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    July 2013
    M T W T F S S
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    Why Technology is Driving Even More Radical Change in Society

    Gerald Trites, FCA, CPA

    Technology is good for the economy but not necessarily for people. Whether and why this is true is a subject of debate.

    It is a long established fact, even a truism, that advances in technology change the nature of jobs in the economy, replacing some kinds of jobs and introducing new ones. Of that, there can be no doubt. The introduction of automobiles replaced horses and carriages as the prime means of transportation, thus eliminating most jobs related to the use of horses, such as saddlery, blacksmithing, wagon making, hay farming and – the traditional example – buggy whip making.

    However, it introduced a whole new industry of car manufacturing, design, sales, and service, with assembly line workers in droves, car dealers around the country with salespeople, mechanics and support personnel. The number of jobs made possible by the automobile industry far exceeded the number of jobs in the horse and buggy days.

    But this took time to accomplish. Those who were displaced needed to be retrained and in any cases displaced – mostly from rural areas to the cities. Fortunately many of the assembly line jobs didn’t require much training, so that was an easy task.

    This situation lasted for more than sixty or seventy years, until change again began to sweep the automotive industry, as digital technology crept into the assembly lines, and ousted the people there. It was not uncommon for a line of three or four hundred workers to be replaced by a crew of four or five technicians running the new machines. Nor is the automotive industry unique in this respect.

    The task of re-employing the displaced workers was a little more challenging than the previous displacements, since there weren’t as many new jobs at a low skill level. As a result we have seen a scramble for education and training, with business and industry demanding at least college education or high level skilled tradespeople from the community colleges and tending not to hire low skilled people.

    Some of this scrambling has been misplaced, since the traditional purveyors of education, the universities, have always been slow to change and adapt, in fact in many respects have changed little since the middle ages, and produce people who are not necessarily skilled in the way that businesses need them. And so we see people with elaborate and expensive university degrees doing low skilled jobs such as burger flipping and trying to pay off their student loans. This is a phenomenon of the modern age, but one that we have become sadly used to seeing.

    But this is not the end of the story, in fact, it is only the beginning. The pace of technological change is bursting ahead with blistering speed, following the same trend of displacing existing jobs and creating new ones. But many of the jobs being replaced are skilled ones – analytical and requiring considerable education even at the professional and semi professional level. They are replaced by jobs that also require much education and skill. So the job or retraining has become an onerous task, both for the people displaced and for the system itself.

    The effect of modern technologies means that many of those replaced never recover to the level they had once achieved. Even those who set out on a particular career path find that once they have achieved the requisite training, six or seven years later, they have already become obsolete. They are then faced with another extended period of education and training, or else migrate into the burger flipping realm.

    And so the economy moves on, the level of productivity goes up, even the demand for certain skilled jobs goes up, but the ability of people to adapt to the change cannot keep up with the pace of the technological change. Nowadays, two or three decades will embody a whole series of life altering changes.

    The new technologies around big data, for example, have only been in place for about two years, yet they are revolutionizing the way many organizations do business, making possible initiatives that only a few years ago were just a dream. These can be accomplished with far fewer people than would have been necessary to accomplish the same thing without the technology, while employing a few big data analysts, which by the way is a new skilled job that is going unfilled because of a lack of trained people.

    The resulting evisceration of the middle class and the increased difficulty of youth employment has set the stage for civil discontent, something we would be extremely unwise to ignore.

    In part, the answer may lie in technology, in particular in making education and training available on a much more economical basis that it is at present. The advent of MOOC’s may be one indication of this possibility, where some innovative major universities are offering large scale education for free in online courses.

    But our whole approach to education and training needs to change, not to mention our attitudes towards it. The role played by business needs to change to a much more active one. Government needs to be more creative at finding new ways to fund education, as clearly individuals cannot afford it by themselves and as a society we cannot afford to have our people segregated into a small group of highly educated, skilled and prosperous people with a much larger group of highly skilled and educated people who are chronically unemployed because they were trained for a world that no longer exists – one that changed within the past five years.

    The MONEY® Network