I recently participated in a roundtable discussion on Work and Value in the Digital Economy, convened by MIT’s Center for Digital Business. The roundtable addressed some of the most critical questions we face in our emerging digital economy, including: what is the future of jobs; where will jobs come from in the coming years?; and will the nature of work be significantly different in the digital economy?
Since the advent of the financial crisis around five years ago, we have been searching for answers to these very important questions. The US economy has gone through a number of ups and downs over the past seventy years. Unemployment went up during the down periods, but it did not last long. The economy started to improve within a relatively short time and unemployment went down once more.
But our current downturn seems to be fundamentally different from the recessions of the past decades. While US unemployment rates have now edged down below 8 percent, about 12 million people remain unemployed, with 40 percent classified as long-term unemployed, that is, jobless for 27 weeks or more. An additional 8 million are involuntary part-time workers because they have been unable to find a full-time job.
It is generally agreed that our persistent high unemployment rate, - the longest such period since the Great Depression, - is primarily caused by a fundamental reshaping of the economy. The US and other advanced nations are going through structural changes driven to a large extent, by advances in information technologies. Companies are able to do their present work with fewer people, as a result of the major improvements in IT-based labor productivity in the past two decades. At the same time, sophisticated IT infrastructures have enabled them to optimize their supply chains and shift work around the world to cut costs.