TOOC Module 6

Week 6 The Future of Work in the Arctic

This module’s objective is:

  • to examine ways in which S&T innovations are changing the nature of work in the North, both by eliminating jobs and by creating opportunities for new forms of work and business development

The fundamental purpose of an economy–regional or national–is to produce viable and sustainable companies and business that, in turn, create decent paying and reliable jobs for regional residents and the prosperity of the community.  This is the logic behind the promotion of resource development, tourism or any other economic activity and remains a primary goal of governments around the world.

The new economy presents some unique and puzzling challenges, and none are greater than the future of Work in the North.  Here is the essence of the problem: new technologies typically eliminate or reduce jobs.  Salaries are one of the major inputs for any operation, from a factory to a government office or from a drilling platform to deep ocean fishing.  Eliminating jobs through labour-saving devices and technologies can make companies viable, produce greater profits, and reinforce business stability. But labour saving means fewer jobs.  Fewer jobs means fewer opportunities. Fewer opportunities creates uncertainty, if not panic, in the local and regional population. Without good and sustainable jobs, people leave communities (often heading for cities or larger urban centres) leaving towns and villages to suffer economic decline and an overall downward spiral in population and community development.

There are some offsets here. New technologies could and often do eliminate difficult and dangerous jobs. Improvements in mining operations, for example, have moved people away from a lot of the dangerous work underground. This is good news–unless you are a miner with few prospects for new employment. Further, one of the goals of humanity overall has been to reduce the amount of work that we do and to replace work with machinery, particularly in the case of repetitive, simple and low-skilled work.

Consider one example: Many communities have re-sorting stations for recycled materials. The work is not very exciting, but provides solid work for people of limited skill and with a strong work ethic. But these jobs are, in technical terms, largely unnecessary. The workers could be replaced with machines that could handle the sorting. The machines would do it faster, more accurately and much more cheaply.  So, should the local authority eliminate all of the jobs and do what is efficient?  Sometimes, saving money is not the only thing that matters.

Of course, the new economy is supposed to create new jobs and new opportunities.  That is true, but only in a limited way.  First, the new economy makes fewer jobs.  Google, one of the wealthiest companies, in the world, has only 20,000 employees, 1/20th the number of Toyota Corporation.  Second, the new economy places a premium on high end computing, engineering, medical, mathematical or scientific skills.  These skills are already hard to acquire and in great demand.  They will become more so in the future.  Equally important, the people who are displaced can only rarely shift into the jobs that are being created. They are, in other words, different people with different skill sets.

The major work problem within the North is simple.  The historic prosperity of many northern communities rested on the availability of substantial numbers of low skill, high wage work.  In Scandinavia and North America, this was largely due to the presence and authority of unions, which forced up wages and improved working conditions.  The result was a general egalitarian northern society, with substantial numbers of working people earning decent incomes while doing work that did not require advanced education or specialized training.  The forest industry is the one sector that already experience massive work place reform, with new harvesting machinery undermining historical logging work and mechanized and computerized sawmills and pulp and paper operations displacing tens of thousands of workers around the world.

The possibilities for the displacement of workers are substantial.  Here are some of the examples that are currently possible (and note that the major dislocations are in the future):

  • Remote operation of mines, including on site machinery;
  • Long distance truck driving
  • Internet-based surgery (to say nothing of remote psychiatry and robot-based nursing)
  • Supply delivery using drones
  • Digital health monitoring
  • Fully digital grocery shopping
  • Remote monitoring of wildlife, environmental changes and other natural phenomenon
  • Outsourced professional work, including the racing of medical charts, legal work and accounting services

Before you start criticizing major companies and governments for cutting jobs to save money, recognize that you do this yourself.  Here are a few of the labour saving and job killing activities of many normal citizens:

  • e-commerce/online shopping
  • downloading movies, books, magazines
  • e-banking
  • operating subway systems
  • online education
  • digital health monitoring
  • digital accounting and income tax filing
  • self-service gas stations and self-check out a retail stores
  • automated payment systems
  • airplane check-in
  • online ticket purchases

At present, we are on track to eliminate a great deal of low skill, decently paid work.  The net effect could be positive, particularly for people of substantial wealth. Purchases will be cheaper and more efficient and many more services will be available remotely.  Who would not want to get a full medical check up without leaving their home?  The point, and it is a serious one for the North, is to figure out what people will do for work.

To date, the new economic has been good at eliminating work and much less successful at creating jobs.  There have been some successes.  Digital content has seen a lot of growth.  Animators and app makers are doing reasonably well, although even these firms and employers are facing global competition. Some new companies are being formed and some new sectors are emerging–digital health is a fast-growing field, although doctors and nurse will face displacement by the new technologies.  On balance, and particularly for the Far North, there are precious few jobs being created and many being lost.  To use a North American example, the advent of Netflix and Hulu have undercut the video rental business to the point where most of the stores have shut down and their employees let go. Experts are struggling to figure out where the new work will come from–although the optimists are confident that it will be found.

Stare into the future–not the distant future but the next 10 to 15 years–and you will see even more changes coming down the line.  Algorithms (mathematical programs that replicate human thinking and decision-making processes) are becoming incredibly sophisticated.  Research shows that digital solutions are more accurate at even some fundamentally human tasks: selecting the best candidates for a job, making a medical diagnosis, managing airport and highway traffic, completing a psychological and psychiatric assessment, among many others.  People will resist some of these and accept others. All we know for certain is that the future of the work is very uncertain.  And for the Far North, where the vulnerabilities are greater than the obvious opportunities, there is particular reason for the concerns.

 

Innovation and Economic Prosperity–but Fewer Jobs?

There is a great deal of excitement about S&T Innovation. Each release of a new Apple product attracts a great deal of free media attention. Who doesn’t get excited about smart phones, Netflix, Amazon.com, free (and often illegal) digital downloads of movies and songs, and all of the other developments we associate with new technology?  Eric Brynjolfssion, co-author of the impressive, The Second Machine Age, tells us of the real impact of innovation–focusing on the huge potential for substantial and sustained economic development. The potential for real growth, he argues, is underappreciated and needs to be better understood.

This workplace transformation is under way now.  I was at the Arctic Frontiers 2015 conference in Tromso, Norway in January.  Two announcements came up around that time:

  1. One of the largest oil and gas companies announced deployment of the first autonomous (e.g. labourer free) oil rig ever used in the Far North.  How many jobs will be lost–directly and indirectly–by this shift?
  2. The Government of Norway indicated the use of remote controlled snowplows to clear airports in northern Norway  The attractions are obvious–lower costs, decreased risk to workers, more dependable service–but the costs are significant too. There will be fewer workers, fewer wages in the North, substantial indirect job loss, etc.

In other words, the loss of work through technology is not tomorrow’s business! It is happening today and already happened yesterday.

When you are finished this video, watch the commentary by Robert Gordon.

Confused? Understandable. Looking for certainty? You are not likely to find it.  We are heading into the unknown.

 

Andrew McAfee–Innovation and the Future of Work

Almost 20 years ago, Jeremy Rifkin wrote a fascinating book called, The End of Work, with the title saying it all. Technology, he argued, would undermine work as we know and understand it.  Well, fast forward to today, and a lot of his predictions have materialized. There are new jobs–web designer and app creator jobs–that did not exist two decades ago. But many more have been lost. McAfee, one of the authors of the fundamentally important book, The Second Machine Age, updates Rikfin’s analysis and provides his own warnings about the world ahead.

These reviews are very general and do not apply specifically to the North. Indeed, very little research has been done on the Far North and few people spend a lot of time thinking about the future of work in the region. Do you think that these issues apply to the North? Is the risk greater or smaller in the North?  My view is the the replacement of work through technology is going to hit harder and faster in the North. There are benefits to offset the costs. The introduction of online banking and automated tellers have provided banking services to people throughout the North.  But many of the communities across the North have lost their local banks and bankers, meaning a real loss of personalized financial services. How do we find a balance?

Andrew McAfee–Robots and Work

Have you ever thought about how these S&T developments are eating away at jobs and, therefore, career opportunities for young people and even current employees?  Every time you use at ATM (Automated Teller Machine), self-service gas station or check out counter, online bank, online retail operation, or any one of hundreds of other common applications, you are contributing to a rapid job loss — one that is much faster than the creation of new jobs in the digital economy.  The reach and impact of the new technologies is probably greater than you think.  Some manufacturing plants around the world are “worker free.” Mines can be operated remotely from hundreds if not thousands of miles away.  Accountants and lawyers are losing jobs to computers and complex algorithms.  Andrew McAfee, the other co-author of The Second Machine, provides a wake-up call about one of the greatest potential implications of the so-called “new economy,” namely the decline in work and employment.  Notice that he ends on an upbeat note — and starting thinking hard about how his vision of the technologically-driven future relates to the Far North.

 

Northern Resource Companies

The resource sector presents particular challenges to the far North.  On the one hand, the global demand for minerals, oil and gas is drawing hundreds of mining and resource companies into the Arctic.  This has created unprecedented opportunities across the region.  But there is a countervailing force: the development of new technologies for resource activities often with substantial job losses associated with these technologies.  So, here is the dilemma:

  • There is a huge demand for northern resources;
  • The resource companies are developing new properties across the region, adding to regional economic activities.
  • Enhanced technologies are making it possible to work in areas that would have been impenetrable only a decade or two ago.
  • Resource companies need and use new technologies in order to be competitive and to produce high value for shareholders.
  • Resource companies are working closely with Indigenous communities, providing jobs and training across the Far North.

But this has to be offset by the following:

  • Technology is replacing work, perhaps at a faster rate than most of us appreciate;
  • The Indigenous population is growing very quickly, so more jobs will be required in the near and medium term future.
  • Indigenous communities expect the resource sector to improve northern economies

So, the reality is simple: more resources, more northern wealth, some additional opportunities, a higher technology workforce and economy, increased government revenues, and more profitable companies.  It is not clear, however,  that the developments will result in greater opportunities for northerners.

Check out some of the recent developments in northern resource technologies; you will quickly get a sense that northern mining is going to be very different in the near future.

http://www.infomine.com/library/videos/1293c0/komatsu_autonomous_haulage_(english_version).aspx 
http://www.asirobots.com/mining/ 

 

Check out the reports and websites  (following pages) on the oil and gas sector.  Note both the scale of the oil and gas prospects — and the major climate, geographic and technological challenges.

Download Arctic_oil_and_gas.pdf (1.64 MB)

http://www.ft.com/cms/s/0/7a4d24fc-f5c0-11e1-a6bb-00144feabdc0.html#axzz3HIBic9Rz

http://barentsobserver.com/en/energy/2014/04/worlds-northernmost-offshore-oil-transport-22-04