Innovation Is What Drives Us: The Impact of Technology on Employment

driverless_carThe inexorable march of progress continues as Google carries on with its plan to bring driverless cars to a highway near you. This form of transportation—previously found only in the annals of science fiction—could prove a boon to the auto-industry and has many other profound implications for both business and society at large.

Among other things, Google’s self-driving car has reignited the larger debate over the role of technology in our lives, especially in the jobs market—a sector that is quite important to millions of working class Americans worried about employment prospects. This concern lies in the prevalent view that advanced technology is usurping jobs that would have otherwise gone to humans. An Associated Press analysis of employment data from 20 countries found that millions of mid-skill, mid-pay jobs already have disappeared over the past five years. With this data in mind, coupled with slow economic recovery, should the American people be worried? Not as much as you might think. It is helpful to realize that this sort of technological innovation has happened throughout history and, while jobs were indeed replaced, new ones arose that more than compensated for the original loss. For example, the combustion engine decimated makers of horse-drawn carriages, saddles, buggy whips and other occupations that depended on the horse trade. But it also resulted in huge auto plants that employed hundreds of thousands of workers, who were paid enough to help create a prosperous middle class. As Nobel Prize-winning economist Joseph Stiglitz states, “What has always been true is that technology has destroyed jobs but also always created jobs.” The invention of the iPhone, for instance, has put more than 290,000 people to work on related iPhone apps since 2007, according to Apple. This suggests that innovative technology continues to create new types of jobs that require higher skills and creativity.

Like an employment phoenix rising from the ashes of a bygone industry, the American worker will undoubtedly be able to take advantage of new opportunities. For its part, the United States must continue to invest in the educational system so its students are able to take on the challenge of these new and exciting industries.

Posted by: Matthew Goldberg

Sources: Washington Post, Forbes, Associated Press, New York Times

Photo Credit: Google self-driving car in Mountain View courtesy of flickr user MarkDoliner

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