Where are the jobs in technology?

Where are the jobs? Not in technology. Not in manufacturing despite hopes that the declining Canadian dollar would stimulate growth. While the economy continues to grow, unemployment remains stubbornly high. And the jobs available are of the lowest quality in 25 years according to a recent report by CIBC.


The bloom went off technology decades ago. In the 1980s and 1990s, investment in computer and information-processing equipment surged, stimulating a wide range of entirely new computer-related occupations.

Canada was the beneficiary of technology in the field of communications. However, since 2000, Canada’s tech giants Nortel and Blackberry have shed thousands of jobs and digital jobs have not taken their place.

Carl Benedikt Frey, researcher at the University of Oxford, describes how the glow has gone from the surge that pulled economies through the doldrums of the 1980s and 1990s. “The problem is that most industries formed since 2000—electronic auctions, internet news publishers, social-networking sites, and video- and audio-streaming services, all of which appeared in official industry classifications for the first time in 2010 —employ far fewer people than earlier computer-based industries. Facebook employed only 8,348 as of last September.”

The reason is simple. Digital businesses require little capital to get started. The average cost of developing an app is only $6,453. The popular Instant-messaging software firm WhatsApp started with only $250,000, and employed just 55 workers when Facebook announced it was buying the company for $19 billion.

Not long ago a new billion-dollar company would have created thousands of jobs. In 2010 only about 0.5 percent of the U.S. workforce was employed in industries that did not exist a decade earlier.

The low-job digital economy is growing; replacing jobs that employed many more. When the Kamloops Daily News closed, it employed about 34 full-time staff and 12 contracted delivery drivers. Now those unemployed workers are struggling to find jobs in digital media.

The loss of jobs is predictable in the absence of new technology. Eighty years ago, economist Alvin Hansen forecast the causes of job loss. During the Great Depression, Hansen suggested that as population growth slows and the rate of new technologies declines, investment will fall and lead to slower economic growth and fewer new jobs.

Hansen wrote that “when a revolutionary new industry … reaches maturity and ceases to grow, as all industries finally must, the whole economy must experience a profound stagnation …. And when giant new industries have spent their force, it may take a long time before something else of equal magnitude emerges.”

On the bright side, digital businesses are easy to start because of the low-cost entry costs. But affordable technical education is a key. Progressive governments can help, not only by keeping tuition low, but by supporting jobs in emerging technologies: solar photovoltaic installers, wind energy engineers, biofuels production managers and transportation planners.

Closing the gap between rich and poor is vital. “The challenge for economic policy is to create an environment that rewards and encourages more entrepreneurial risk taking. A basic guaranteed income, for instance, would help by capping the downside to entrepreneurial failure while boosting spending and combating inequality.” says Frey.


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