The objective of this paper is to examine the impact of information and communication technologies on employment. Recently there have been increasing concerns over how the accelerating development of artificial intelligence and automation will affect jobs. Given this setting we specifically wish to answer the following questions: What are the economic and political factors that may lead to the elimination of jobs through ICTs and automation? Are new jobs being created better and is the turnover to new jobs fast enough to Shumpeter’s creative destruction? Are public policies required to address this problem? If so, which policies? In this paper relies on existing research to determine give us some insights about such debate. The paper concludes with policy recommendations.

1. TECHNO-
UNEMPLOYMENTMartha Garcia-Murillo
Ian MacInnes
Johannes Bauer

2. SUPPLY
(Technology,
outsourcing)
DEMAND
(populationgrowth,
marketing,net
exports)
SUPPLYDEMAND

3. COST
REDUCTION
TECHNOLOGI
ES
Automation,
robotics
SUPPLY
(Technology,
outsourcing)
DEMAND
(populationgrowth,
marketing,net
exports)

4. COST
REDUCTION
TECHNOLOGI
ES
ICT, Internet
SUPPLY
(Technology,
outsourcing)
DEMAND
(populationgrowth,
marketing,net
exports)

5. COST
REDUCTION
TECHNOLOGI
ES
ICT, Internet
Automation,
robotics
SUPPLY
(Technology,
outsourcing)
EXISTING
INDUSTRIES
DEMAND
(populationgrowth,
marketing,net
exports)

6. COST
REDUCTION
TECHNOLOGI
ES
Delayed
substitutes
(slow decline)
Adjustment
-
ICT, Internet
Automation,
robotics
IT and high skill
jobs
SUPPLY
(Technology,
outsourcing)
EXISTING
INDUSTRIES
NEW
INDUSTRIES
DEMAND
(populationgrowth,
marketing,net
exports)

7. COST
REDUCTION
TECHNOLOGI
ES
ICT, Internet
Automation,
robotics
SUPPLY
(Technology,
outsourcing)
NEW
INDUSTRIES
DEMAND
(populationgrowth,
marketing,net
exports)

8. IT and high skill
jobs
SUPPLY
(Technology,
outsourcing)
NEW
INDUSTRIES
DEMAND
(populationgrowth,
marketing,net
exports)

9. COST
REDUCTION
TECHNOLOGI
ES
Instant substitutes
(rapid decline)
ICT, Internet
Automation,
robotics
SUPPLY
(Technology,
outsourcing)
EXISTING
INDUSTRIES
DEMAND
(populationgrowth,
marketing,net
exports)

10. COST
REDUCTION
TECHNOLOGI
ES
Delayed
substitutes
(slow decline)
Instant substitutes
(rapid decline)
Adjustment
Unemployment/
Underemployment-
ICT, Internet
Automation,
robotics
IT and high skill
jobs
SUPPLY
(Technology,
outsourcing)
EXISTING
INDUSTRIES
NEW
INDUSTRIES
DEMAND
(populationgrowth,
marketing,net
exports)
Human behavior
Government
policies
(education/trainin
g, income
distribution),

11. ROLE OF GOVERNMENT
History of technological advance
 overall employment
 But this time could be different (middle skills, extent of disruption)
 Income distribution
 Winner take all markets (Frank and Cook, 2010)
 Compensation divergent from apparent value of the product of labor
 Minor differences in skill and algorithms
 Acceleration of a trend in stagnation and decline of low and middle incomes
 Technological advance benefits society as a whole but the disruption often hurts individuals
 Potential for decline of mass markets (Ford, 2009)
 Freelancing brings inconsistent income

12. ROLE OF GOVERNMENT
 Solutions?
 Retraining/education insufficient
 Side payments: redistribution of wealth
 Just: small differences in winner take all markets
 Necessary: decline of mass markets could collapse economy hurting the rich also
 Transforming the welfare state
 Basic subsistence income
 Replace the patchwork of means tested programs (and related bureaucracy)
 Avoid perverse incentives and graduation problems (100%+ effective tax rates)
 Reduces risk of entrepreneurial activity/freelancing
 Need for experimentation
 Job sharing
 Minimum wage
 Ownership stake

13. CONCLUSIONS
Globalization is exerting competitive pressure to:
 Introduce cost savings technologies
 Introduce new technologies for differentiation purposes
Supply factors are putting downward pressure on employment
 Some technologies provide time for adaptation
 Some technologies have an instantaneous effect on employment
Industries are generating STEM related jobs but the number of STEM jobs is
most likely insufficient to absorb layoffs
Government policies will need to be put in place for address the short term
and possible long term negative effects