INFLUENCE OF TECHNOLOGICAL CHANGE AND DIGITAL TECHNOLOGY ON JOB POLARIZATION AND OCCUPATIONAL CHANGE

This article debates the pros and cons of technological change and its influence on the new employment circumstances by analysing different outcomes. Change in technology has brought higher educational demands for workers, leading to a lack of highly skilled workers and an extra supply of relatively unskilled workers, thus creating structural mismatches. Digital technology and automation create temporary displacement and structural unemployment, but also lead to the creation of new, high productivity jobs. Different international studies conducted by reputable world institutions (McKinsey, WB, OECD, etc.) have given rather different approximations of the potential impact of new technologies on occupations and employment. Due to uneven technological progress around the world, but also within countries, "job polarization" appears. As a consequence, the share of employment in high-skilled, high-paying occupations (managers, professionals and technicians) and low-skilled, low-paying occupations (elementary, service, and sales workers) is growing on the one hand. On the other, the share of employment in middle-skilled, middle-paying occupations (clerks, plant and machine operators) is being squeezed. The research analysis in selected OECD countries and EU-28 shows that as a result of this "job polarization", the demand for highly educated workers is increasing and unemployment has mostly hit people with primary and lower secondary education and less. After the crisis in 2008-2009, most countries were not able to return the productivity growth rates to pre-financial crisis levels. Technological progress has significantly influenced technology intensity of knowledge-intensive, high-tech sectors, but decrease employment growth in low-tech manufacturing sectors. Changes in employment shares of different occupation groups in the EU-28 and USA indicate current "job polarization", with a considerable increase in the share of high-paid professionals, but also low-paid service and sales workers in overall employment. Medium-paid occupations, such as clerical support workers or craft and related trades workers and machine operators suffered the largest losses in terms of employment share. It can be concluded that "job polarization" has accelerated since the crisis of 2008-09. As a result, the biggest threat from the digital revolution is not technological unemployment, but widening income inequality. The final outcome is difficult to estimate, though besides certain destructive effects, new technologies and the digital revolution will create other completely new jobs and support additional jobs, primarily in services sectors that are less easy to automate. Therefore, the policy implication to minimize the potential negative effects of technological change and "technological unemployment" should include timely and appropriate forms of government engagement.