Is this time different? How digitalization influences job creation and destruction

Abstract

With the process of digitalization now in full swing, many are wondering how the adoption of new technologies influences job creation and destruction. Much hinges upon the specific tasks that machines take on and how many new tasks are created through the adoption of new digital technologies. Some argue that most tasks that are at risk of automation are those performed by rather low-to medium-skilled employees, while most new tasks that emerge from the adoption of digital technologies complement high-skilled labor. We present evidence derived from representative survey data from Switzerland that is consistent with this view. Specifically, we find that increased investment in digitalization is associated with increased employment of high-skilled workers and reduced employment of low-skilled workers, with a slightly positive net effect. The main effects are almost entirely driven by firms that employ machine-based digital technologies, e.g. robots, 3D printing or the Internet of Things. We do not find any significant employment effects when non-machine-based digital technologies are considered, e.g. ERP, e-commerce or cooperation support systems. impact on jobs seems to be positive (Mastrostefano and Pianta, 2009; Kogan et al., 2017). 1 The crucial, yet unanswered, question is whether this time is different. One way to think about potential job creation and destruction conceptually is to differentiate between tasks that are regularly performed by human beings but could be performed equally well or more efficiently by machines, versus tasks that cannot be substituted by machine work, or new complementary tasks that are created because of machine adoption. Many politicians and employees feel challenged by the ongoing digital revolution because the new technologies behind it often seem to be direct substitutes for tasks that are regularly performed by human beings. Some technologies enable far-reaching changes of established production lines, e.g. through intelligent platform designs that render intermediaries obsolete or shift of tasks from employees to customers. Also, unlike many other technological developments of the past, digitalization is a general-purpose technology, i.e. it can be adopted across a wide range of industries, including the service sector (Brynjolfsson and McAfee, 2016). In a frequently cited study on tasks that are susceptible to automation through digital technologies,

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