Technology has created more jobs than it has destroyed in the last 140 years

Many modern day people complain that technology is taking people’s jobs and fear that robots may replace them in many fields.

But research shows that it is the opposite. New study by economists shows technology has created more jobs than it’s destroyed. In fact the economists at the consultancy Deloitte have 140 years of data to prove it.

The new research shed new light on the relationship between jobs and the rise of technology by trawling through census data for England and Wales going back to 1871. It suggests that the growth of jobs in the creative, care, tech and business service industries have more than offset the loss of jobs in the agricultural and manufacturing sectors.

The conclusion is certainly encouraging that technology has been a “great job-creating machine”and is rather creating than destroying jobs. Findings by Deloitte such as a fourfold rise in bar staff since the 1950s or a surge in the number of hairdressers this century suggest to the authors that technology has increased spending power, therefore creating new demand and new jobs.

Going back over past jobs figures paints a more balanced picture, say authors Ian Stewart, Debapratim De and Alex Cole.

“The dominant trend is of contracting employment in agriculture and manufacturing being more than offset by rapid growth in the caring, creative, technology and business services sectors,” they write.

“Machines will take on more repetitive and laborious tasks, but seem no closer to eliminating the need for human labour than at any time in the last 150 years.”

The study, shortlisted for the Society of Business Economists’ Rybczynski prize, argues that the debate has been skewed towards the job-destroying effects of technological change, which are more easily observed than than its creative aspects.

The report, which was shortlisted for an economics prize earlier this year, focused on the employment numbers between sectors that have either been hit or helped by technology.

“It’s been very easy to identify where jobs have been destroyed. Job losses generally are very conspicuous, whether it’s a middle manager replaced by software, or checkout staff displaced by auto terminals, whereas job gains harder to identify,” Ian Stewart, a chief economist at Deloitte, and one of the three authors of the report, told CNBC.

The census data also provide an insight into the impact on jobs in a once-large, but now almost forgotten, sector. In 1901, in a population in England and Wales of 32.5 million, 200,000 people were engaged in washing clothes. By 2011, with a population of 56.1 million just 35,000 people worked in the sector.

“A collision of technologies, indoor plumbing, electricity and the affordable automatic washing machine have all but put paid to large laundries and the drudgery of hand-washing,” says the report.

In some sectors – including medicine, education and professional services – technology has raised productivity and employment has risen at the same time, says the report.

“Easy access to information and the accelerating pace of communication have revolutionised most knowledge-based industries,” say the authors. At the same time, rising incomes have raised demand for professional services.

Concluding that “the stock of work in the economy is not fixed”, the report cites the surge in hairdressers as evidence that where one avenue closes in the jobs market, others open.

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About the Author: Akhtar Jamal

Tribune International