Share

Is the future of work happening now?

Principal Advisor, Productivity Commission
20 May 2019

Many people worry about the impact of new and emerging technologies like robots and artificial intelligence on the number and quality of jobs. But we tend to overlook how frequently the labour market changes in the ordinary course of events, and the role that technology plays in this change.

We can see these developments in a couple of examples. Take bookstores. Reliable numbers are hard to come by, but available statistics suggest that New Zealanders are big consumers of books. For example,

  • Nielsen data says that New Zealanders buy almost five million books a year.
  • The Book Council’s most recent survey of reading patterns reported that New Zealanders read an average of 35 books a year.

Despite this, the number of people employed in newspaper and book retailing fell by more than half between 2000 and 2018, and the number of bookstores dropped by a larger proportion. What accounts for this?

Part of the decline could be down to economic circumstances. A recession linked to the Global Financial Crisis occurred in the middle of this period, and could have discouraged people from making discretionary purchases. However, bookstore and staff numbers continued to fall once the economy picked up.

A bigger factor is technology. Services such as Kindle and Kobo allow people to replace physical books with electronic versions that can be ordered anywhere (provided you have a reader or app) and received almost instantaneously.

And Amazon and Book Depository have challenged local retailers with a wider range of books and lower prices. Book Depository reported in 2018 that orders of books to New Zealand had increased by 45 percent in three years.

Number of newspapers and book retailers and employees in New Zealand, 2000-2018

Book retailers

The New Zealand experience is not unique. A 2013 research paper noted that online sales of books “accounted for 44 percent of all U.S. book sales in 2012, with e-books accounting for 11 percent of total book sales”.

Of course, technology doesn’t just replace jobs; it also creates them. One of the more dramatic local examples is computer system design services. As New Zealand firms have made more use of information technology, they’ve needed more help setting up and maintaining computer systems. This has led to an explosion in the sector, with employee numbers increasing by almost 200% since 2000 and reaching 32,000 in 2018.

Firms and employees in the computer system design and related services sector

Is the future of work 2

What to take out of all this?

First, change is a constant feature of the labour market. As new technologies spread, some sectors decline and others expand. Making sure that government policies support people to make smooth career transitions matters now, as well as in the future.

Second, the pace of change is an important variable. If technologies emerge and spread faster, job and career changes could be a more frequent occurrence for many New Zealanders, and we might need different policies to support them. These are some of the matters the Commission is exploring through its Issues paper and scenarios.

Read more

Have your say

Please tick the box to prove you're a human and help us stop spam.

Comments

  • Gravatar for Nik

    Nik 12 Jun 2019, 13:37 (5 months ago)

    Thanks for your comments Greg

    We may very well need different policies over time if the direction of technological change varies over time. As for the matter of whether the direction of technologically-induced change in skill demand will remain the same in future, that's an issue we are currently exploring and will have to come to a view on. There are good reasons for coming to the view you have....but there are also interesting developments in some areas of artificial intelligence that could easily make someone think otherwise!

    Please tick the box to prove you're a human and help us stop spam.
  • Gravatar for Greg van Paassen

    Greg van Paassen 8 Jun 2019, 22:36 (5 months ago)

    Re: "Second, the pace of change is an important variable. If technologies emerge and spread faster, job and career changes could be a more frequent occurrence for many New Zealanders, and we might need different policies to support them."

    I don't think this is quite right. If the *direction* of technological change--more precisely, its effect on the demand for particular skill sets--varies over time, we might need different policies over time as well.

    But if the direction of tech. change stays the same, then we may need to ramp up or down the funding for execution of the policies according to the pace of change, but we would not need to change the policies themselves, at least in broad outline.

    The direction of technologically-induced change in skill demand has been the same for over 200 years: away from muscle-powered simple manipulation and transport of physical materials and objects, and simple collection and transformation of data about things, and towards the skills needed for complex, people-oriented, communicating services.

    The technologies in the offing, with a couple of possible minor exceptions, seem likely to continue the trend, as they primarily substitute for yet more thing-oriented work.

    (Actually I don't believe we should need to vary funding much, because suitable policies--teaching communication and executive function skills, for example--seem likely to enhance household well-being and productivity in any scenario, so we should go hard with them.)

    Please tick the box to prove you're a human and help us stop spam.
  • Gravatar for Greg van Paassen

    Greg van Paassen 8 Jun 2019, 21:33 (5 months ago)

    Re: "This has led to an explosion in the sector, with employee numbers increasing by almost 200% since 2000 and reaching 32,000 in 2018."

    For context, in 2000 there were about 1.8 million employed people in the country, and in 2018, about 2.65 million. So this "explosion" represents an increase of about 0.45% of the workforce, from 0.55% to just over 1%.

    Not nothing, but not much, either.

    Especially given the rise of wireless technologies for human-to-human and machine-to-machine communication in that time, and the rise of social media.

    Please tick the box to prove you're a human and help us stop spam.

RSS feed for comments on this page | RSS feed for all comments