The Future of Work – How does technological change affect the labour market?

Technological change has major implications for the labour market (Figure 2.1). It affects the volume of work available, the nature of work, and pay rates for different workers, and it can be very disruptive.

The impacts of technological change can be complex to disentangle, for several reasons. First, more than one impact can occur at once. A single technology could both replace labour and make existing labour more productive within an industry, firm or even with a single job. For example, the introduction of computer programs replaced the manual preparation of spreadsheets by accountants or bookkeepers. However, it increased the demand for spreadsheet-based financial analysis and for people who were able to use the computer programs.

Second, technological change can occur as the result of both consumer and firm decisions and can have second- and third-order effects. For example, the widespread adoption of smartphones by consumers has changed the way firms market their products, process orders and deliver their goods and services. Other technological change has led to the transfer of some tasks from workers to consumers, such as ringing up shopping items at self-service-checkout machines. These have flow-on effects for the tasks that workers carry out, and the sorts of skills that firms look for in employees.

Third, technological change can create tasks “that were never done previously by a human; more work is done, but no human work is displaced”. One recent example is aquaculture image recognition software, which can spot salmon infected with sea lice.

As a result, the full set of labour market and social impacts of technological change are not always obvious.

Chosen excerpts by Job Market Monitor. Read the whole story at Technological change and the future of work: issues paper