ISSN:2229- 6247 Daniele Schiliro | International Journal of Business Management and Economic Research(IJBMER), Vol 14(2),2023, 2108- 2118
Technological Progress and the Future of Work Daniele Schilirò Department of Economics University of Messina dschiliro@unime.it
Abstract This contribution focuses on the impact of technological progress on the long-term growth, its effects on the labor factor, and its influence on the future of work. Technological progress alters the nature of work and society as a whole, but it does not necessarily benefit everyone. The paper emphasizes that technological progress, including the adoption of digital technologies and automation processes, often involves the substitution of machines for labor, which can lead to the displacement of workers. It also acknowledges the existence of counterbalancing forces. Technological progress can also lead to changes in the quality of work, transforming jobs and necessitating the emergence of new tasks, skills, and retraining efforts, along with the creation of new professional roles. Particular attention is devoted to the recent evolution of AI, including generative AI, and its disruptive effect on work. The main argument of this paper is that the disruption caused by digital technologies puts many jobs at risk. However, the most evident effect is not so much that there will be fewer jobs with the introduction of technologies such as AI, but rather that the nature of work will change. Acknowledgment I wish to thank Bruno Sergi for his insightful conversations and helpful comments. The usual disclaimer applies. Keywords: Technological progress, digital technologies, growth, technological unemployment, job displacement, transformation of work, new tasks, future jobs. JEL Classification: O30, O40, J23, J24, M53, M54
INTRODUCTION Economic theory has long examined the relationship between capital and labor, both in terms of the analysis of production, economic growth, and income distribution. Initially, attention was focused on the relation between quantities used of the two production factors, with great emphasis given to the accumulation of capital. However, in the 1950s, the studies of Moses Abramowitz (1956) and Robert Solow (1957) highlighted that technological change constitutes a more important factor in long-term economic growth. Solow (1957) pointed out that the unexplained growth component, or the statistical "residue," must be attributed to technical progress. His analysis revealed how technological innovation helped increase the productivity of both capital and labor. Similarly, Abramowitz (1993) stated that "the major contribution of capital accumulation to nineteenth-century growth was a consequence of technological progress dependent on scale and capital utilization." He explained that "the significant contributions of education and research and development conceal the new intangible capital of technology-driven biases." In the 1980s and later, Paul Romer (1986, 1990), inspired by the theoretical contributions of Joseph Schumpeter, developed the endogenous theory of economic growth. Romer emphasized that the accumulation of knowledge and innovative ideas endogenously explain technological advances and underlie long-term growth. In addition to the relationship between technological progress and long-term growth, the hot topic that has drawn the attention of economists concerns the effects of technological change on work. This paper starts with the premise that technological progress is a crucial factor for long-term growth. Furthermore, it provides an overview of global growth and employment from the 1970s onwards. It then
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