Transformations in Technology, Transformations in Work October 2016 Transformations in Technology, Transformations in Work October 2016 Published in October 2016 by JustJobs Network Inc. Acknowledgments: The JustJobs Network would like to thank all its network members and guest authors for their contributions to this volume. We are grateful to German Federal Minister of Labour and Social Affairs, H.E. Andrea Nahles, whose interest in technological change and its impact on labor markets inspired this volume’s theme. JJN Executive Director Sabina Dewan and Deputy Director Gregory Randolph helped conceptualize the volume and led the editorial process, providing valuable intellectual inputs throughout. A special thank you to JJN Fellow Knut Panknin for his contributions in reviewing and launching the volume. Atisha Kumar provided editorial support. Ruchika Joshi and Prachi Agarwal were instrumental in the final production. JJN expresses its gratitude to the International Development Research Centre of Canada, which supported the research for Chapter 2, and in particular Edgard Rodriguez for his ongoing collaboration. Finally, JJN acknowledges the Norwegian Ministry of Foreign Affairs for its continued support of the organization’s work; this support makes it possible for us to undertake efforts like this volume to help inform the global debate on important subjects, such as the impact of technology on the world of work. Previous signature volumes: Global Wage Debates: Overcoming the Youth Employment Politics or Economics? Crisis: Strategies from Around the World (2015) (2014) CONTENTS Foreword Introduction 01 Chapter 01 On-Demand transport workers in Indonesia 15 Toward understanding the sharing economy in emerging markets Victoria Fanggidae, Muto P. Sagala & Dwi Rahayu Ningrum, Perkumpulan Prakarsa Chapter 02 Are online work platforms creating a frictionless global labor market? 47 Analyzing data from the largest Spanish-speaking freelance portal Hernan Galperin & Catrihel Greppi, Guest Contributors Chapter 03 Digitalization of industrial jobs in Germany 73 Prospects for human-oriented work design Hartmut Hirsch-Kreinsen, Technical University of Dortmund Friedrich-Ebert-Stiftung Chapter 04 Harnessing digital platforms to mobilize workers in China 87 The experience of workers’ rights centers Eric Gottwald & Kevin Lin, International Labor Rights Forum CONTENTS Chapter 05 Deploying technology to grow micro-enterprises in India 103 Evidence from urban Gujarat Keren Nazareth, Saath Charitable Trust Vishakha Pandit, Saath Savings and Credit Cooperative Ltd. Chapter 06 Technology, skills and wages in South Africa 125 Tackling labor market polarization Aalia Cassim, Guest Contributor Chapter 07 The mixed effects of agricultural technology in Indonesia 141 Balancing productivity, employment and equity Viesda Pithaloka, AKATIGA Center for Social Analysis Chpater 08 Improving agricultural livelihoods through e-vouchers in Zambia 161 Leveraging technology to streamline and strengthen farm subsidies Felix Mwenge & Gibson Masumbu, The Zambia Institute for Policy Analysis and Research Chapter 09 Assessing the social dimension of the digital economy 181 Policy frameworks for quality jobs of tomorrow Sharan Burrow, International Trade Union Confederation (ITUC) Anna Byhovskaya, Trade Union Advisory Committee to the OECD (TUAC) Spotlight: An IMF agenda for balancing efficiency and equity 207 Prakash Loungani, Chief, Development Macroeconomics, IMF Research Department Advisory Group Member, JustJobs Network & Senior Fellow, OCP Policy Center FOREWORD Few would dispute that technology has, throughout history, altered the nature of work. But today, the pace of technological change and innovation is unprecedented. This raises the question of whether workers, organizations, governments and economies as a whole can adjust quickly enough. In Germany, the Federal Ministry of Labor and Social Affairs has in mid-2014 created a framework for both a public and a high-level expert dialogue on the future of work – “Work 4.0” as we call it. As part of the process we scrutinize the drivers that are changing the world of work, analyze the areas in which policy responses may be required and develop concrete proposals for policy. Topics we discuss are, for example, working time and teleworking regulations, the effects of digitalization on employment and skill requirements as well as the development of the on-demand economy. Our dialogue process will come to a preliminary close with a final conference at the end of November, where we will present and discuss the conclusions we have drawn from the dialogue process. Given the magnitude of the digital transformation, the JustJobs Network aptly selected technology and jobs as the theme of its 2016 annual flagship publication. This volume documents how different countries, at varying levels of development, are grappling with the advent of new technology and its effects on their labor markets. This timely project coincides with heated debates on the displacement of workers due to automation, the on-demand economy and innovation in many countries. In the face of the current changes, we cannot preserve the world of work as it is, and in some respects it would be even counterproductive if we tried. But I am sure that if we manage transformation processes well and adapt our institutions accordingly, we can minimize the negative impacts and harness the potential for new and better jobs that the digital transformation offers. Andrea Nahles Minister of Labor and Social Affairs Federal Republic of Germany INTRODUCTION Sabina Dewan and Gregory Randolph, JustJobs Network JustJobs Network www.justjobsnetwork.org 1 2 Transformations in Technology, Transformations in Work INTRODUCTION Sabina Dewan and Gregory Randolph, JustJobs Network From Stanley Kubrick’s 1968 film “2001: A Space planet. It is also small mobile phones and tablets Odyssey” to Marty McFly’s time machine in “Back that are changing interpersonal communication, to the Future,” the prospect of a future dominated giving remote farmers access to weather forecasts, by technology has captured imaginations for enabling payments between migrant workers and decades. But the time their families. It is a digital these films projected has Technology is upending transformation spurred by now arrived; advanced traditional employment rapidly increasing access technology is not a thing to the internet, which of the future. It is a fact of models, affecting bothcan instantly make vast today. And while visions the nature of jobs and amounts of data available of flying cars by 2015 may employment rates. at one’s fingertips. But it is have been far-fetched, 21st also robots and machinery – century technologies are transforming our lives precise and productive – replacing workers across and work in ways that would have been difficult a diversity of occupations (see Figure 1). to imagine just two or three decades ago. How technological innovations will unfold, how From the Industrial Revolution beginning in the they will shape and reshape the nature of work 1700s to the advent of the internet in the 1990s, and consequently people’s lives, is ultimately technology has had sweeping effects across the difficult to predict. globe for centuries. But today, as if on steroids, new technologies – many enabled by the digital What we can do is understand the impact of revolution – are advancing at an unprecedented technology on people’s working lives today. pace and scale. Technology is upending traditional employment models, affecting both the nature of jobs and Technology is Tesla and SpaceX – big, innovative employment rates, though the effect on the latter and visionary – offering positive possibilities of is perhaps less pronounced at an aggregate level hybrid cars or even transportation to another than many imagine. JustJobs Network www.justjobsnetwork.org 3 Based on case studies from around the world, technological transformation and jobs. Five key this volume by the JustJobs Network sketches themes emerge from this research. the complex and evolving relationship between Five key themes of this volume 1. The discourse on technology highlights the Chapter 7, for instance, examines an Indonesian trade-off between efficiency and equity, and government program to boost agricultural policy frameworks must strike a balance between productivity through technology. It finds that the two. the impact of a combine harvester in Indonesian agriculture hinges on where On the one hand, and how the machine is technology enhances The relationship between introduced. In parts of the productivity and efficiency, technology, productivity, country where the vast but on the other, it can and the quantity and quality majority of workers rely on lead to labor substitution agriculture, the technology and increasing inequality. of jobs is dynamic and destroyed harvest time This is at the heart of global context-specific. work for people without debates on technology’s other viable employment impact on jobs. While some argue that 21st century options. It also upended a traditional model of technologies are rendering workers redundant far wealth redistribution through labor-intensive faster than they are generating new employment, harvesting, exacerbating local inequalities. others contend that the aggregate gains in productivity brought on by technology will The nature of technological change today also enable more job creation in the long run. As this tends to produce skill and wage polarization volume demonstrates,