Transformation of work with Information Technology

Week 8 – The Transformation
of Work in the Information
Age
•Manuel Castells. 2000. (2nd
ed.). The Rise of the
Network Society. Volume 1 of The Information Age:
Economy, Society and Culture. Blackwell. pp. 216-354
•Frank Levy and Richard Murnane. 2004. The New
Division of Labor: How Computers are Creating the
Next Job Market. Princeton University Press. pp. 1-54

Introduction
 This presentation is on
 Transformation of work and employment
 1920-70, 1970 and beyond
 All analysis based on data of Advanced Capitalist Countries:
the G7
 Evaluation period is 1920-2007

The Transformation of Work and Employment
 Manuel Castells, tries to address following:
 Secular transformation of employment structure
 Emergence of Global Labor
 Impact of IT, widespread fear of jobless society
 Impact on social structure with emergence of the
Information paradigm.

 Classical theory of post-industrialism
 Source of productivity and growth lies in
generation of knowledge
 Demise of agricultural and manufacturing
employment
 New social structure based on importance of
managerial, professional and technical
occupations

 Proposed criterion for post-industrialism
 Distinction not to be done on base of source,
rather should be on form of knowledge based
production.
 Services sector increased, however manufacturing
sector did not decline as predicted.
 Growth may be small, however low end or
unskilled jobs continue to represent a significant
number in post-industrial occupational structure.

 The transformation of employment structure
1920-70, 1970-90
 Post-agricultural (1920-70) – Increase in
employment in transformative activities. True for
all G7.
 Post-industrial (1970-90) – Decrease in
manufacturing employment, however depression
was uneven.
 De-industrialization rate: rapid in US, UK and Italy. Moderate in Japan and
Germany. Intermediate in France and Canada.

 The transformation of employment structure
1920-70, 1970-90
 Agriculture  {Manufacturing and Services}

 Services industry
 Types
 Producer services – information provider, support productivity
 Social services – health, hospitals
 Distributive services – transporation, communication
 Personal services – eating and drinking places
 Findings
 Increased for all G7 countries
 US: Pioneered
 Japan: Increased, however rate was moderate

 Paths of growth post-industrial (after 1970)
 Rapid phasing out of manufacturing services,
increase in producer services (in rate) and social
services (in size)
 Integrating manufacturing and producer, cautious
increase in social services and maintaining
distributive services. e.g. Japan (greater
agricultural and retail), Germany (higher
manufacturing employment)

 Quicker destruction of manufacturing jobs,
instead of a gradual phasing out, does not
mean more advanced.
 Rather the rate of decline of manufacturing
services depends on policies and strategies
followed, which in turn are based on cultural,
social and political backdrop.

 The new occupational structure
 Diverse path (US {new . minus. old)}, Japan {old
.coexist. new}) , however trend toward increase in
informational occupations is common.
 Polarization of occupation structure = FALSE
 Rate of change of jobs at top and bottom is different.

 Employment projections for 21st
century:
 agriculture phased out;
 steady decline in manufacturing employment;
 increase in services sector;
 producer + social services on rise

Sectoral employment shares (%) in the world, 1997 - 2007
Source: ILO, Global Employment Trends Model, November 2007

 Is there a Global Labor Force?
 Yes, individuals in innovative R&D, research
scholars, cutting technology, financial
management and services form global labor force.
 Indicators: keep high profile / non-repetitive,
innovative task, outsource others for cheaper labor ,
sub-contracting, temporary labor, automate,…
(downsize firm size)

Source : US Bureau of the Census. (
http://www.census.gov/population/www/socdemo/foreign/STP-159-2000tl.html)
Foriegn Born US
Population
Foreign Born US Population (before 1970 and 1970:2000)

 The Work Process in the Informational
Paradigm
 work and labor model is messy, not a neat
(technological change + industrial relations
policy + social action)
 e.g. Automation demands human brain in work
process, however later computers turn human into
second order robots.

Paradigm
 With informational technology
 more employee participation – mainframe to PC (phases
in office automation)
 increased productivity, and quality product
 better feedback in production process

Paradigm
 Professional job polarization (low skilled, high skilled
clerical and highly specialized task)
 Women participation
 Multi skilling and more responsibility. (Job titles such as
Assistant Manager.)

 The Effects of Information Technology on
Employment: Toward a Jobless Society?
 Unemployment as predicted did not occur
 Employment growth positive in all regions
namely US, Japan and Europe
 Global Employment Trends (1997-2007) by ILO,
later in presentation. (Click here)

Summary
 New jobs created, old jobs depressed, however on
quantitative analysis (Job created .minus. Job
lost) varied from region to region, due to several
other factors such as government policies.

 Work and Information Divide: Flex-timers
 Working time: flex, means unconstrained by tradition 35-
40 hours per week
 Job stability: no commitment to future employment
 Location: large concentration at work place, however
increase in proportion of outside workplace
 Employer and employee contracts: less commitment than
traditional contract.
Trends:
More freedom, self employment, and temporary help on the rise.

 Status of Employment Shares in total employment, 2007 in all
regions (%)

 Work and Information Divide: Flex-timers
 US model to deal with labor shortage
 Non-traditional incentive such as stock options.
 Use of immigrant labor in both highly skilled and unskilled
occupations
 Temporary of JIT labor.
 What model Europe practiced
 Dutch model: moderate wage increase however preserve core
jobs in the industry.
 Expansion to temporary, part-time and other flexible forms of
employment.

 Information Technology and the
Restructuring of Capital-Labor Relation:
Social Dualism or Fragmented Societies?
 Productivity and profitability (↑)
 Labor protection (↓)

 Information Technology and the
Restructuring of Capital-Labor Relation:
Social Dualism or Fragmented Societies?
 Occupational Structure
 Top and Bottom layer (↑)
 Middle layer (↓), rate of decline varied from country
to country. It is dependent on political climate and
position in global competition.

 Summary
 New social structure
 Disjoint labor
 Rise of individualism
 Showing up of network society

New Divisions of Labor
 Adhoc committee miscalculation.
 Expectation : computers will replicate all models
by which human process information. {Statement was
partly correct}
 Fact: Major upheaval in nature of work, not mass
unemployment.

 “divisions of labor” words by Adam Smith,
new meaning in computer age
 Division of labor between computers and humans
 Growing division within human labor
 Can or cannot do valued work in computers world
 The two above has created the divide.

 To bridge the divide
 Rethink training and education
 Identify who (computer vis a vis humans) is good
at what?
 Identify well paid work in now and in future
 How people can learn the new skills in the
computerized world.

 How work has changed
 Computerization new jobs and destroyed old.
 Depression: clerical and blue collar jobs
 Growth:
 cafeteria workers, security guards {held by working poor}
 and managers, doctors, lawyers, engineers etc. {held by
upper part}

Traits: higher pay, extensive skills, use of computers to
increase productivity.

 How work has changed
Summary:
 Upper and Lower (↑) – Intermediaries (↓)

Why People Still Matter
 11.Nov.1999 Liffe closed, now Euronext.
 Euronext – digital, many other exchanges joined.
 September 2001, Dr. Stephen Saltz used
computers for better diagnostics.
 Computerization
 Replaced Traders, however could only
complement Doctor’s diagnostic skills.

 Rules – step by step : computerized
 e.g. Rail Ticketing, Flight enquiry
 Pattern – solving new problem referring an
old existing pattern : not computerized.
 Perception : difficult to program
 Interpreting what is perceived: even human differs

Can computers substitute humans in all jobs
 No, its not easy. However computers can
complement humans by providing large
information at low cost.
 Example: echocardiograph

How Computers Change Work and Pay
 Boeing – Use of CATIA, CNC
 Dispersed manufacturing, low cost production and
new foreign customers

 What characterizes use of a new computer
application
 Adopt computer, gain a particular competitive
advantage
 Recognize computer potential, reorganize work
 Create new jobs and destroy old jobs

 Computerization: Employment or Unemployment ?
 With reference to Herbert Simon’s 1960 essay
 Humans and computers both will be used, however in
areas of their respective comparative advantage.
 More output, low cost, higher income, more
customers
 bestUse (Humans, Computers) = Mass employment

 Economy’s job mix in computer’s world
 Two schools of thought
 Computers – low skilled jobs, Humans – move to high
skilled jobs
 Computers – high skilled jobs, Humans – forced to
menial jobs

Predictions by Herbert Simon, in his essay
 Blue-collar workers – (↓)
 Machine maintenance workers – (↑)
 Clerical workers – (↓)
 Salespeople – (↑)
 Managers – (↑)

Source : News Bureau of Labor Statistics, United States Department of Labor.
Released: Tuesday, December 4, 2007
Top 10 industries with largest wage and salary employment growth, 2006 - 2016

 Workers skills and New Nature of Work
 Expert thinking – no rule based solution;
Humans, computers will only complement
 Complex communication – interacting with other
humans; humans only
 Routine manual/cognitive tasks – rule based;
candidate for computerization
 Non routine manual tasks – involving optical and
fine muscle control; human

 Summary
 Constant drive to develop, produce, and market
new products depends on
 Humans ability to manage and solve analytical
problems and communicate new information.
Above keeps Expert Thinking and Complex
Communication in strong demand.
Web link for slides:
“http://www.slideshare.net/itsmeritesh/tags/esit” [last
accessed on November 30, 2008]

References
 ILO, Global employment trends: January
2008.
 Home page: (http://www.ilo.org/global/lang--en/index.htm)
 Bureau of Labor Statistics, United States
Department of Labor.
 Home page: (http://www.bls.gov/)
 US Bureau of the Census
 Home page: (http://www.census.gov/)

Transformation of work with Information Technology

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