Ever since mankind evolved from early hominids hundreds of thousands of years ago to homo sapiens, technological advancements have had a profound and ever evolving impact on human labor. While innovation has driven economic growth and created new job opportunities over the centuries, it also disrupts existing roles, requiring workers to adapt to changing demands.

For the most part, technological innovations have helped move society forward and made nations and people wealthy. There are too many throughout history to discuss them all but maybe I’ll go into some of the major technological advancements in a later post. This article will provide a high level overview of how technology in the digital age will impact the workforce.

Technological change sometimes sneaks up on us slowly. For instance the internet was invented in the early 70’s and was used only by universities and some government agencies. Fast forward a few decades to the early nineties and talk of the “world wide web” is starting to happen in more mainstream circles.

Then each year more and more people start using it. First likely at work, then at home as home computers become popular. At the time it was the natural progression of a new technology but who would have known at the time the impact the internet would have on our daily lives.

Early consumer use of the internet was basically for information and then slowly for buying products. Then add in daily tasks like email, renewing your drivers license, buying airline tickets, making appointments etc. and you can easily see how all these activities have impacted not only the consumer but the people whose businesses were put online as well as those whose jobs were displaced.

Fast forward another decade or so and suddenly we have the internet on our phones. Technology increases exponentially and now we are on the verge of the AI revolution. At least for this revolution, it seems like we can see it coming. And as technology moves ever faster we are seeing just about everything moving online and thus being “digitized”.

Below are some of the primary ways that technology shapes labor markets:

Automation and Job Displacement:
Automation in Routine Tasks: Many routine and manual jobs in industries like manufacturing, transportation, and retail are being automated, which can lead to job displacement. Robots, AI, and machine learning can perform repetitive tasks more efficiently than humans, reducing the need for human labor in certain areas. The reduction in labor also leads to a reduction in workplace compensation claim and other labor related matters.
Impact on Low-Skill Jobs: Lower-skill and lower-wage jobs are more susceptible to automation, potentially leading to higher unemployment rates among these workers. This raises concerns about wage stagnation and economic inequality, as displaced workers may face difficulties in securing new positions.

Creation of New Job Roles
Growth of Tech-Related Roles: While automation replaces certain jobs, it also creates demand for new roles in technology development, AI, data science, cybersecurity, and robotics. These high-skill positions generally require specialized education and training, offering growth opportunities for workers with these skill sets.
Emerging Sectors: Advancements in technology have fostered entirely new sectors, such as e-commerce, green energy, biotechnology and AI. These industries open up new job markets, albeit with the need for specialized expertise.

Changing Nature of Work
Increased Demand for Digital Skills: As technology becomes more embedded in all sectors, demand grows for digital skills across various levels of work. Jobs that previously required minimal technological proficiency now often require at least a basic understanding of computers, data management, and digital tools. Companies are increasingly “digitizing” their processes whereby the old ways of using paper and keeping hard copies is being replaced with everything either online, in the cloud or on company servers.
Shift to Remote and Gig Work: Technology has enabled remote work and the rise of the gig economy. Platforms like Uber, Upwork, and others allow flexible, freelance work arrangements, which offer autonomy but may lack job security, benefits, and labor protections associated with traditional employment. You hear a lot more nowadays about “side hustles”. The rise in side hustles is directly attributed to the ease with which people can make additional money thanks in large part to technology.

Reskilling and Upskilling Needs
Lifelong Learning: Workers need continuous learning to keep pace with technological advancements. Many companies and governments are investing in reskilling and upskilling programs to help workers transition to new roles as their previous jobs become obsolete.
Role of Employers and Policy Makers: Employers increasingly offer in-house training, while policymakers advocate for publicly funded training initiatives. The goal is to create a resilient workforce capable of adapting to rapid technological changes. Ideally for every job lost due to technology, one or more jobs would be created. The key here is for workers to stay ahead of the digital revolution. This sounds easy but attaining new skills isn’t always easy even if you knew how to do so. In most cases, corporations will find themselves in the position of having to train their employees.

Economic Inequality and the Digital Divide
Widening Wage Gap: High-skilled workers in tech and knowledge-intensive roles are seeing wage growth, while low-skilled workers in jobs that can be automated face stagnant wages or job loss. This contributes to a widening wage gap and economic inequality.
Access Disparities: The digital divide — unequal access to technology and digital skills — limits opportunities for certain demographics, often along socioeconomic, regional, and generational lines. Addressing this divide is crucial to ensure equal access to new labor opportunities created by technology. A growing gap between the haves and the have nots will ultimately lead to civil unrest or worse.

Productivity and Economic Growth
Increased Productivity: Technology boosts productivity, allowing companies to achieve more with fewer resources. This can lead to economic growth, lower production costs, and potentially lower consumer prices.
Shifting Value Chains: Globalization, facilitated by technology, shifts production and service tasks to regions where labor is more affordable or skilled in particular domains, affecting job availability and wages in different parts of the world.

Policy and Ethical Considerations
Regulation of AI and Automation: Policymakers grapple with regulating AI and automation to prevent excessive job loss and ensure fair labor practices. They also work to balance technological innovation with workers’ rights.
Universal Basic Income (UBI) and Social Safety Nets: Some policymakers are exploring UBI or other safety nets to support workers who may face prolonged displacement due to rapid technological shifts.

Now add in blockchain and technology really gets super charged. Investopedia defines blockchain as follows: “Blockchain is a decentralized digital ledger that securely stores records across a network of computers in a way that is transparent, immutable, and resistant to tampering. Each “block” contains data, and blocks are linked in a chronological “chain.””

So what is meant by “securely stores records”? Well once something is on the blockchain, it is there for good. Things such as contracts, licenses, titles to cars, mortgages and just about any other document we all use in our day to day lives will soon be part of the blockchain. Once on the blockchain it will be “immutable” or unable to be changed. This will allow for documents to live forever without the possibility of being lost, stolen or altered. This will inevitably lead to many industries if not going away, certainly needing fewer workers.

With the addition of AI (artificial intelligence), things are going to be supercharged. AI will displace workers in just about all fields. In particular jobs that are easily repeatable and considered low skilled.

That said, between blockchain and AI, is there a need for lawyers? Or bankers? Or mortgage brokers? Or underwriters? Unless your job has a unique value proposition that cannot be replaced and requires a human element to it, you are likely at risk of succumbing to the next revolution.

So what to do? What steps do you need to take to ensure your job doesn’t get digitized, put on the blockchain or AI’d away? Learn. Learn as much as you can about this new wave of technology and do whatever possible to stay a step ahead. Once you learn how these technologies work and can be utilized, you can identify both threats and opportunities to not only your job but to you investments as well. As the homepage of my website states….”The Future Belongs To Those Who Are Prepared”. Will you be?

In Summary:
Technological advancements in the labor market present a dual narrative of opportunity and disruption. The challenge lies in balancing the benefits of innovation with the potential negative impacts on the workforce. Efforts in reskilling, policy adaptation, and economic redistribution will be critical in ensuring that technological progress translates into shared prosperity rather than increasing inequality. The digital genie was let out of the bottle decades ago. With just about every aspect of our lives becoming digitized. and the ever increasing pace of technological change, there is too much at stake to not be ready for it. 

Thanks for reading!

Until Next Time,

Macro Ark

Note that I am not a certified financial planner and am in no way qualified to offer financial advice. This article is for information and entertainment purposes only.