1. Employment in the Global Knowledge Society
Garry Jacobs
World Academy of Art & Science

2. Myths about Employment
Population growth creates unemployment
Technology destroys jobs
Globalization generates unemployment
Rising levels of unemployment are inevitable

3. Population & Employment 1950-2000

4. Population Growth & Employment 1994 – 2004
Population grew by M (14%)
Employment grew by M (17% )
Job creation is at record rates
Shift from manual to mental work has resulted in a dramatic improvement in the quality of jobs created

5. Unemployment 1994 -- 2004 Unemployment rose from 140 M to 180 M (21%)
6% of global labor force of 3 B unemployed
Labor force participation rose 1.5% resulting in an additional 90 M job seekers since 1990 – largely due to more working women and delayed retirement of the elderly

6. Youth Unemployment (under 25)
Unemployment is concentrated among youth & in cities
Youth are entering workforce faster than job creation due to high pop growth in s
Youth UE: USA – 11%, France – 28%, Croatia – 37%, Spain – 50%, World – 14%
Mismatch between education, training & jobs

7. Impact of Aging on Employment
Significant labor and skill shortages will develop in OECD countries
Working age population is declining in OECD countries -- 8% in EU25 by 2030 – could result in labor shortage of M in EU15.
Labor shortages by 2020: USA 17M, China 10M
Will propel massive migration of people and jobs

8. Impact of Technology
Technological development results in localized direct low-wage job destruction in labor-intensive sectors and invisible indirect job creation in many other sectors.
Technology is stimulus to higher wage indirect job creation in machine production, R&D, education, services with multiplier effect from higher incomes & consumption.
US labor force grew from 29 M to 130 M in a century of rapid technology adoption.

9. Invisible Job Creation: Computers
Computer research, design and manufacturing
Same for peripherals & allied products
Software design, engg, servicing, maintenance
Making and selling computer games
Electronics retailers
Computer training companies
Web publishing, e-commerce, other web businesses
Self-employment – web-based & other
Recycling old computers

10. Globalization
Does transfer jobs from high cost to low cost locations, causing disruptions.
Offset by higher purchasing power at home & reciprocal demand from abroad.
High labor costs alone is not the cause of job destruction. US labor costs were 10 times higher than Europe in the late 19th Century. Total productivity of the economy is the key, i.e. application of Knowledge.

11. Global Shortage of Skills, not Jobs
USA has shortfall of 126,000 nurses & estimates shortfall of 200,000 MDs & 800,000 nurses by 2020.
In Germany, 80% of enterprises with fewer than 20 employees reported difficulties in filling positions.
In Austria, 42% of enterprises face skilled-labor shortage.
50% of firms in developing countries face skills shortage.
Mismatch between skills & jobs due to little or inappropriate education & training
Only 5% of India workforce have formal vocational training

12. Natural Employment Generation
Average person works only 1/3rd of lifetime but requires goods and services 3/3rds
Since the providers of those goods and services also work only 1/3rd of their lifetime, the ratio of working lifetime contributed to working lifetime required of others = 1:9

13. Fractional Job Creation
School going child creates fractional jobs for
Teachers & school administrators
Authors, printers, publishers
Medical care providers & researchers
Garment makers
Toymakers
Farmers & food processors
Retail store & restaurant staff

14. Structural Unemployment
Symptom of the artificial functioning of the society hindered by its structures
9% in Europe
5.6% in USA

15. How society stimulates employment
New products
New services
Growth in demand
Higher productivity
Entrepreneurship
Access to information
Technological innovation
Organizational innovation
Higher quality standards
Legislation & enforcement
Administrative efficiency
Health consciousness
Environment awareness
Higher skills
Increased speed
Change of attitudes

16. Job Creation in India 7 M new job seekers annually
No significant rise in unemployment
Only 8% of jobs in formal sector
Little information on where & how jobs are created in informal sector
Process of job creation poorly understood
Strategy to create 10 M jobs per year
Indian Employment Guarantee Act 2005

17. Job Creation Strategies
Publicize opportunities in the media -- knowledge
Remove structural impediments & disincentives
Increase access to credit
Incentives for new initiatives
Strengthen or enforce legislation
Impart training (computer-based)
Use insurance as a stimulus
Promote entrepreneurship & self-employment
Promote new organizations
Raise minimum levels of education
Create purchasing power (money)
Publicize – jathropa, Lux, internet-based jobs
EU – employment impact assessment
Credit: SHGs – ABN Amro
Insurance – reduce lending, credit or borrowing risks (business certified)
New organizations – contract farming, STD

18. Need for Further Research
Natural process of job creation
Project occupation demand
Project skills requirements

19. Conclusions Now is not the time for fatalism or complacency.
Full employment is an achievable goal.
Knowledge, education, training & human values such as freedom & respect for the individual are the keys.
Right to employment should be guaranteed.
The nation that guarantees it will achieve it.
Future of Employment is in our hands.