Technology is splitting the job market
Some people are prospering, while others are left behind
By Raghuram Rajan – Soon, the smartphone may be replaced by a device implanted in our body that connects with our mind and provides instant access to both computing power and enormous databases. Computer-enhanced humans are no longer the realm of science fiction. The information and communications technology (ICT) revolution has fundamentally changed what we spend time on, how we interact with one another, what work we do and where we do it, and even how people commit crime.
Most importantly, it has upset the balance between the three pillars—the state, markets, and the community.
The ICT revolution has not just followed the course of previous revolutions by displacing jobs through automation; it has also made it possible to produce anywhere and sell anywhere to a greater degree than ever before. By unifying markets further, it has increased the degree of cross-border competition, first in manufacturing and now in services. Successful producers have been able to grow much larger by making where it is most efficient. This has created spectacular winners, but also many losers.
The technology-assisted market has had widely varying effects across productive sectors in a country. Some of the effects stem naturally from technological change, and some stem from the reactions of people and companies to it. Indisputably, it has raised the premium on human capabilities. As a result, some well-educated communities in big cities have prospered, while communities with moderately (typically high-school-) educated workers in semirural areas dominated by manufacturing often have not.
More generally, as with past technological revolutions, the need for people to adapt has come rapidly, before the benefits have spread widely. Indeed, the communities that are required to adapt the most, as always, are the communities that have been experiencing the greatest adversity, and have the least resources to cope. more>
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