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Focus on Private Sector: New tech shouldn’t mean no jobs

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Speed read

  • New research on southern Africa warns automation is producing mass joblessness

  • It urges dropping full employment as a goal, and topping up incomes with cash

  • But there are other ways that automated business can support local livelihoods

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The development anthropologist James Ferguson published a new book last week: Give a Man a Fish. [1] Drawing on research conducted across southern Africa, Ferguson argues the world has entered a new economic era in which many people, including able-bodied, working-age people, may not find paid work for large stretches of their lives.

The sources of this are twofold: demographic changes are increasing the number of working-age people in developing countries, while technological advancements that enable automation are shrinking the employment footprint of many sectors.

The first trend is well-documented, the latter poorly understood. [2] Many see industrial automation as a problem of de-industrialising rich countries, where labour shed by a shrinking manufacturing sector is eventually transferred to service industries. But in southern Africa automation is emerging as part of industrialisation, keeping workers from entering the labour force to begin with.

The region’s main employment sectors are agriculture, which is automating slowly, and mining, which is automating rapidly. [3, 4] These sectors are not absorbing new generations of workers, while also cutting jobs for older workers. I have interviewed mining executives who see this not as a temporary crisis, but as an industry goal: to employ fewer skilled people by automating the extraction process.

Ferguson’s remedy is to abandon full employment as a development goal. Instead of trying to get everyone into work so they can support themselves, he argues we should adopt a ‘politics of distribution’ to guarantee minimum incomes irrespective of employment status.

Many southern African countries have adopted cash payments and basic income programmes along these lines —  more than 30 per cent of South Africa's population receive such payments —  and Ferguson cites research showing these programmes are an effective anti-poverty tool. [5]

But the implications of this vision are troubling. Ferguson conceives an economy where companies are more profitable than ever and employ some people some of the time, yet play no essential function in society. While this might be a long-overdue break from private sector-led development in which governments are too eager to do corporations' bidding, the prospect of profitable, powerful companies extraneous to local development and unmoored from social obligations is equally scary.

If Ferguson is right, and we are a headed to a future where multinationals provide fewer and fewer jobs, we must ask: what role should businesses play?

I envisage three possible roles. First, somebody has to make the machines. While most of the heavy machinery used by agribusiness and mining is made in Europe and North America, major companies could make efforts to support local suppliers in the developing countries where they are laying off workers.

In the short-term, this might mean purchasing smaller or simpler parts from local manufacturers. Long-term, companies might take steps to invest in engineering education, or lend start-up capital to African manufacturers of larger machines. They might also use their leverage with Western machine manufacturers to encourage the establishment of African plants.

Second, as Ferguson documents, the unemployed of southern Africa aren't wholly without income. Many are engaged in the informal economy, earning limited or erratic income that government payments are meant to supplement. Businesses could support these would-be entrepreneurs with training or credit access.

But even with such schemes, big industry will never plug the labour gaps created by automation. Indeed, Ferguson's radical vision of a low-labour future offer an explanation for the dramatic rise of 'corporate social responsibility' efforts in southern Africa and beyond. Perhaps businesses see these as one way to secure social legitimacy in environments where they are no longer creating jobs.

Ferguson argues that employment dynamics in these societies are harbingers of where others might be headed, rich as well as poor. Given that scholars have raised concerns about automation in service-oriented developed economies — warning the computerisation of sectors like finance, media and retail threatens employment here too — we would all do well to consider the implications of the southern African experience. [6]

Maha Rafi Atal is a PhD candidate at the University of Cambridge, where she is researching the political effects of multinational firms acting as public service providers in the developing world. She was previously a journalist, including at Forbes, where she covered the intersection of business, development and international affairs. You can contact Maha on [email protected] or follow her on Twitter: @MahaRafiAtal


References

[1] James Ferguson, Give a Man a Fish: Reflections on the New Politics of Distribution (Duke University Press, 2015)
[2] Sam Jones Youth unemployment 'a timebomb' in developing countries, UK MPs say (Guardian, 24 March 2015)
[3] Clive Blacker, Machine Control & Automation (Precision Decisions Ltd.)
[4] Dudley, J.J., and McAree, P.R., Why the mining industry needs a reference architecture for automation initiatives (IEEE/ASME International Conference on Advanced Intelligent Mechatronics, 2013)
[5] The South African Child Support Grant Impact Assessment (Department of Social Development, South African Social Security Agency and UNICEF, 2012)
[6] Carl Benedikt Frey and Michael A. Osborne, The future of employment: How susceptible are jobs to computerisation? (Machines and Employment workshop, Oxford University, 2013)

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