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ICT Innovation and Jobs [very shaky]

My wild imagination is not special. Economic recovery, if any, would be of jobless nature because of ICT innovation. First of all, some news: "U.S. Heads For Third Straight Jobless Recovery" from NPR.  Let me quote some.

The idea of a jobless recovery seemed strange to economists at first.

After most every modern recession, once the economy began expanding and gross domestic product rose again, employers began adding jobs a few months later.

Then came the recession of 1990-91. As that downturn ended, says economist Erica Groshen, statistics from the labor market didn't make sense. The economy was growing, but the jobs weren't coming back. "The real question was, 'Well, is some of the data wrong in some way?' " remembers Groshen, who works at the Federal Reserve Bank of New York.

Sure enough, the data back then were correct. Unemployment continued to rise for another year after the economy stopped shrinking. The same pattern appeared after the recession of 2001.

Groshen asked the library to research the phenomenon. That led to an unsettling find: The first documented use of "jobless recovery" appears in The New York Times in the mid-1930s, in the Great Depression.

A Shifting Landscape

Faced with recessions in decades past, Groshen says, employers typically waited for better times and then called people back to work. In the two recessions after 1990, the labor market seems to have undergone a structural shift.

"In the more recent recessions, it seems that we have more employers using this as an opportunity to change what they are doing in a more basic way," she says. "They are closing inefficient facilities. They are culling their workforce. They are changing their production process."

That meant businesses became more efficient, which explained the economic growth. It also meant the workers had to find different jobs, a process that takes time. Those two factors combine for a jobless recovery.

Well, so there is some pararell going on.  In the Great Depression, there is communication innovation like mail and telegraph.  Some even called it the Victorian internet.  Now, there is communication innovation called internet. 

The revolution in communication technology could have a mixed result, as Garicano argued in a number of papers.  Garicano and others argue that there is a distinct difference in information technology and communication technology.  The examples of the former are CAM/CAD and economic planning tools.  I would say MS-Excel fairly represents this type of technology.  Garicano and others argue that this type of technology "empower" the holders of the technology, and push for decentralization. 

In the case of communication technology, the story is different.  This technology is represented by internet, email, (and MS-Word, I would say).  This type of technology facilitates centralization, Garicano and others argue.  Garicano and others argue that this type of techonology helped to create big corporations in early 20 centuries. 

Let me simplify this argument.  MS-Word is a tool for employment, while MS-Excel is a tool for self-employment.  If you want to be your own boss, you should have some analytical capability.  If you want to be employed, you need to be fluent in communication tools.  We all know that cellular phones are "part-time employment tools" for employers.  If you want to employ others or yourself, you need an analytical skill.

Garicano and Rossi-Hansberg argue that progress in communication technology give some extra life to big corporations.  However, the big corporations don't grow much, so less job opportunities for the whole society. 

Gondo in Ohtsuka and Kurosaki eds. found there is a substantial gap between progress in education and economic growth.  He attributed it to "threshold" effect.  You need a critical mass to make a change.  However, casual reading of the life of bureaucrats in Edo period reminds us that communication skills are very high among Edo bureaucrats.  Perhaps, the important message is that literacy is the aggregate of both information technology (numeracy and chart/graph analysis) and communication technology (reading and writing).  The holder of information technology survives Edo period into Meigji era, as vividly Isoda described.  As Garicano and others argued, what matters for development is not how many units of labor are used, but how these units are organized, and how this changes over time.  ICT matters a lot to economic growth in a peculiar way.

"Girls and boys, learn MS-Word and other internet tools to be employed, and learn MS-Excel and other analytical tools to employ yourself."

If you are analytical already, what would be the next step in self-training?  Perhaps, your next goal is adequate multitasking.  Current information technology which is "asynchronous" allows you to do multitask.  Excessive multitasking do harm on you, so you have to control yourself.  But, your productivity goes up relying on others for routine or soon-to-be-routine work.

PISA 2009 study is shocking regarding the graph-plotting skill.  The analytical skill of future Japanese could be very low.

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