What Impact Does Technology Have on Jobs?

Laurence Chandy,
Laurence Chandy Former Brookings Expert, Director of Data, Research and Policy - UNICEF
Kemal Derviş, and
Kemal Dervis
Kemal Derviş Vice President and Director

Steven Rocker
Steven Rocker Project Coordinator and Research Assistant

February 1, 2013

In keeping with the mood of economic despondency, there
has been lots of pessimistic talk in the U.S. and the rest of
the industrial world about innovation in today’s economy, or
the lack thereof. For instance, Tyler Cowen’s best-selling e-book
The Great Stagnation argues that innovation is occurring at a
slowing rate and that the innovation that is taking place, such
as through the application of the Internet, has had a relatively
limited impact on living standards and job creation. In a similar
vein, the economist Bob Gordon hypothesizes in a recent paper
that the presumption of continuous growth can no longer be
taken for granted when today’s innovations do not generate
sustained improvements in labor productivity. One area
where everyone agrees that technological change is making a
difference is in driving a wedge between high- and low-skilled
wages, leading to widening inequality and a stagnant median
income since the 1990s.

One of the questions posed at the Brookings Blum
Roundtable was to what degree these concerns have salience
in the developing world, especially in low-income countries.
Because developing countries stand some distance from
the global productivity frontier, a speculative slowdown in
technological development or a decline in the impact of these
technologies should not concern them. They can continue to
raise their prosperity by harnessing the existing technologies
employed in the West. However, that still leaves the question
of the impact of technology on jobs.

Read the full chapter »