Digitization and the Future of Work
Prof. Dr. Arnold Picot
Ludwig-Maximilians-Universität München
Abstract
The performance of digital technologies accelerates at an exponential pace. At the
same time, unit costs of all kinds of digital processes such as processing, transmission
and storage of data fall near zero. In addition, due to the ongoing physical integration
and miniaturization of digital techniques, the potential of digital technologies can be
almost effortlessly deployed wherever needed. Thus, all tools of human work involving
some kind of direct or indirect use of data will become easily and flexibly available.
Similar to former industrial revolutions this upcoming new revolution is about to
change the nature of human work and life. This can be studied on three levels.
On the level of the individual workers, especially data and knowledge workers have
more degrees of freedom than ever when choosing time and place for fulfilling their
tasks. This will also and increasingly relate to physical production with flexible
decentralized tools such as 3D printing. As a result, offices and plants as locations for
carrying out one’s work assignments will become less relevant. Thereby, it is less
possible to distinguish between phases or environments of work and non-work,
between professional and private, between work and life. Work as a subset of life
must be balanced and responsibly embedded into one’s life concept. Comparative data
from various countries including Brazil show that the majority of knowledge workers
accept this blurring delineation between work and non-work.
On the level of the organization one will observe two major changes. On the one hand,
management structures within the firm will become less hierarchical and will offer
more autonomy and more holistic tasks for the employee due to the facilitated access
to data, to software tools and to network partners. On the other hand and as a
consequence of falling transaction and communication costs, more subtasks can be
outsourced to firms, specialists and freelancers outside the organization.
Crowdsourcing platforms enable companies to tap the competencies of specialized
suppliers, workers and other partners at low coordination costs on a global scale.
These trends facilitate gains in efficiency, quality and speed of organizational task
fulfillment. However, they also raise new questions and challenges.
On the level of the economy, far reaching changes, especially for labor markets and
employment, can already be observed and are prone to exacerbate in future. As a
consequence of the unprecedented scope of digital technologies to automate and to
support human work processes, many traditional jobs are at risk and future demand
for labor may shift in a specific direction, referred to as polarization. Jobs requiring
very high cognitive competencies, experience, and expertise will be in higher demand.
Jobs requiring rather simple, but non-recurring manual routines and/or social
interaction (such as gardening or tidying hotel rooms or manual craft or care for the
elderly) that are, for the time being, not automatable will be in higher demand as well.
However, the broad middle group of white- and blue-collar workers will experience
considerably less demand. This causes severe changes to the labor market and it
creates challenges for all levels of education and training. International comparative
studies clearly support these tendencies. It remains an open question whether new
jobs and markets will emerge through digitization beyond our traditional economic
structures that will make up for the envisaged employment losses caused by
digitization.
Short Biography
Arnold Picot is Professor of Business Administration at the Munich School of
Management (Ludwig-Maximilians-University – LMU) in Germany and Director of the
Research Center for Information, Organization and Management. He has taught at
universities in Germany (University of Hannover, Technical University of Munich, LMU),
Switzerland (St. Gallen), France (Strasbourg) and the United States (Stanford,
Georgetown). His research focuses on the interdependencies between information
and communication technologies and structures of organizations and markets. His
theoretical work is complemented by various research and consulting projects in the
industry and the public sector. He is a member of the Bavarian Academy of Sciences
and of acatech – National Academy of Science and Engineering. He was and is a
chairperson or member of advisory boards to various institutions including the German
Research Foundation (DFG); the Bavarian State Ministry of Education and Culture,
Sciences and the Arts; the German Federal Ministry for Education and Research; the
German Federal Ministry for Economics and Technology; the Federal Network Agency
(Bundesnetzagentur); Fraunhofer-Gesellschaft; Centre for European Economic
Research
(ZEW);
Wissenschaftliches
Institut
für
Infrastruktur
und
Kommunikationsdienste (WIK); Schmalenbachgesellschaft für Betriebswirtschaft;
Verein für Socialpolitik; German Academic Association for Business Research; and
Münchner Kreis e.V. Picot is coeditor of several scientific journals and maintains close
relations with the business world e.g. as member of several supervisory boards in
public corporations. His publications can be found here.