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Rapid evolution of the global economy presents new opportunities and new challenges to the achievement of full employment. Social organization is intended to foster the livelihood and development of its members, but the social organization that was adequate or effective in an earlier period has not evolved quickly enough to keep pace with the dramatic changes that are occurring in society today. Unemployment is one result.
Trade, technology and competition from low wage countries are often cited as explanations for rising levels of unemployment, but these factors are hardly new to the world economy, nor in balance are their impacts detrimental to global full employment. During the past century the US economy has been one of the most open. Even a hundred years ago average wage levels in America were already 10 times higher than in Europe. These rising wages have fueled an ever-increasing demand for goods and services, which has spurred creation of ever more jobs. No other country has so readily and fully embraced new technologies, yet over the past century employment in the US has grown more than four fold, because the social organization has remained sufficiently adaptive and responsive to the required changes.
Employment generation is a natural process of social development. Human beings bring with them into the world an array of needs that present employment opportunities for others to meet. Were it not so, the world could not have sustained a more than tripling of population over the past century. Yet, the actual process of employment generation remains largely unperceived except in the organized sectors of economy. India, for example, is adding more than seven million new workers to the labour force each year with little or no perceptible increase in unemployment rates, yet the nature and type of jobs being created is difficult to measure and very poorly understood since 92% of total employment is in the informal or unorganized sector. An understanding of this natural process and the jobs it is creating is essential for bridging the gap between supply and demand for employment.
Rapid evolution of global society has opened up vast opportunities to expand and raise the quality of employment opportunities while presenting challenges to existing social structures. This evolution is spurred by a multitude of factors interacting with one another in complex ways:
1. Population: Demographic shifts in both industrialized and developing countries are dramatically altering the global labor pool. The flattening of population growth and aging of population in the West has slowed growth of the labor force and is expected to generate a severe shortage of workers in coming years. Continued growth of global population means rising demand for goods and services among high growth populations. Growing numbers of retired workers means greater demand for services by the aged coupled with a lower proportion of workers to contribute to social welfare programs to support them.
2. Social Aspirations: Rising expectations, which is the fuel for all human development, is altering the pattern of employment globally. Rising aspirations among youth and the middle class are shifting the pattern of employment from agriculture and manual labor to industry and white-collar jobs in developing countries and from manufacturing to service jobs in the industrialized countries. India is experiencing an increasing scarcity of farm workers in more prosperous rural areas, while manufacturers in the USA find it increasingly difficult to entice the young into blue-collar work on the factory floor. Rising expectations in developing countries are spurring the young to greater enterprise and unleashing an unprecedented appetite for consumption at the very same time that the achievement of stable prosperity and social security in many industrialized nations has generated a greater sense of satisfaction and complacency among those whose forefathers struggled for economic survival. Rising demand for education, medical care, tourism and entertainment is spawning new jobs everywhere. A huge deficit in technical manpower in the West is being increasingly met by import of manpower or export of jobs because too few Western youth are opting for the rigors of engineering and hard sciences. The apparent change in employment markets mirrors a subtle but significant change in social attitudes.
3. Globalization: Globalization of markets has resulted in rapid expansion of international trade and a shifting of jobs to lower cost countries and closer to end user markets. In combination these factors have increased employment opportunities in some sectors for most countries and reduced job opportunities in others. Since its entry into the European Community 30 years ago, Ireland has risen from being the poor man of Europe to the second highest in per capita GDP as a result of this movement. Economic growth associated with rising levels of employment has spurred consumer demand and stimulated further job growth both nationally and internationally, as dramatically illustrated by China over the past few decades. For example, an American manufacturer who is struggling to attract new skilled workers is simultaneously pressurized to expand production by the increase in oil drilling activity in Asia. Localization of production has also resulted in the shifting of production from home country to the place where they are consumed. This process works in both directions. Companies such as Honda, BMW, Skoda and Ford are setting up or expanding production facilities in India, while Korean Hyundai and Samsung and India’s Infosys and Ranbaxy Pharmaceuticals are expanding their manufacturing operations in Europe and North America.
4. Technology: Technology creates jobs and it destroys jobs, but overall it creates many more jobs than it destroys and creates better quality jobs than those it displaces. Much of its positive contribution remains unperceived because it permeate the entire society, the way computers and telecommunication technologies are increasing the number and speed of human interactions in every field, which is a signal characteristic of social development. Advances in Information Technology are creating the first truly global work place in which work is no longer bound to a specific location. This has stimulated rapid growth of employment opportunities in some sectors and a shifting of jobs to non-local workers in others. While large scale export of jobs was previously restricted to manufacturing, it is now taking place in a range of service industries as well. Greater global access to information is stimulating new job opportunities and eroding traditional monopolies. For the past decade, the US economy, for example, has been increasingly unable to meet the skyrocketing demand for IT professionals. After initially resorting to large scale of import of qualified manpower, American firms are increasingly creating new jobs overseas. IBM is now the largest employer of software engineers in India. Technology is also spurring a rapid expansion of Internet-based self-employment opportunities as well as a shift of work from workplace to home.
5. Organization: Organizational changes resulting from the globalization of production, supply chain management and service delivery, exemplified by the trend toward outsourcing, have opened up new employment opportunities for college educated and technically trained manpower. While concern has been raised about loss of jobs in high wage industrialized countries, much of the outsourcing represents creation of new job opportunities as a result of expanded activities or is spurred by a shortage of qualified in the country of origin. Oxford University Press is typesetting more than 2000 books a year in Pondicherry, South India, from where many of them are sent for printing in China and distribution around the world. Self-help groups and micro-finance (which have expanded coverage 10 fold in less than a decade), contract farming, credit cards, distance-learning, global R&D and product design, tele-medicine, e-governance, global supply chain management, e-commerce, business and knowledge process outsourcing, and blogs illustrate the range and plethora of organizational innovations that are multiplying transactions between people and transforming the way we carry out work.
6. Skills: Human resource development is dramatically elevating the education levels, vocational skills and competence of the global workforce. Yet at the same time the increasing demand for more educated, skilled and technically qualified workers is expanding the gap and mismatch between the capacities of the workforce and the needs of society. A shortage of job opportunities coexists alongside an increasing shortage of employable skills. A recent World Bank study confirms that the skills shortage prevails in developing countries as well. Vocational training systems in many countries remain grossly inadequate to equip new workers with requisite skills. In India, for example, only 5% of the workforce has undergone formal vocational training as compared to 95% in South Korea. In addition, outmoded perceptions, attitudes and curriculum focus on traditional forms of salaried employment which are in short supply, while expanding opportunities for self-employment opportunities remain largely ignored. The failure of educational and training systems to rapidly respond to changing social needs and attitudes has aggravated the mismatch, resulting in high levels of unemployment among educated youth.
All these factors combine and interact in complex ways to influence both the demand for qualified workers and the access to gainful employment opportunities. For instance, technological advances that facilitate outsourcing of service jobs are also increasing self-employment opportunities, stimulating economic growth and import demand, and providing new platforms for the delivery of quality education and vocational training to more people at lower cost. Even soaring cost of petroleum can have salutary effects on employment. A plan has been developed for generating tens of millions of new rural employment opportunities in India by producing renewable bio-mass power and bio-fuel energy sources from agriculture.
These factors present challenges and problems for job seekers in societies which have been slow to adapt to emerging trends. They open up unprecedented opportunities for those who perceive and respond to the dynamics of change. These factors are not limited to economics. They encompass the entire gamut of social, technological, educational and political development issues. Therefore, an effective response to these emerging trends cannot be confined to economic policy or any other single field of activity. In essence, global society is undergoing rapid evolution and the structures of that society are not adapting rapidly enough to fully meet its needs or avail of the opportunities it presents.
Countries are responding to this process in myriad ways, including changing laws and social policies, reducing barriers to trade and labor movement, geographically expanding and altering the structure of enterprises, investing to develop the telecommunications infrastructure, expanding and altering educational systems, adapting technology to change the nature of work, the methods by which it is carried out and the ways it which products and services are delivered.
Under conditions in which society expects each individual to provide for their own livelihood, there is irrefutable logic to the argument that employment must be recognized as a fundamental human right. This reasoning has already prompted India, the world’s second most populous nation, to recently pass legislation guaranteeing the right to employment and calling for public initiatives to enforce that right.
A comprehensive solution to the employment challenge necessitates a better understanding of the social development process and the process of employment generation which is one of its natural functions. Social organization is the determinant of employment generation. The key lies in better understanding, better design and faster development of that organization to keep pace with global change. Given the requisite knowledge and commitment, global full employment is an achievable goal.
The objective of this project is to identify effective policies and strategies by which countries around the world can respond proactively and constructively to the emerging opportunities and challenges of employment in a global society.