The Future of the Economy and the World of Work?


A Personal View.

Writing about the future is always a challenge especially when the topic is about the economy and work so inevitably this article will raise more questions than answers  – this is my attempt.  Many of the issues are complex and multidimensional but must be addressed by governments and society.  Both are currently experiencing transitions and major transformations. The economy is currently driven by banks, financial and multinational organisations and the so-called 1% rich and this is now being increasingly acknowledged as having massively failed and in need of urgent review and reform. We need to reverse the current financial policy/philosophy of placing the economy over society. The new approach should be society over economy namely putting social and people centre stage. Obviously this is a very radical proposal and will require a transition which does not fit with capitalism, current financial practices and entrenched political and ideological beliefs.

In addition to this essential transition we need to move away from a linear economy to a circular economy. This will create totally different ways of manufacturing, distributing and deposing products. At present Capitalism is based on making and distributing products with built in redundancy which guarantees return business and the resultant dumping of existing short-lived products without any real consideration about the damage to the environment and the constant depletion of the world’s finite natural resources; not to mention the entrapment of consumers in this model of need/want. This means that an absolute and comprehensive commitment to recycling will become central to future manufacturing processes and people will need to commit more thoroughly to recycling and energy conservation practices.

Equally important is addressing private/personal debt and significantly reducing the current practice of creating and increasing debt. The level of these debts in Britain and America is mind blowing and at present the approach is to ignore them and further increase the levels which will be ultimately unsustainable and will end in a national disaster for both nations! The mantra seems to be spend your way out of debt and create even more debt!

If a different approach is adopted the reduction of personal debt should allow people to save and invest and this in turn this should increase demand and subsequently contribute to the national economy – one of the elements of consumerism.  People at present are spending what money they have on servicing debt and coping with the costs of living, low wages, frozen annual wage increases. In addition working conditions continue to be eroded e.g. zero hour contracts, the growth of employment agencies and the so-called umbrella companies who tax their lowly paid staff at very high rates. The high costs of covering such items as rent, mortgages and utilities continue to dominate their budgets.

However people need to more fully appreciate the importance of financial prudence and develop a greater understanding of financial literacy and the current obsession with property ownership consigned to history particularly in Britain. Rampant consumerism carries real dangers to the economy which encourage many people to live beyond their means and survive on large debts.  If the economy is driven by society and its members many of the current problems will be reduced but that must be based on the assumption that the members of that society are themselves aware of the dangers of adopting the discredited past practices of generating debt.

As the nature of work is transformed by robotics, full blown digitisation, ever newer technologies and the continuing consequences of the global economy developed nations will require to urgently review and fundamentally reform the way they manage employment and the economy. Millions of jobs across the world will be replaced by robots and automated machinery. Governments must have a clear vision and long term policy on the national economy and the future nature of work and how this impacts on workers, citizens and education. It will be a very difficult transition to make.

An example of the future impact of robots and automation is on male employment in America. At present the largest percentage of American males employed is associated with driving e.g. haulage, public and private transport etc. These jobs will be ultimately be replaced by computer controlled vehicles already being piloted across many parts of the world. This raises the question: what jobs will be available for these millions of males in America and those in a similar situation in over 30 nations? Obviously this is just one example of the impact of the introduction of robots and automation. Many other occupations will be dramatically effected by automation and robotics particularly in traditional manufacturing industries and in some services based industries. Many occupations that involve mundane tasks will be replaced by robots while occupations that will require creativity less so.

However there will be occupations that will employ more people as a result of the demographic trends e.g. the aging populations in many countries. A number of service industries will as a result need to respond to the increased demand for care and health requirements where workers will not be necessarily be replaced by robots and where direct human contact is still essential. Other occupations offering a service to people will continue e.g. hairdressing, hospitality, a number of medical services, undertaking etc.  One key question is: will these areas fully compensate for the employment losses in other industries?

If work opportunities decline creating large numbers of people who will be unemployed throughout their lives how do these people survive financially and maintain a reasonable life style for themselves and their families?  One possibility is the introduction of Universal Benefit Income (UBI) or a Basic Benefit (BB) which could allow people to survive financially. This is a proposal where  people receive a basic income whether they are in employment or not. However this again raises fundamental questions about how the UBI /BB is paid for and the consequences for the traditional taxation system. A number of countries are piloting the concept of UBI/BB e.g. Finland and Holland.  Switzerland recently staged a referendum which the Swiss rejected by a large percentage. The Swiss voters questioned how it would be paid for. However an increasing number of commentators say UBI/BB will be introduced within the next two decades as a result of automation and robotics.

This question will require the development of fundamentally new taxation regimes and raise major issues associated with national debts and deficits and a country’s ability to sustain a healthy economy through manufacture and export activity.  In the case of this country we currently have massive debt/ deficits which are increasing and a declining manufacturing base, massive skill shortages and gaps so the future looks very bleak unless the government takes urgent and radical action. If the country vote exit the EU the situation for the economy and manufacturing will be truly dire. Lets hope the vote is to REMAIN!

A Final Comment:

(Inevitably these challenges and transitions will have fundamental implications for technical and vocational education and training and the essential need to develop high quality apprenticeship frameworks. In order to tackle skill shortages and gaps and improve the skills of the current and future work forces colleges and training providers must be adequately resourced and supported by the government and employers.)



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