. 

On the other hand, several authors (Romer, 1986 and Lucas 1988) believe that these changes can bring with them a window of opportunity for the creation of new job offers in the less developed countries.

Unlike the previous industrial revolutions that resulted in an automation of the automotive industry and manufacturing, which affected a large extent to the employee unless paid, this change has the ability to affect those jobs, well-paid jobs or more professionalised, as well as those that require tasks more manuals. For Rodríguez (2017) there are three structural factors that explain these phenomena. The first has to do with the increasingly aging of the population in most developed countries and in emerging countries. The second has to do with the fragmentation own production processes prompted by the globalization and which require increasing goods and services intermediate for the production of global supplies. And, last but not least, you have to see how the exponential increase and the huge gap that has been in the last years with regard to computing, whether in the storage (Big Data) as well as in the processing of data.

The reality is that these new technologies are forever changing models of work and because of that also the demands in different jobs. We are seeing new forms of employment unthinkable little more than a decade thanks to the use of new technologies and thus there arise certain questions about the adaptability of workers and the economies in developing accompany these changes through the implementation of policies that promote the sustainable development of new forms of employment and the development of education in the new generations.

Fourth Industrial Revolution: the production process of Big Data

There are not a few analysts and authors who argue that the adoption of digital technology in the field of the industry has created a tipping point such that it is necessary to address the new processes of production as a schism in the labour market.

This revolution, also called Industry 4.0 is based on the progressive adoption of new technologies in order to automate almost completely the productive processes of manufacturing. Don't we just talk about the advanced robotics, which already has been used since the decade of the 70's, with the model of industrial production driven by Toyota (toyotismo) but rather by the use of an additive manufacturing-based robotics, the tools of production planning, artificial intelligence, virtual reality, gamification, simulation of processes, IoT, key Enabling Technologies (KETs) and of course, Big Data.

This new form of industrialization hyper-interconnected proposed to integrate the physical aspect of the production with the virtual world where the machines and manufacturers will share the information of the processes and the supply chain, allowing for automation and auto-configuration of the mechanical manufacturing, thanks to the virtues of artificial intelligence.

This jump represents a change of paradigm and also the need of systems and infrastructure is able to handle all traffic of information, as well as systems and completely new services.

With the emergence of the phenomenon of Big Data, that is to say the mass processing of data for computer applications complex, in addition to the so-called “cloud” allows you to safeguard and process data remotely, allowing you to expand the fragmentation of the productive forces, and thus bring about changes in the productive environment. This helps to control in the whole manufacturing process as well as marketing. In turn helps to improve the efficiency and lowering costs in the production, as the companies can improve the processes of localization of production and as well to be located in places with cheaper labor.

This has been what is considered a game changer in terms of the way that emerging new forms in the so-called string values by modifying substantially the production process, as well as the labour market as the need arises to accommodate the labour force to certain areas more professionalized in front of the less technical background.

The effects of these new technologies do not only influence the workplace per se, but that they also have their influence on migration flows. This is due to 2 factors. On the one hand, those less-skilled workers, which only perform manual tasks or routines are displaced by technology generating a migration to countries where they can get to get new chances to enter the labour market. And on the other hand, the most qualified workers, who perform tasks less routine and more professionalized tend to have more opportunities to emigrate to more developed countries where this type of work is very demanding. 

On the other hand, and as has been seen due to the pandemic of COVID-19, thanks to new technology, has accelerated the use of remote work, that is to say, to be able to work remotely for companies located miles away from the home, even in other country or continent. This causes a part of the workforce with jobs more qualified you do not have the need to migrate to other markets.

With the progress of artificial intelligence, which allows you to make processes more and more advanced so entirely automatic, processing information from rules and behaviors, it is possible to generate, diagnose and decide the most appropriate action to explanations of certain situations imitating and emulating certain cognitive processes of human behavior. Although AI is still in an elementary stage, it is possible that with the advancement increasingly large-scale and can replace large areas of the labour market, as are the analysis of data and the manner in which you sell goods and services. 

Countries such as Germany have been precursors to generate strategies and policies in pursuit of moving towards this new industrial revolution. Have opted to adapt the industrial fabric and prepare for the transformation to the digital industry. The systems of modern manufacturing are connected vertically, allowing you to manage the business process in real-time and at the same time, be subject to information networks without any kind of intermediary. This process has also been found with some problems to implement because they require a network engineer much more sophisticated as you need for a standardization and organization of work, as well as the availability of the products. Other countries that are also accelerating its internal process of industrialization are united States, China, Japan, and France to name a few.

Effects on occupation and employment

This bottom-up process of the technological power over the human factor leads us to think about the effects on the occupation and employment. Some authors, such as Romer (1986) believe that the technological evolution represents a challenge due to the heterogeneity own countries and, therefore, will depend on how advanced your technology system to not be affected in the economic aspect. 

In other words, the developing countries will have limitations when developing new types of technologies due to several factors among which are the high costs to generate flows of investments, acquisition of scientific and technical knowledge that allows them to compete with those in more developed countries and also to invest in the processes of trial and error. In addition, we must add to this the externalities characteristic of each territory, as well as the life cycles of technologies that add new entry barriers that may limit the development of technology.

Acemoglu (2011) explains that those routine tasks, and have little impact can be easily modified and replaced by the technology. So posits that those jobs that require lower cognitive abilities are key to understanding the future of the industrial transformation that is going on. You will have to take into account the various sectors that affect this change in the habits of the labour market but that does not seem to be at issue is how the power of computers is gaining ever more prominence increasingly replacing the occupation of some workers (Brynjolfsson and McAfee, 2014).

However, along the different industrial revolutions and with the advance of technology, the economies of both the global and the local have been adapting to the demand prevailing in their time. Several authors believe will be of vital importance to the role of the market of goods and services to generate employment to those that have migrated to the mechanical work.

For the World Bank (2016), two-thirds of the overall work, employees today are susceptible to technological changes, so it is expected that they can be replaced and automated. This does not mean that there is a window of possibility. Authors such as Apella and Zunino (2017) predict that these changes can generate an improvement in the levels of well-being of the population, and even reduce inequality if and when the authorities establish strategies, public policies and institutional reforms that allow them to conjure up the technology with education to stimulate an improvement in the skills of the new generations.

Frey and Osborne (2013) theorize that, in the united States, around 47% of jobs have a high possibility of being replaced, while only 33% have a low chance to be. The authors focus their attention on two visions of technological change. On the one hand, it takes into account the automation of tasks and the digital intelligence, and the other of mobile robotics. In this sense, warn that the domestic services, sales, construction, manufacturing, transportation, and administration will be the economic sectors most affected by the technological change, although it is true that the most profound change will be cross-sectoral. That is, within the same occupation, the replacement will be uneven depending on the tasks assigned.

Another factor to keep in mind is the lethargy of technology that would allow the replacement of forces of labour is gradual and long-term since the adoption of new technologies is also a cost in the short term that may not be profitable in the near future.

A fact not a minor is related to the polarization of the labor forces. You are viewing a phenomenon in both developed countries with what is on the way to be, and it has to do with the increase in employment in areas most qualified, but at the same time, it increases the proportion of jobs for low-skilled, generating a tendency polarizing (World Bank, 2016). In this sense, the jobs that require forces middle has been shrinking more and more.

In this sense, computers are not intelligent enough to replace those jobs that require cognitive activities in complex and non-routine.

One of the problems faced by the least developed countries as Argentina has to do with the informal work. In this regard, the technological change in the productive sector has generated changes in this context because many times we look for a greater working flexibility which change the length of the working day, as well as generate instability in the jobs and recruitment (ILO, 2018).

Given this situation, the ILO provides that those framed within the informal employment are at greater risk of being excluded because of their employment status is not covered or protected. Proposes that societies and governments to adapt quickly to the impact that will have these new trends.

Argentina and the future of work

In relation to our country, the consulting firm Accenture conducted a study on the transformations of the labor scene from 2015 to 2030, focusing on the implications that will have technology disruption in employment opportunities. On its methodology, we analyzed eight types of characteristics skills (leadership, coordination, social intelligence, creativity, analytical skills, sensory perception, and skills, transactional, and repair of manual strength) and conducted a survey to find out the level of automation that will have the jobs (ILO, 2018).

In this way, the results are presented in two scenarios simulated. In the first, it was a competition between workers and technology to find places on the market, and in the second, workers are adapted to the technological changes, and their activities related to it. It was estimated that in the private sector will create a 36% of jobs related to technology (especially in the fields of mathematics, engineering, science and technology), while 37% can be automated completely, irrespective of the workers. In this way, the impact of technological change will require the transformation of many tasks that currently make up the same occupation. In parallel, the study added that it could do a greater number of women in work related to the digital age, noting that technological change could promote gender equality (ILO, 2018).

Several studies warn that the evolutionary models emphasize technological change “as an engine of structural change and as a source of international specialization”. Economies that are able to adapt to these changes in turn transform its sectoral structure, with short-term effects in the occupations and in employment (ILO, 2018).

Mariela Molina, Natalia Benitez and Christoph Ernst (ILO, 2018) addressed the possible impact of technological change on the dynamics of occupation and employment within the industrial fabric of the argentine, projecting trends in the short term, taking as a reference the National Survey of Employment Dynamics and Innovation published in 2015 by the ministries of Labour and Science and Technology. We analyzed specifically the dynamics of creation, destruction and conversion of employment, as well as the innovative behavior (i.e., that have carried out R & D activities, technological transfer, acquisition of machinery and equipment, among others), between 2010 and 2012 of approximately 3600, national companies, and the impacts that they have had the innovations on employment in terms of the requirements of qualification of the workers and the strategies adopted by the companies.

Between its results and conclusions, highlight, first, the technological change “is disruptive” to the occupational structure of the argentine industry. In the second place, the short-term is positive for sectors where innovations, growing employment in companies that undertake these activities. In line with this, we observed that employment grew up on the companies that made innovations and/or turned their occupational structure; being affected employment in those companies that do not have innovated. In the third place, the jobs that require higher qualification operational are the most rose against the posts are not qualified, supporting the hypothesis of the existing trends in the occupational changes, although in our country is still the second group has a majority participation in occupations. Occupations that are benefiting are those performed by scientists, intellectuals and technical professionals, mid-level, emphasizing that workers with higher cognitive levels have more opportunities to fill jobs; although still a good number of operators of facilities and equipment with levels of cognitive medium-low. Jobs harmed correspond to elementary occupations and primary activities (such as agriculture), low-level cognitive, who suffer more replacements for automation to technological advances. Finally, considering the productive sectors, those associated with engineering and automotive industries, which employ professional scientists) are those that lead to the creation of employment, followed by those sectors of labor intensive, which have destroyed old jobs and replacing them with new occupations; the sectors most affected with the dynamic occupational future are those related to the exploitation of natural resources (ILO, 2018).

BIBLIOGRAPHY

● Accenture (2015). The future of work in Argentina: in the digital age, the human makes the difference.

● Acemoglu, Daron and Author, David (2011). Skills, Tasks and Technologies: Implications for Employment and Earnings. Handbook of Labor Economics, Vol. 4, Amsterdam, Elsevier. Retrieved from: https://economics.mit.edu/files/7006 

● Apella, Ignacio and Zunino, Gonzalo (2017). Technological change and the labor market in Argentina and Uruguay. An analysis from the perspective of tasks. World Bank. Retrieved from: https://documents1.worldbank.org/curated/en/940501496692186828/pdf/115685-NWP-SPANISH-P161571-ApellaZuninoCambiotecnologico.pdf

● World Bank (2016). World Development report 2016: Digital Dividends. Overview. Washington D. C., World Bank. Retrieved from: https://documents1.worldbank.org/curated/en/658821468186546535/pdf/102724-WDR-WDR2016Overview-SPANISH-WebResBox-394840B-OUO-9.pdf

● Brynjolfsson, Erik and McAfee, Andrew (2011). Race Against the Machines: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy. Boston, Digital Frontier Press. Retrieved from:   http://b1ca250e5ed661ccf2f1-da4c182123f5956a3d22aa43eb816232.r10.cf1.rackcdn.com/contentItem-5422867-40675649-ew37tmdujwhnj-or.pdf

● CIC Consulting Informatica (16 January 2017). Industry 4.0, the fourth industrial revolution and the operational intelligence. Retrieved from: https://www.cic.es/industria-40-revolucion-industrial/

● Frey, Carl, and Osborne, Michael (2013). The Future of Employment: How Susceptible are Jobs to Computerization? University Of Oxford. Retrieved from: https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf

● Lucas Jr., Robert E. (1988). On the mechanics of economic development. Journal of Monetary Economics, 1988, vol 22. Retrieved from: http://www.parisschoolofeconomics.eu/docs/darcillon-thibault/lucasmechanicseconomicgrowth.pdf

● Molina, Mariela; Benítez, Natalia and Ernst, Christoph (ILO, 2018). Technological and workplace changes. Its implications on the labour market of Argentina. International Labour organization (ILO). Retrieved from:   https://www.ilo.org/wcmsp5/groups/public/—americas/—ro-lima/—ilo-buenos_aires/documents/publication/wcms_635947.pdf  

● Nübler, Irmgard (2016). New technologies: a jobless future or golden age of job creation? Geneva, ILO, Research Department, briefing Note N° 3. Retrieved from: https://www.ilo.org/wcmsp5/groups/public/—dgreports/—inst/documents/publication/wcms_544189.pdf

● Randstad (2019). 2019 Talent Trends Report. Retrieved from: https://content.randstadsourceright.com/hubfs/Global%20campaign/TTR/2019/report/Randstad-Sourceright-2019-Talent-Trends-Report-190118.pdf 

● Rodríguez, Juan Manuel (2017). Technological change, its impact on the job market and challenges for labour market policies. ECLAC. Retrieved from: https://repositorio.cepal.org/bitstream/handle/11362/42612/S1700870_es.pdf?sequence=1&isAllowed=y● Romer, Paul M. (1986). Increasing Returns and Long Run Growth. Journal of Political Economy, No. 94. Retrieved from: https://www.jstor.org/stable/1833190