Innovation is creating jobs faster than technology destroys them

Innovation is creating jobs faster than technology destroys them

Malaysian entrepreneur, founder and executive chairman of the QI Group Vijay Eswaran explores how technology is creating jobs, as opposed to fuelling a decline.

Since the turn of the century, it has often been said that all the promise of technological progress is set to collide with the rising tide of population growth in the form of many millions of lost jobs on the altar of automation, resulting in a full-blown employment catastrophe – more catastrophic than any economic meltdown we’ve seen before.

This argument, once reserved for futurologists and academics, has seeped into popular consciousness. Elites at Davos, Switzerland, and tabloids alike, fret about the march of the machines, artificial intelligence, and robotics, as we head into a supposedly jobless future.

The “Luddite Fallacy”: a moral panic

Many of these fears stem from a University of Oxford study in 2013. This study made a much-quoted prediction that 47% of jobs in the USA were under threat of automation in the next two decades. Several other recent studies have made yet more drastic prognostications. A 2017 report compiled by McKinsey predicts that as many as 800 million jobs could be lost worldwide to automation by 2030.

This worry is nothing new. We have seen waves of anxiety at technological change ever since the dawn of the industrial revolution in the early 19th century, as machines began to replace skilled human workers for certain types of highly paid jobs. Back then, a group of textile workers violently, and famously, smashed the new machines that made their skills redundant, giving rise to the term “Luddite Fallacy”, describing the thinking that innovation would have lasting harmful effects on employment.

But futurists like Martin Ford and Silicon Valley’s techno-evangelists argue that the technology today is substantially more disruptive and fundamentally different from everything that came before.

A world of work

The world of work certainly has changed a lot since I started out in business in the 1980s. To quote Justin Trudeau’s Davos address, “the pace of change, [especially technological change,] has never been this fast, yet it will never be this slow again.” And for sure, technology is destroying jobs. From supermarket cashiers to postal workers and travel agents, industries and jobs that were considered mainstays barely a decade ago are vanishing rapidly.

But from my vantage point as an entrepreneur with businesses in emerging markets, innovation is already creating jobs more quickly than automation and technology are destroying them. Entirely new industries have emerged in recent years , creating jobs that didn’t exist ten years ago — app developers, YouTube content creators, social media managers and data scientists, to name a few.

Creating the workforce of the future

However, there are two secondary factors often forgotten or misunderstood, which some economists have understood for many years. The first is the knock-on benefits that come with higher productivity. Companies are able to invest more, hire more, produce more, lower prices, and consumers are able to purchase more.

Perhaps more importantly, there are the secondary jobs enabled by technology which would either not exist or are enabled and multiplied by technology. The gig economy pioneered by Uber is a popular example of this.

A lesser known, but perhaps more impactful example is the direct selling industry, which has produced many millions of microentrepreneurs around the world. My direct selling company was an early adopter of e-commerce platforms and our business quickly became one of the most successful networks globally. Technology enabled our network of entrepreneurs to go out and sell products to many more people in remote places, making money for themselves and creating income opportunities for people in countries from Ghana to Indonesia.

It is important to remember that technology isn’t creating jobs: people are. But the opportunities would not exist without technology.

People often look for guidance from policy makers and bureaucrats to save us, to help us navigate this mammoth change. I say the answer lies, as it almost always does, in the entrepreneurial spirit of people. Yes, we need governance, smart regulation, and innovation in education. But governments must learn not to focus on protecting old jobs. First and foremost, we must allow and encourage ordinary people to dream up new businesses.

Vijay Eswaran is a Malaysian entrepreneur, philanthropist and author. He is the founder and Executive Chairman of the QI Group of Companies, a multinational conglomerate with diverse interests including direct selling, education, real estate, retail and hospitality in more than 30 countries. He is also the Chairman of Quest International University in Malaysia.

Vijay Eswaran
Founder and Executive Chairman
QI Group
Tweet @VjayEswaran
http://www.qigroup.com/

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