Automation and Computerization in the Developing World
Name
Institution

Contents
Introduction 3
A review of the impacts of technological changes in the labor market 3
Demand for enhanced skills 5
Effects of computing and automated services on the job market 6 The rise of white collar jobs 6 Elimination of low-skilled workforce 6 New skills to match the new requirements 7 Alterations in the worker's relation to the job 8 Changes in the office workplace 9
Human factors in labor provision 9
Disparities in the wage income structure 10
Conclusion 11
References 12

Automation and Computerization in the Developing World

Introduction

The early 1990 marked a new era of technological advancement in most parts of the developing world. How automation and computerization has affected work in these countries has been a major topic in the learning of labor market trends and wage distribution in the countries that have so far embraced automated computerized technologies in their service industries (Artuc, Chaudhuri & McLaren, 2010, p. 1027). From a historical perspective, the use of calculators and typewriters in offices marked the beginning of computerization and automation of services in the world. This article provides an overview of research on various areas of concerns all that have shaped these paradigms. These considerations takes a keen attention, especially on how technological changes have affected the wage allocation and employment trends in the labor market, and how these technological changes have affected the bargaining power of low-skilled employees.

A review of the impacts of technological changes in the labor market

In analyzing the impact of the wave of technological change that swept the developing world in the early 1990’s, Guy (2008, p. 684) observes that the drastic shifts in technological embarrassment have been comparatively much important to the industries than the much desired changes in the industry wage compensation. The author volunteers a framework in which capital in-put and skilled workforce were used to create what became to be widely known as “workable capital” such as equipment and specialized skills, which were then used by the unskilled workforce to create industrial productivity. Artuc, Chaudhuri and McLaren (2010, p. 1030) in their work provided evidence based technology and capital-based skilled compensation scheme in manufacturing industries in the developing countries at around the turn of 1990. In supplementing their claim, the authors suggest that these maneuvers were inspired by the introduction of unremitting and progression pressure to embrace advanced technologies, especially with the introduction of robotic appliances which witnessed a decline in the low skilled wages. Frey and Osborne (2013) reckon that skill-based technological developments in most parts of the developing world did not lead to automatic increments in wage inequality given that the simultaneous growth in public schooling afterwards supplemented the needed for skilled labor. For the developing market, therefore, these studies indicate that technological changes increased the cost of skill levels without necessarily increasing wage earnings. This scenario came about on the assumption that the supply of skilled laborers either improved or because new skills that were aimed to confront the labor crisis were not rewarded or acknowledged (Firpo, Fortin, & Lemieux, 2012, p. 68). Both computerization and automation are universal models of technological advancements, and studies examining the effects of these advancements on labor market trends have had varying results. Most studies demonstrate that automation and computerization have led to a sharp decline in the demand for a skilled workforce and a change in the wage allocation regime (Firpo, Fortin & Lemieux, 2012, p. 71). Consistently, researchers in this area evaluate the wage differential connected with the computerized application (skilled labor) at a high of 10 to 15 percent, yet when the same methodology is used, the wage differential connected by using a paper and a pen (unskilled labor) seem to be pegged on similar scales. This pattern is a demonstration that wage allocations in the developing countries is not necessarily determined by skills, but are some sort of job rationing criteria aimed to deny majority of the workforce their bargaining powers (Grossman & Hansberg, 2008, p. 1985).

Demand for enhanced skills

Most studies according to Frey and Osborne (2013) establish that technological changes in the third world increased the demand of enhanced skills, technically reducing employment chances for lower skilled personnel. With the introduction of new technologies, the widely feared arrival of mass unemployment was in the making in most parts of the developing world, and a great population slipped under the poverty line. Other studies hold that technological advancements in the labor market supported and required advanced work practices that never augured well with the existing labor-force of the time. However, ambiguities of labor findings in research on most developing countries have led to three paradoxes. At the top was the paradox of production; new technological advancements witnessed a trend that showed larger productivity at the firm level while the national level had negative drift almost killing the service sector. The second inconsistency was the subject of wage disparity; technological advancements ensured wage increment for advanced or skilled workers, while dispersion among lower skilled employees witnessed a heavy down-cut. Three, technological advancements greatly affected workers with low skills to bargain effectively for their compensation packages rendering majority of the populations in the developing world jobless, hence the upsurge in the poverty indexing (Frey & Osborne, 2013). Mechanization within the agricultural sector forced many workers out of jobs; they had to look for alternative jobs to maintain their families. Even though computerization during the 1990s in developing countries caused massive retrenchments, some jobs still required physical labor. Retrenched workers were bargaining for their wages and salaries after securing jobs in such avenues.

Effects of computing and automated services on the job market

The rise of white collar jobs

The increased use of computing and automated services in the developing countries drastically augmented the emergence of a new scion of white-collar jobs, which required employees to specialize in computerized information-processing work. Machine operating and machine monitoring roles were, therefore, some of the activities that embraced the new world order in the developing world (Frey & Osborne, 2013). Employees in many parts of the developing world as Guy (2008, p. 686) posits were required to perform a wide-range of tasks, ranging from simple word processing to data entry activities and over to high-tech operating systems, advanced software programming and hardware configuration. In spite of their growing numbers, little attention had been directed to employees with low skills and their wage earning had been largely affected (Frey & Osborne, 2013).

Elimination of low-skilled workforce

Given their ability to perform certain manual tasks such as welding and painting that could be deemed injurious to human health, robotic machines have sent packing majority of the unskilled workers from the labor market (Guy, 2008, p. 689). Since automation and computerization required a skilled workforce, the Third World Nations had to unskilled employees to create room for the young and talented scholars. Even though computerization eliminated low-skilled workforce, the process did not occur in all sectors since other departments and sectors still required manual labor. While increasing productivity as a measure of output per person-hour, automation has reduced further the number of employees needed to offer their services in many areas (Guy, 2008, p. 695). In most parts of the developing world, employment declined in the service sector with chemical, steel, fabric meatpacking, and other manual labor industries setting the stage for a new era of mass unemployment (Chang-Tai and Klenown, 2009, p. 1419). With the introduction of new technologies, the widely feared arrival of mass unemployment was in the making in most parts of the developing world, and a great population slipped under the poverty line. The age groups that were highly affected were the silent generation (1925-1945) and the baby boomers (1946-1964). The G.I generation (1900-1924) was mostly affected since they lacked basic computer skills that were essential in the newly developing nations.

New skills to match the new requirements

The new wave of technological development melted down certain skills, making other jobs. However, a new crop of fresh jobs requiring different skills and competencies suddenly sprung up. With the new opportunities requiring new skills, majority of those who had been affected by the new world order sought opportunities to learn the skills needed to be relevant in the service sector. Relevant education geared towards this new order ensured advanced college instruction in machine operation and computing. Even though the use of computers in production rendered other people jobless, the system increased efficiency in overall production in developing countries. Third World nations began to gain international recognition, as they were able to compete with other developed nations in the production industry. Although automation and computerization may have eliminated the majority of the unskilled occupations, Chang-Tai and Klenown (2009, p. 1428) opine that it necessitated a new demand for highly trained mechanical laborers and competent technical teams who could operate computerized gadgets as well as the automated machinery. As a result, Firpo, Fortin, and Lemieux (2012, p. 84) observe that the initial predictions that automation and computerization would diminish the need for individual labor have proven contrary concerning what has been happening in the developing world. Automation and computerization may be seen as strategic platforms in improving work efficiency in the service sector, but this drift has been against the whims of the common person who has been relieved of manual labor and further imposed to reduce wage earnings (Firpo, Fortin & Lemieux, 2012, p. 87).

Alterations in the worker's relation to the job

With the introduction of new technology in the service sector, the old managerial thinking that labor has to be broken down in order for the worker to utilize minimal aptitude in performing a task could be said to have been based on the wayward notion that workers were not well versed in their areas. For example, employee-employer relations at the workplace changed greatly; there are minimal face-to-face interactions at the workplaces. Here, observe Frey and Osborne (2013), the requirements in the labor practices and labor demands in different developing countries proved somewhat instructive. Guy (2008, p. 698) posits that, when full computerization was finally launched in the factories in the developing countries, the workers who were deemed less skilled were restrained from operating the moving machine, as this was the preserve of a qualified personnel or supervisory engineer. After the introduction of computers and other automated machines, job acquisition was based on skill relevancy since countries needed to adopt the new technology at the workplaces.

Changes in the office workplace

According to Frey and Osborne (2013), the introduction of computers and automated devices greatly affected the organization of work, the service sector, and production economy. Guy (2008, p. 698) argues that semi-skilled keypunch and tabulating-machine operators replaced most office staff such as bookkeepers, file clerks, library monitors and other less skilled office employees who were involved in information processing. Office automation also affected management-worker relationships during this period in history. For the middle-level employees, automation of services eliminated overreliance on office messengers since they could receive financial statements and reports from a click of a button on the computers. According to Artuc, Chaudhuri and McLaren (2010, p. 1039), automation also delivered to managers the ability to monitor and supervise the efficiency of staff workers with computer-aided gadgets such as CCTV; in a way, the management relied little on supervisory personnel. Through computerized information systems, the management, for example, could tally the number of times per hour in a day that a worker spends doing meaningful work, and even the nature of an employee’s telephone call (Grossman & Hansberg, 2008, p. 1992).

Human factors in labor provision

In the event of these developmental advances in technology, the influx of computerized and automated technologies led many to believe that office workers would operate their office duties from the comfort of their homes, as the computerized terminal would replace their manual paperwork. Given the inevitability of human labor, such expectations generally have not been achieved so far (Artuc, Chaudhuri & McLaren, 2010, p. 1044). If this dream were to be realized, then the agricultural sector could have received a rude shock. The consistent delivery of farm workers has attributed their success to their nature of humanity as "social animals" that enjoy the comradeship of other human beings in the workplace.

Disparities in the wage income structure

Computer Revolution has gone great lengths in trying to explain the overstretching wage inequality not only in the developing world but also in many established societies. Acemoglu and Autor (2011, p. 1053), for instance, report that workers with computer aptitude earned barely 10 to 15% above others with little or no computer skills. Again, the considerations are rife that computerized application in the developing world accounted for a considerable share of the influx of the employees return to class to further their computing skills. Studies relevant to this topic established that the rise in computer technologies has led to a drastic turn in the occupational configuration of the labor market share scaling the graph emphatically. Acemoglu and Autor (2011, p. 1055) explain that as the processes of automation and computerization erodes wage earnings of labor, in most cases, employees in the service sector were reallocated from their traditional labor supply to a comparatively low-skilled service careers. More precisely, research point out that from 1990 to 2000, the market share of wage distribution per man-hours in the occupational service sector grew by 30% in most developing countries after having been on a declining scale in the recent past.

Conclusion

With the increased use of computerized and automated services, net changes in employment in developing world culminated into a U-shaped grading in employment levels. This, in essence, meant that job-skill rating stretched tremendously with the decline in employment in the service sector, as well as the distribution stages and supply chains. The rapid expansion in the skilled job market can be attributed to a drastic fall in the wage payment for carrying out menial jobs by use of computer-aided devices, which complemented more rigorous and creative chores such as painting. As can be observed from the foregoing analysis, a visible reduction in manual labor, particularly in the supply chain lessened the need for manual workers in most industries. Data mining and text, for instance, improved the efficiency of field research making manual research work almost obsolete.

References

Acemoglu, D., and Autor, D. (2011). Skills, Tasks, and Technologies: Implications for Employment and Earnings. Handbook of labor economics, 4(12), 1043–1171.
Artuc, E., Chaudhuri, S. & McLaren, L. (2010). Trade Shocks and Labor Adjustment: A Structural Empirical Approach. American Economic Review, 100(3), 1008-1045.
Chang-Tai, H. & Klenow, P. J. (2009). Misallocation and Manufacturing TFP in China and India. Quarterly Journal of Economics, 124(4), 1403-1448.
Firpo, S., Fortin, M. N., & Lemieux, T. (2012). Occupational Tasks and Changes in the Wage Structure. London: Mimeo, University of British Columbia.
Frey, C. B., & Osborne, M. A. (2013, September 7). The Future of Employment: How Susceptible are Jobs to Computerization? Retrieved March 12, 2014, from http://eldis.org/go/home&id=65902&type=Document#.UyC1Ac5Me1s
Grossman, G. M. & Hansberg, E. R. (2008). Trading Tasks: A Simple Theory of Offshoring. American Economic Review, 98(5), 1978-1997.
Guy, M. (2008). The Effect of Trade on the Demand for Skill: Evidence from the Interstate Highway System. The Review of Economics and Statistics, 90(4), 683-701.