Lately, Organisations are retrenching and we are fallaciously blaming technology. Although Kenya is nowhere near the top of the intensity of technology use, the use of technology has given Kenya a good image. Technology has enabled greater productivity and contributed to economic development at large.
However, it is not the cause of job losses in Kenya today. The experience from countries that have fully automated is such that unemployment in such a situation is temporary. Technology disrupts and shifts jobs around rather than eliminates them.
If there is any technology-engineered unemployment, economists often say that job losses are offset by other compensating factors. These include the impact of new investment, the effect of the new technology (operations and maintenance), the extent of disruption by the new technology, and the impact of greater efficiency.
The first factor is explained by an increment in investments. Until the local banks put up additional investment in Information, Communication Technologies (ICTs) that enabled branchless banking, payment to customers especially through cheques used to take more than three weeks. The resultant efficiencies led to higher bank profits hence the motivation to expand and create more jobs.
The second factor can be explained by the way the technology is deployed and used. For example, when Mobile money technology was introduced, the fears were that Post Offices would lay off workers.
Instead, the new technology became a net creator of employments through agencies in order to operationalise the technology. As at the end of 2018, there were more than 200,000 telco agencies spread across the country.
The third compensating factor relates to the second one and can be explained as a possibility of new technology creating a new industry altogether. Mobile technologies have created the social media industry that never existed before.
This industry has created a plethora of new jobs including big data analytics, digital marketer, blogger, app developer, hackers just to name a few. In the next few years, there will be many more jobs whose titles we don’t know today.
The fourth compensatory factor is the possibility of increasing the efficiency of individual workers, thus transforming the workers into useful assets in the organisation. Often, the salaries of such employees increase.
Salary increases boost aggregate demand and therefore greater economic output, resulting in economic growth. In the early 19th century, an oath-based organisation of English textile workers known as the Luddites, opposed the introduction of machinery, fearing that machines would replace their role in the textile industry. The Oxford English Dictionary today explains the term Luddites as “one opposed to industrialisation, automation, computerisation, or new technologies in general.”
The textile industry still employs large numbers of people despite the fact that machinery has been part of its development.
As we transition to the era of big data, the government will hire more people to do the analytics of data to facilitate decision-making. It is in our own interest to keep pace with technological development. The world has become such a small village that one can easily lose a competitive advantage.
No employer will enjoy laying off staff that they have trained for many years. Sometimes circumstances like economic slowdown and rigid unions do indeed force employee layoffs but rarely does technology cause unemployment in developing countries that have not even automated.
It is too early to associate emerging technologies like Artificial Intelligence to job losses.
What is certain is that we must continuously improve our skills in order to be relevant in future work. We must seek to be agents of economic growth and for that to happen, we must improve on productivity.
