Does innovation cause job losses?

The ILO’s world employment and Social outlook 2017, its sustainable enterprises and jobs was released in October, it showed that the companies were tend to being more productive, creating more jobs and employing more skilled and more number of female workers. 

The WESO 2017 report claims that innovation is a major source of competitiveness for enterprises, as well as a key driver of sustained growth and development and when asked about the thought of job creation and would the innovation destroy jobs for many people? This was their take. ILo believed that there was no simple answer to these questions, and also this was at the core of all the panel discussions around the future work with the idea of what some say as a “jobless future”, they said. The better understanding was clearly needed of how the innovation affected the jobs. The workers and even the firms in order to provide better policy solutions. The last research showed that over the course, tech progress had created more employment than it ever destroyed. It is also true that in recent years, there were many job losses in non-innovative low tech firms. This highlighted the risk of job losses among that low skilled workers especially in the manufacturing sector. Of course the speed threats everyone, the pace and scale of technological changes amplified fears for those workers. But on the other hand, the reports suggest that the innovative firms tend to create more jobs, employed more workers and in particular hired those who were skilled and female workers and could be more productive.

The quality of the Jobs which were being created was the next question. They believed that was certainly more concern in this area too, and the fact that both the labor market benefits and the social benefits of innovation were not evenly distributed. Innovation in fact led to more intense usage of temporary workers in some cases, especially among the female workers. Firms implementing product and process innovation tend to employ more temporary workers than non-innovators by over 75 per cent.

One would most certainly ask of what were the characteristics of firms that innovate to bring about these changes? ILO answered, even though some argue that large firms are more likely to innovate because they benefit from economies of scale our research shows that size (as well as age) have a limited link to firm revolution. Smaller firms might modernize more because they are free from the burden of bureaucracy and they are more likely to be enthusiastic to take risks. Internal resources as well as easier access to external finance and public subsidies also play a role in modernization.

To conclude, governments, workers and employers’ representatives and other stakeholders should reflect together on the type of jobs and skills that will be relevant in the future. More consideration should be given to providing flexible and comprehensive social welfare cover to workers whose work arrangements differ from full-time permanent employment.