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New automation technologies and job creation and destruction dynamics

This policy brief addresses the question of whether the unfurling technological revolution is so far-reaching in its labour-replacing potential that it is inherently different from what has been experienced in the past, and on balance is an inhibitor rather than a generator of decent work. It does so by providing the following: (1) a critical review of recent empirical studies on the effects of new automation technologies on jobs; (2) a discussion of multiple job creation and destruction dynamics and how these can offset each other at different levels of aggregation, ranging from specific tasks to the economy as a whole, providing illustrations from services and manufacturing; (3) a discussion of the prospects for reshoring (a reversal of offshoring by multinational enterprises) resulting from new automation technologies negating the labour-cost advantages of developing countries in the production of such labour-intensive manufactures as apparel and electronics assembly, and the technological bottlenecks to such reshoring; and (4) a closing discussion addressing the possibility of a bias of perception resulting from the anthropomorphic characteristics of many new automation technologies and – even in the absence of overall job loss – the need for progressive policies to address the probable tendency towards growing inequality that would otherwise result from new automation technologies as well as the near certainty of a more rapid pace of job creation and destruction and the challenge for workers of transitioning from old to new jobs.