group assignment introduction to microeconomics

Occupations that require physical labor and repetitive tasks are most vulnerable to automation.. Although technological innovation will cause labor disruptions, the long-term outlook rem

INTERNATIONAL UNIVERSITY — HCMC UNIVERSITY SCHOOL OF BUSINESS ADMINISTRATION

GROUP ASSIGNMENT INTRODUCTION TO MICROECONOMICS

SEMESTER-I (2023-2024) GROUP 7 - MON 789 CLASS

Group Members:

Võ Ngọc Phúc Nguyên - BAFNIU21514

Huỳnh Thị Kim Lộc - BAFNIU21382 Trần Hữu Thành - BAFNIU20416 Phạm Thị Yến Phương - BABAIU20591 Phan Thị Lệ Hoa - BAFNIU21445

Nguyễn Thi My Hang - BAFNIU21442

Tran Tuan Anh - BABAWE21724

Lê Thành Nhân - BABAWEL9377

Leeturer: Mr Le Quoc Thai

TOPIC: What are the roles of technological advancements on the future of

work? What are the impacts on the labour market?

Technological advances in the future are changing as artificial intelligence

applications, automation of the supply chains, and robots In this essay, I will examine these technologies’ potential impact on labor markets and summarize the key

information

Rapid technological innovation will likely displace many low and medtum-skilled routine jobs over the next decade Occupations that require physical labor and

repetitive tasks are most vulnerable to automation Grate for wage polarization and Income inequality exacerbate Many workers who do not have the education and skills may face permanent job loss and a decline in their status

However, technology is also expected to generate new labor demand and contribute to job growth in emerging occupations The introduction of new technologies has not only spurred innovation, and productivity but also leads to economic expansion, and employment opportunities Some new jobs may witness the emergence that requires advanced technological expert skills as well as creative, social, emotional, and higher cognitive capabilities Moreover, the workers who can adapt to new technologies in their work will be at an advantage Instead of adapting to work in the future, it

requires extensive retraining and skills development programs for displaced

employees With the core essential in the length of the breadth of the world, it invests the employee in STEM education, technological literacy, creative problem-solving, and lifelong learning Facilitate the process of labor market transitions and reduce skill mismatches through implementing effective policy responses

Although technological innovation will cause labor disruptions, the long-term outlook remains optimistic if workers acquire the education, knowledge, and nimble skills

needed to work alongside machines With proactive policymaking, technological

advancements create high-quality job growth and boost prosperity Managing this

transition equitably and inclusively remains a major challenge and obstacle

As the tide of technological innovation continues to rise, their profound impact

on the future of work becomes increasingly clear Advances in automation, robotics and artificial intelligence are fundamentally reshaping the landscape of the labor

market, changing not only the types of jobs available but also the very nature of work

At the heart of this transformation is the specter of job mobility As machines become adept at imitating and often surpassing human abilities in the areas of data processing and repetitive tasks, the likelihood of certain roles becoming obsolete will increase increase This reality forces us to acknowledge the bifurcating impact of

technology on the labor market While it erodes demand for specific skill sets, it

simultaneously drives the emergence of new opportunities in sectors that were

previously unimaginable For example, the growing e-commerce landscape has

increased the demand for logistics and freight forwarding experts, while the growing field of artificial intelligence has created a wealth of new, job-driven roles technology

as the center

Therefore, it is important to recognize that technological advances pose a

twofold challenge: adapting to shifts and taking advantage of new opportunities The responsibility falls not only on individual workers to cultivate flexible skills and

implement lifelong learning, but also on policymakers and educators to create

favorable conditions benefits reskilling initiatives and fosters a future-proof

workforce Through proactive interventions and collaborative efforts, we can navigate the currents of technological change and ensure that the future of work is defined by shared prosperity and human flourishing people, not by displacement and despair The roles of technological advancements on the future of work

Automation and Task Substitution

a Machines substituting for humans in routine manual and cognitive tasks

It is possible to program machines to carry out manual, rule-based, repetitive

operations that humans often conduct This covers standard procedures like data

extraction and entry RPA can assist in lowering errors and boosting productivity for these jobs

Robots and machines are frequently utilized in manufacturing and other industries to carry out manual activities like packaging, welding, and assembly This lowers the possibility of injury from repetitive jobs while simultaneously increasing production speed

Chatbots and virtual assistants interpret and react to user inquiries using machine

learning and natural language processing Routine customer support requests can be handled by them, freeing up human agents to work on more complicated problems

b Impact on job design and task allocation

- Machines are frequently used to do repetitive, routine operations that are easily

mechanized This may cause some jobs or responsibilities that are typically carried out

by humans to become redundant

- Automation may change the requirements for jobs involving manual, rule-based

tasks like data entry, assembly line labor, or basic customer support Automation has the potential to replace some jobs, but it can also create new ones Developing,

maintaining, and supervising automated systems frequently calls for qualified human labor

- As technology develops, new employment opportunities arise in fields that were

previously unfeasible, such as controlling and optimizing automated operations

Complementation and Creation of Non-routine Tasks

https://www.dni.gov/index.php/gt2040-home/gt2040-deeper-looks/future-of-work https://www.oecd-ilibrary.org/sites/ec2a9345-en/index.html?itemId=/content/

component/ec2a9345-en

a Technology complementing and creating new non-routine cognitive and social tasks

Technology plays a crucial role in complementing and creating new non-routine

cognitive and social tasks, offering numerous benefits to human workers Firstly, it enhances productivity and performance in specific activities For instance, advanced software programs and automation tools can streamline repetitive tasks, allowing

workers to focus on more complex and value-added activities Studies have shown that technology-driven automation has led to significant improvements in efficiency and output in various industries, such as manufacturing, healthcare, and finance

Moreover, technology has the potential to unlock new sectors and work opportunities that were previously inconceivable The emergence of innovative technologies, such

as artificial intelligence (AI), machine learning, and blockchain, has paved the way for novel industries like autonomous vehicles, virtual reality, and cryptocurrency These new sectors not only create jobs but also require workers with specialized skills in areas like data analysis, algorithm development, and cybersecurity

Technology plays a vital role in aiding problem-solving, decision-making, and

creative thinking in non-routine cognitive tasks Advanced algorithms and data

analytics tools can process vast amounts of information, enabling workers to make informed decisions quickly For example, in the healthcare sector, Al-powered

diagnostic systems can assist doctors in accurately identifying diseases and

recommending appropriate treatment plans based on patient data This synergy

between human intelligence and technological capabilities can significantly enhance outcomes and improve overall performance

Additionally, technology facilitates various social duties, such as customer interaction, communication, and teamwork With the advent of communication platforms, like video conferencing and instant messaging, geographical barriers are no longer a

hindrance to effective collaboration Remote work has become more prevalent,

allowing individuals from different locations to collaborate seamlessly Moreover, chatbots and virtual assistants have become increasingly sophisticated, enabling

businesses to provide personalized customer support and engagement on a large scale Artificial intelligence (Al)-driven chatbots can answer standard consumer questions and offer basic assistance, freeing up human customer care agents to handle more

complicated and specialized problems By speeding up reaction times and offering round-the-clock support, this technology enhances social jobs like customer

engagement However, it also gives human workers new responsibilities including monitoring and training Al systems, evaluating consumer data, and offering

individualized help

One specific example of complementation and creation of non-routine tasks is in the field of healthcare The connection between nurses and patients still needs to be made easier to automate, even though various medical diagnostic procedures have been

made automated, which has eliminated some tasks for medical professionals While bedside machines have taken over certain nursing chores, nurses still play a crucial role in patient care and interaction that cannot be mechanized In a similar vein,

although modern instruments help surgeons work faster and more efficiently, people still carry out the actual surgical operations In this instance, technology generates new duties and employment prospects while enhancing and complementing the work of healthcare professionals

b Increased productivity, quality, and innovation through technology

The integration of technology in the workplace has led to increased productivity,

improved quality, and enhanced innovation One significant benefit is the automation

of repetitive and mundane tasks, which allows workers to focus on more complex and high-value work Studies have shown that automation can significantly boost

productivity by eliminating human errors and accelerating the pace of operations For example, in manufacturing industries, the implementation of robotics and automated assembly lines has led to faster production cycles, reduced downtime, and increased

output

Furthermore, technology plays a crucial role in raising the standard of work by

minimizing mistakes, increasing precision, and providing immediate feedback

Advanced software programs and tools can perform tasks with a high degree of

accuracy, minimizing the risk of human error For instance, in the field of graphic

design, computer-aided design (CAD) software enables precise and error-free

creations, resulting in higher-quality outputs Real-time feedback mechanisms, such as spell-checkers and grammar-checkers in word-processing software, help ensure the accuracy and professionalism of written documents

In addition to productivity and quality improvements, technology fosters innovation within organizations By providing employees with access to a wealth of data,

analytical tools, and communication channels, technology enables collaboration and idea-sharing For instance, cloud-based platforms and project management tools

facilitate seamless collaboration among team members, regardless of their physical location This allows for continuous innovation, as employees can work together in real time, exchange ideas, and collectively generate new insights and solutions The availability of data analytics tools also empowers employees to make data-driven

decisions and identify new opportunities for improvement and growth

In the healthcare sector, the adoption of electronic medical records (EMRs) has

streamlined administrative tasks, reduced paperwork, and improved the accuracy of patient data This has resulted in enhanced productivity for healthcare professionals, enabling them to spend more time on patient care Similarly, in the software

development industry, the use of agile methodologies and collaborative tools has

facilitated iterative and innovative software development processes, leading to higher- quality products and faster time-to-market

Polarization of Labor Markets

The polarization of labor markets refers to the widening gap and imbalance between different types of job opportunities and their corresponding wages and demand This phenomenon has been observed across various economies and can be characterized by several trends:

a Stagnation of low-skill jobs

One aspect of labor market polarization is the stagnation of low-skill jobs As

technology advances and automation becomes more prevalent, many routine and

manual tasks that require low skills are being replaced or eliminated This leads to a decrease in the number of available low-skill jobs

b Decreased demand for middle-skill workers

Another characteristic is the decreased demand for middle-skill workers Jobs that used to require moderate levels of education and skills are increasingly being

automated or outsourced This leads to a decline in the number of middle-skill job

opportunities and can result in lower wages for workers in these positions

c Increased value and demand for high-skill workers

On the other hand, there is an increased value and demand for high-skill workers Jobs requiring specialized knowledge, advanced technical skills, and higher levels of

education continue to be in high demand These positions often offer higher wages and better job security due to the scarcity of individuals with the required expertise

d Rising wage inequality

Labor market polarization also contributes to rising wage inequality As low-skill jobs stagnate and middle-skill jobs decline in demand, the gap between the wages of low- skill and high-skill workers widens This leads to an increase in wage inequality,

where high-skill workers tend to earn higher wages while low-skill workers struggle

to find well-paying employment

One specific example of labor market polarization is the loss of routine manual

occupations in some US states For example, between 1990 and 2016, the employment shares of regular manual jobs decreased significantly in states like North Carolina, South Carolina, and West Virginia Changes in the industry structure, automation, and outsourcing are some of the reasons for this drop On the other hand, due to the

growth in the oil business, states like North Dakota saw an increase in the

employment shares of regular manual jobs

_

Employment Share of Manual Routine Occupations

Employment Share Difference

I 2.899078

-12.57725

NOTE: 2016 represents the sum of employment in the years 2015 and 2016

SOURCES: IPUMS-ACS, IPUMS-USA and authors' calculations

The impacts on the labor market

Job Design and Task Allocation

a Changes in job design due to automation and complementation

Think of a job as a set of tasks that require various types of skills New technology raises relative employee productivity in some tasks, creates new tasks, and replaces employees in other tasks Firms respond by changing job design—the mix of tasks assigned to workers—and subsequently their demand for workers with different skills Automating tasks (in machinery or software) has several advantages It reduces

variation since machines tend to perform identically every time This lowers

uncertainty and helps improve the quality of decisions, products, or services

Machines, and particularly computers, often generate large economies of scale Firms can avoid the complexities of managing employees, including conflict, incentive

problems, and absenteeism Therefore, if the cost of automating a task falls far

enough, firms are likely to automate that task Of course, costs of computing have

fallen rapidly, while computer capabilities have risen rapidly Thus, computerized

automation has accelerated in the last three to four decades

b Shifts in the mix of tasks assigned to workers

For jobs that are mostly automated, managers tend to make most or all decisions and workers simply perform their prescribed tasks This is because much of the process has already been optimized, so the worker can add little new knowledge, and few

decisions or changes need to be made These jobs usually require few skills, involve

only a few repetitive tasks (which are too costly to automate yet), require little

thinking, and therefore tend to have low intrinsic motivation By contrast, jobs that are complemented or added by technology tend to require more skills, including problem- solving and social skills They tend to make more use of decentralization so that

employees learn, and then develop, test, and implement ideas and solutions As a

result, such jobs have high intrinsic motivation Consistent with these ideas,

investment in ICT and research and development are positively associated with more enriched job designs, large-scale organizational change, continuous improvement, and greater competition

Example:

Automation and complementation have altered the nature of medical technicians’ jobs

in the healthcare sector With the use of cutting-edge technology, several diagnostic procedures, such as blood tests and imaging scans, have been automated The

requirement for medical technicians to carry out these particular duties is eliminated

by this technology However, the job description for medical technicians has changed

to emphasize more duties that call for their knowledge, like interpreting and

evaluating test data, troubleshooting equipment, and offering technical support to

medical experts

Skill Requirements and Workforce Composition

a Changing skill requirements due to technological advancements

Technological advancements have a significant impact on skill requirements in the workforce As new technologies are introduced and integrated into various industries, the demand for specific skills may increase or decrease For example, the rise of

automation and artificial intelligence has led to a greater demand for workers with skills in data analysis, programming, and machine learning On the other hand, certain manual or repetitive tasks may become obsolete, reducing the need for workers with those particular skills

b Implications for the composition of the workforce

The changing skill requirements due to technological advancements can effect the

composition of the workforce in several ways:

1 Upskilling and reskilling: With the emergence of new technologies, workers may need to acquire new skills or upgrade their existing skills to remain

employable This can lead to a shift in the composition of the workforce as

individuals invest in training and education to meet the evolving skill demands

2 Job displacement: As automation and technology replace certain tasks, workers

in those roles may face job displacements This can result in a transition of the workforce away from those occupations and potentially lead to a rise in

unemployment or a need for workers to seek employment in different

industries

3 New job opportunities: Technological advancements also create new job

opportunities that require specialized skills As industries adopt new

technologies, they may require workers with expertise in operating,

maintaining, and managing those technologies This can lead to the emergence

of new occupations and a demand for workers with specific technical skills

4 Skill gaps: The rapid pace of technological innovation can create skill gaps in the workforce Industries may struggle to find workers with the required skills, leading to a shortage in certain areas This can impact productivity and hinder economic growth

Example:

The banking and insurance industries are one particular illustration of how

technological improvements are altering the skills needed and the makeup of the

workforce It is anticipated that as automation and Al become more commonplace, there will be less need for individuals with fundamental cognitive abilities like data entry and processing However, there will be a greater demand for technology

specialists and professionals, as well as jobs involving management and consumer contact The need for social and emotional intelligence in the industry will rise sharply

as a result of this change

Inequality and Displacement

a Impact on wage inequality and income distribution

The growth of sophisticated technologies has led to an increased demand for highly skilled workers, particularly in industries such as IT, engineering, and data science As companies strive to innovate and stay competitive, they require individuals with

specific knowledge and expertise in these areas Consequently, high-skilled workers may experience a boost in pay as their expertise becomes increasingly valuable in the labor market

Conversely, low-skilled jobs that involve repetitive tasks and are easily automatize face the risk of decline in pay Industries reliant on manual labor, such as

manufacturing and retail, are particularly vulnerable to automation, which could lead

to downward pressure on wages for low-skilled workers

The expansion of both low-paying, service-oriented professions and high-paying,

knowledge-intensive jobs contributes to job polarization, a phenomenon where the middle-class workforce diminishes, and economic inequality rises While technology creates opportunities for business owners to thrive, successful ventures often result in substantial profits However, not everyone has equal access to entrepreneurship

opportunities, exacerbating income disparities

Furthermore, the impact of technology on income distribution is closely tied to

disparities in skills and job opportunities While high-skilled individuals in

technology-related sectors may see an increase in salary, those with limited training or access to education and job opportunities risk falling behind This widening gap

underscores the importance of addressing inequities in access to education, training, and employment opportunities to ensure that the benefits of technological

advancements are more equitably distributed across society

b Challenges faced by displaced workers, particularly older and credit-

constrained individuals

The rapid pace of technological advancement can render certain skills obsolete, posing challenges for older workers trying to stay relevant in the labor market As the

demand for new, tech-related abilities grows, older individuals may struggle to

acquire the necessary skills to remain competitive Moreover, automation technologies

threaten to replace routine tasks, impacting jobs traditionally held by older workers with extensive experience in particular roles

In the event of layoffs from automated industries, older employees may face limited options for reemployment, particularly in more established fields where their skills may no longer be in demand Transitioning to new industries, especially those

requiring advanced IT expertise, can prove daunting for individuals lacking relevant skills

Furthermore, the rise of remote work facilitated by technology presents additional

hurdles for senior employees less familiar with digital communication tools and

remote work procedures Digital job search techniques and online employment

platforms may pose challenges for older workers unaccustomed to using digital

interfaces The shift from traditional to online recruitment methods may exacerbate the difficulties faced by those less adept at navigating digital technologies

Example:

The experience of older workers in economic recessions is one particular illustration

of how inequality and displacement affect pay disparity and income distribution

Older workers may be more vulnerable to losing their jobs during recessions because

of things like corporate reorganization or downsizing Because of this, it could be

difficult for them to find new jobs paying the same salary, which would increase the wage gap between older and younger workers Increased income and pay

discrepancies in the job market may result from this

Market and Tax Incentives

a Influence of market and tax incentives on the pace of automation

The pace of automation is influenced by market dynamics and tax incentives, which play significant roles in shaping businesses! decisions In a competitive market,

businesses are driven to increase productivity and reduce expenses Automation

becomes a strategic response to these market forces, enabling companies to produce goods and provide services more competitively Meeting customer expectations and gaining a competitive edge often necessitates the implementation of automation

technology to deliver quicker, more affordable, and innovative goods and services Furthermore, automation allows businesses to effectively scale their operations,

meeting increasing demand without proportionately increasing labor expenses This scalability is particularly appealing in markets where rapid growth is essential for

success and market share expansion

Tax incentives can serve as a catalyst for companies to invest in automation

technology By reducing the overall cost of purchasing and deploying these solutions, tax incentives strengthen the financial argument for automation For example, when tax obligations are reduced or when credits are available for expenses related to

automation, companies find it more financially advantageous to invest in automation technology Governments can also encourage foreign investment by offering tax

Incentives, attracting businesses to establish automated facilities within their borders This not only benefits the businesses but also enhances the nation's ability to compete

on the international stage

Moreover, governments may provide tax breaks to businesses that continue to employ highly qualified individuals alongside automation This dual approach ensures that high-skilled jobs will continue to exist even after automation is implemented,