Posted in Entrepreneurial Innovation Blog Posts

Entrepreneurship Innovation – 601 Week 4 Reflection

Holes in a Bucket

In the American Marketing Association Journal, Byron Sharp discusses the leaky bucket theory. He suggests that companies are always losing customers, so to maintain share, they have to win an equal number of new customers to keep the bucket full, so to speak. To grow share, they have to be especially good at new customer acquisition, or you have to slow the leak (Sharp, 2015). This theory currently represents the workforce.  Losing employees to technology and then asking them to get reeducated for possible reemployment or recruiting new employees for lesser pay but qualifying skills to adhere to the new demands of the business.

One of the biggest concerns today is finding a well-paying job. With technological innovation growing faster than anyone could have imagined, there is a lot of uncertainty how it will continue to impact the job market. The Economist article “Automation and Anxiety” quoted James Bessen, an economist at Boston University School of Law argues, “Rather than destroying jobs, automation reduces costs and boosts demand thus reallocating jobs rather than displacing, requiring workers to learn new skills (The Economists, 2016). Rifkin differs in opinion, stating that in the past when new technologies have replaced workers in a given sector, new sectors have always emerged to absorb the displaced labor but in the blue collar i.e. agriculture, manufacturing, and service industries millions remain displaced (Rifkin, 1995).

Being born in the eighties gave me a sense of love and respect for technology and but it also made me aware that education was critical. Furthering my tech education would be a requirement if I wanted to go far in any career. I saw a lot of people get discouraged in the workforce because of their lack of technological education, especially my father. It didn’t matter how many years they were with a company or how much experience they had; tech savvy was now a requirement. If we are honest, the lack of tech savvy is where ageism thrives. Ageism is largely defined as being prejudice or discriminating against the elderly. Older workers are being displaced because of the lack of pace to keep up with technical know how. Not to say there aren’t people in their sixties, seventies, or eighties that haven’t kept up with the times especially since many are putting off retirement due to rising living costs. If they are transitioning into another career, their age is an unspoken reason why it takes them longer to find employment.

Conversely, everything comes with a price. Even with the new technological progress and educational advances, seemingly the rich are getting richer, and the poor are getting poorer. Rifkin stated that while some new jobs are being created in the economy, they are in low paying sectors and generally temporary employment (Rifkin, 1995). Erik Brynjolfsson and Andrew McAfee argued the same principle in “Why Workers Are Losing the War Against Machines.” They contended that even as overall wealth increases; there could be, and usually will be winners and losers. And the losers are not necessarily some small segment of the labor force like buggy whip manufacturers. In principle, they can be a majority or even 90% or more of the population (Brynjolfsson & McAfee, 2011). I am certainly not a psychic but gone are the days where jobs are in surplus and pay is equal to the quality of work. Seemingly we are living in a day where you take what you can get or don’t take anything at all.

Sources:

Sharp, Byron (2015) “The Hole in the Leaky Bucket Theory” in the American Marketing Association Journal Retrieved from http://blog.ama.org/the-hole-in-the-leaky-bucket-theory/

Rifkin, Jeremy (1995). “The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era.” 1st trade paperback edition New York: Jeremy P. Tarcher/Penguin, 2004. p. xvii, & p. 4

Brynjolfsson, Erik & McAfee, Andrew (2011, October 26). “Why Workers Are Losing the War Against Machines.” Retrieved from http://www.theatlantic.com/business/archive/2011/10/why-workers-are-losing-the-war-against-machines/247278/

 

Posted in Entrepreneurial Innovation Blog Posts

Entrepreneurship Innovation – 601 Week 3 Reflection

The Trickle-down Effect

In my previous post, I discussed how technological innovation could be a blessing a curse. Continuing on that same premise let’s look at how the workforce has been unstable and stabilized due to technology. If history were to repeat itself, have we learned from our past mistakes? Or are we destined to the ebb and flow of technological unemployment?

In the “The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era.” Jeremy Rifkin states that for more than a century the conventional economic wisdom has been that new technologies boost productivity, lower costs of production, and increases the supply of cheap goods, which, in turn, stimulates purchasing power, expands markets, and generates more jobs. This central proposition has provided the operating rationale for leading unprecedented levels of technological unemployment, a precipitous decline in consumer purchasing power, and the specter of a worldwide depression of incalculable magnitude and duration (Rifkin, 1995).

Rifkin further states, the notion that the dramatic benefits brought on by advances in technology and improvements in productivity eventually filter down to the mass of workers in the form of cheaper goods, greater purchasing power, and more jobs essentially a theory of trickle-down technology (Rifkin, 1995).

Studies have shown that when unemployment rises consumer spending declines. The decline in consumer spending does not just adversely affect one industry but the economy as a whole. When spending is down it, in turn, creates more unemployment. Think about the impact the real estate bubble had from 2006 to 2012. The main culprit was the credit default swap, but the housing market and employment were negatively impacted; thus creating a buyer’s market yet consumers were resistant to make new home investments and instead opted to pay the inflation price of rent in case of default in payment. This resulted in a lot of jobs losses in the housing industry i.e. real estate brokers, construction workers, material manufacturers, investment bankers, and so much more.

Although I agree with Rifkin in regards to we need to learn that trickle-down theory may not sustain us, I would like to argue that unless we place technological boundaries in legislation and enforce how could we make sure that human labor does not continue to dimish? Technology is growing with no crest in sight. We as consumers and business owners will have to either acknowledge that though technology may bring a higher profit now in the grand scheme of things will it work for the economy later? Go are the days when its every man for himself.

Sources:

Rifkin, Jeremy (1995). “The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era.” 1st trade paperback edition New York: Jeremy P. Tarcher/Penguin, 2004. p. 15,

 

Posted in Entrepreneurial Innovation Blog Posts

Entrepreneurship Innovation – 601 Week 2 Reflection

The Blessing and Curse of Technology

Tosh R. Comer

Since the dawn of technology, new technological advances have been a blessing and a curse for the workforce. Computers and automated assembly lines have been able to take over menial tasks thus making one’s job easier, yet shortly after being replaced altogether by that same technology. Over the last fifty years, replacing human labor has been the norm for labor intensive and administrative industries. For businesses, new technology means more profit for fewer costs, unfortunately, employment is left in the balance to weather the storm of restructuring. Therefore, will technology continue to diminish human labor thus creating economic instability or re-educate the workforce and create new markets? Many economists argue the latter, in truth only time will tell.

Technological innovation, a friend or a foe?

Technology has redefined our way of life. From home to work there is some form of technology that makes our lives easier. From the medical field to the grocery store, there is some form technology that has made your experience human-less. However, have we ever considered how many jobs have been lost or how many jobs are in danger of being replaced by automation because of technological advances? Of course not. We don’t think about it until it could affect us individually.

There is a serious debate going on between economists about human production versus automation and how it impacts employment. In the “The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era.” Jeremy Rifkin argues that ranks of unemployment and underemployment are growing daily because of technological advances in the workplace and that more sophisticated software technologies are going to bring civilization even closer to a near worker-less world (Rifkin, 1995). Over the last thirty years, companies have restructured their business needs because of innovation with computers. What use to require a whole department, a single computer can now accomplish the same output within a matter of seconds.  For businesses, this optimal but for displaced employees, it leaves them in search of employment.

Thriving and surviving

Understand that technology is not the enemy. In today’s society, you practically can do nothing without some form of technology. Just think about how much you couldn’t get accomplished without your computers, phones, printers, or in-home amenities if we lost all electrical power. Technology has been pivotal in creating new jobs and new market industries. Years ago the notion of telecommuting or even working full-time at home for a company was unimaginable, and now this is a norm for the vast majority of the workforce. The knowledge sector i.e. entrepreneurs, scientists, technicians, computer programmers, professional educators, and consultants have been able to grow by leaps and bounds. Additionally, furthering education is sought out more and more to keep up with all the technological advances.

Consequently, the debate continues. How is one to know where to end technological advance? It certainly has its drawbacks, but it also has its rewards. I personally never want to go back to an age without technology, however, researching this topic has opened my eyes to the fact that there needs to be a balance between technology and human labor. Here’s a question for you readers, Has technological innovation become such an insatiable beast that we cannot foretell how it will impact the labor force for generations to come? Stay tuned for my response.

 

Sources:

Rifkin, Jeremy (1995). “The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era.” 1st trade paperback edition New York: Jeremy P. Tarcher/Penguin, 2004. p. 5