Digitized Labor (eBook)

Lorenzo Pupillo is Associate Senior Research Fellow at the Centre for European Policy Studies in Brussels, Belgium, and Affiliated Researcher at the Columbia Institute for Tele-Information at Columbia Business School, Columbia University, USA.Eli Noam is Director of the Columbia Institute for Tele-Information; Professor of Finance & Economics; and Garrett Professor of Public Policy and Business Responsibility at Columbia Business School, Columbia University, USA.Leonard Waverman is Dean of the DeGroote School of Business at McMaster University, Canada.

Acknowledgements 6
Contents 7
Editors and Contributors 10
List of Figures 21
List of Tables 23
1 Introduction 26
1.1Key Messages from Our Book, Chapter by Chapter 33
1.1.1The Impact of Technological Change on Jobs 34
1.1.2Internet Economic Fundamentals and Their Impact on the Economy and Distribution 37
1.1.3Policies to Facilitate Structural and Social Adjustments Without Slowing Innovation 38
1.2Conclusion 41
References 43
Part I The Impact of Technological Change on Jobs 44
2 ICT Investments and Labour Demand in OECD Countries 45
2.1Introduction 45
2.2ICTs and Employment: What Does Economic Theory Say? 46
2.3Innovation and Employment: Findings from Recent Studies 49
2.4Modelling the Effects of ICT on Employment 51
2.5The Dataset 53
2.6Results 55
2.7Conclusions 58
References 59
3 A One-Sector Model of Robotic Immiserization 62
3.1Introduction 62
3.2Literature Review 63
3.3The Model Framework 64
3.3.1Households 65
3.4Production 66
3.4.1Households 67
3.4.2Equilibrium 67
3.4.3Equilibrium Analysis 68
3.4.4Ensuring That All Generations Benefit from the Rise in 69
3.5Conclusion 71
References 71
4 Routinization and the Labour Market: Evidence from European Countries 74
4.1Introduction 74
4.2The EU-SILC Database 76
4.2.1Different Measures of Routinization 77
4.2.2Trends in Routinization in Europe 78
4.3The Determinants of Routinization 82
4.4Is Routinization a Driver of Unemployment Inflows? 85
4.5Conclusion 91
References 91
5 Labor Markets in the Digital Economy: Modeling Employment from the Bottom-Up 93
5.1Introduction 93
5.2Methodology and Hypotheses 95
5.3UK Investment in Recovery 97
5.4Employment Effects of Cloud Services 100
5.5Findings of Cloud Studies 106
5.6Digital London 106
5.7Synthesis 110
Bibliography 114
6 The Impact of the Broadband Internet on Employment 116
6.1Introduction 116
6.2What Does Our Research Tell Us About Employment Effects of Broadband? 117
6.3The “Construction” Effect 118
6.4Job Creation Resulting from Broadband Spillovers 121
6.5Differential Employment Impact by Industry Sector 122
6.6Differential Employment Impact by Region 123
6.7Conclusion 127
References 128
7 The Impact of the Internet on Employment and Income in the US Media and Entertainment Business 130
7.1Introduction 130
7.2Consumption of Media 131
7.3Demand for Labor 132
7.4Supply of Labor 132
7.5Aggregate Employment 133
7.6Performer Income 134
7.7Benefits and Drawbacks for Labor 134
7.8Protecting Performers 134
7.9Conclusions 135
References 135
Part II Internet Economic Fundamentals and Their Impact on Economy and Distribution 136
8 Inequality and the Digital Economy 137
8.1Introduction 137
8.2Gains 138
8.3Losses 138
8.3.1The Internet-Induced Job Losses in the Industrial Sector 139
8.3.2The Impact of the Internet on Service Jobs 139
8.3.3The Unequal Impact on Different Income Classes 140
8.3.4The Impact of the Internet on Younger Workers 142
8.3.5The Impact of the Internet on Older Workers 142
8.3.6Is the Creative Sector the Remedy for These Job Losses? 143
8.4The Fundamental Economics of the Digital Economy 144
8.4.1Fundamental Characteristic #1 of the Digital Economy: Digital Activities Are Typically Characterized by High Fixed Costs, Low Marginal Costs, and Network Effects 144
8.4.2Fundamental Characteristic #2 of the Digital Economy: A High-Risk Distribution of Success 145
8.4.3Fundamental Characteristic #3 of the Digital Economy: The Presence of Non-Maximizers of Profit 146
8.4.4Fundamental Characteristic #4 of the Digital Economy: Excess Supply 146
8.4.5Fundamental Characteristic #5 of the Digital Economy: Price Deflation 147
8.4.6Fundamental Characteristic #6 of the Digital Economy: The “Reverse” Cost Disease 147
8.4.7Fundamental Characteristic #7 of the Digital Economy: Instability 148
8.4.8Fundamental Characteristic #8 of the Digital Economy: The Transformation of Firms into “Network Companies” Leads to a “Freelance” Economy 148
8.5Consequences for Digital Management 149
8.5.1Expect a Return of Unionization 149
8.5.2Expect a New Wave of Political Disputes and Activism in the Digital Economy 149
8.5.3Expect a New Wave Government Policies 150
8.5.4The Need for Direct Business Action 151
8.5.5Stop Claiming to Be the Solution 151
8.5.6Stop Arguing That Seeing a Problem Is Anti-technology Luddism 151
8.5.7Recommend, Support, and Finance Governmental Actions Where Appropriate 152
References 157
9 Job Losses and the Middle Class: Canada and the USA, and the Possible Role of ICT 161
9.1Introduction 161
9.2Productivity and Polarization 162
9.3Canada and the USA 165
9.3.1Productivity and ICT 165
9.4Income/Wage/Job Polarization: USA and Canada 168
9.5Relation to ICT? 173
Bibliography 176
10 Internet Innovations–Software Is Eating the World: Software-Defined Ecosystems and the Related Innovations Result in a Programmable Enterprise 178
10.1The Internet as a Driver for Innovations 178
10.2Software-Defined Infrastructure: The Central Software Innovation 179
10.3Software-Defined Environments: Controlling Today’s Infrastructure 179
10.4The Move to OpenStack and APIs 180
10.5The Emergence of Continuous Software Delivery and DevOps: Creating Software Using Software 181
10.6Containers: An Innovation to Deploy and Manage Software and Data 181
10.7Federating Data and Providing for Data Collection at the Edge of Networks (“Fog Computing”) 182
10.8Block Chains and More Secure Infrastructure 182
10.9The Impact of Recent Internet Innovations 183
10.9.1As Enterprises Adopt Cloud Computing, the Firm Changes to a “Programmable Enterprise” 183
10.9.2The “Programmable Enterprise”—The Motor Promoting Dramatic Job Change 184
10.10Conclusions 188
Bibliography 192
Part III Polices to Facilitate Structural and Social Adjustments without Slowing Innovation 195
11 ICT Innovation, Productivity, and Labor Market Adjustment Policy 196
References 214
12 Ensuring the Education and Skills Needed for ICT Employment and Economic Growth 218
12.1Overview 218
12.2Influence of ICTs in Today’s Economy 219
12.2.1What Are ICTs? 220
12.2.2Influence of ICTs on Economic Growth 221
12.2.3Influence of ICTs on Employment and Wage Growth 222
12.3Educational Requisites for ICT-Related Employment 224
12.3.1Challenges Facing the Current Educational System 224
12.3.2Possible Solutions to These Educational Challenges 225
12.4AT& T Educational Initiatives
12.4.1General Educational Support 227
12.4.2Post-secondary STEM Education Initiatives 228
12.5Summary 229
References 230
13 Smart Organizations, New Skills, and Smart Working to Manage Companies’ Digital Transformation 232
13.1The Transformation of Work Through Digital Transformation 232
13.2Smart Organization 234
13.3Transition from Knowledge to New Skills: TIM Academy 235
13.4Transition to a New Way of Working: Smart Working 239
13.4.1TIM’s Smart Working for TIM’s People 239
13.4.2TIM’s Smart Working for TIM’s Customers 242
13.5Conclusion 242
References 243
14 Investigating the Potential for Micro-work and Online-Freelancing in Sri Lanka 245
14.1Introduction: Outsourcing and Micro-work in Sri Lanka 245
14.1.1Sri Lanka as an Outsourced Work Destination 245
14.1.2Online Freelancing/Micro-work Platforms 246
14.1.3Micro-work in Sri Lanka: Is There Potential? 248
14.2Methodology 250
14.2.1Quantitative Sample Survey 250
14.2.2Qualitative Research Protocols 250
14.3Results and Discussion 251
14.3.1Low Awareness of and Low Willingness to Do Online Freelancing/Micro-work. Those Willing Are Only Interested in Doing So on a Part-Time Basis 251
14.3.2Awareness Came Through Multiple Channels 254
14.3.3Getting a Foothold on Platforms Is Not Easy, and Signaling Quality Is Important 255
14.3.4Flexibility Offered by Freelancing/Micro-work Platforms Is Attractive 256
14.3.5The Range of Work Is Varied. Higher Value Jobs Enable Workers More Control Over Price 257
14.3.6Perceived and Real Barriers Make Micro-work/Online-Freelancing an Unattractive Full-Time Work Options 258
14.3.7Cashing Out Earnings for Work Done Online Is a Problem 260
14.4Conclusions 262
References 265
15 Do Municipal Broadband Networks Stimulate or Crowd Out Private Investment? An Empirical Analysis of Employment Effects 267
15.1Introduction 267
15.2Literature Review 268
15.3Analysis of NTIA Data 272
15.4Policy Implications 274
References 275
Index 278