Technology is not always a good thing, it depends. Technology can kill jobs. As a result, fewer jobs may mean less demand, which may lead to less output. Innovation can lead to recession. This may have happened in 1930s. After all, the US Great Depression followed (with a time a lag of 16 years) the greatest 50 year period in innovation that has ever been known. Innovation is back in vogue. Now a company which specialises in finding jobs for young people has warned that automation is killing jobs. Is it right?

Will Davies, is the managing director of aspect.co.uk, a company which claims to be a pioneer in providing job training for young people.

Mr Davies said: “The growing number of unemployed young people in Britain is a major problem but, unfortunately, its causes run deeper than any short-term cause, such as a recession.” Almost one million people aged 16 to 24, 20.9 per cent, are unemployed across the UK, which is one of the highest rates since record keeping began in 1992, and Mr Davies says: “Automation is displacing traditional jobs - whether or not we are coming out of economic crisis.”

The Davies remedy is for the government: “to incentivise the private sector to develop new industries that have a need for manual labour.”
He also says: “Young people's minds are being cluttered by the Internet and their attention spans shortened. Many of them simply are not equipped to take the jobs that do remain out there."

He makes good points.

But be careful not to view the future from the very narrow perspective of a country coming out of a very deep downturn. There is evidence that companies are re-shoring - that is to say, returning their manufacturing to home territories. That will help.

The government can also help by trying to create a more entrepreneurial minded country. New businesses create jobs. At least some unemployed people have skills and hobbies that could be translated into business ideas. But the money available is pitiful. It is odd that the Bank of England and UK government are willing to take the risk of creating a recovery from rising household debt, and house prices, but say using QE to fund investment into entrepreneurs is too risky.

It was also told today how there is evidence that graduates are good for the economy. See: We don’t need no education, we don’t need no thought control, well actually it appears we do. If nothing elsea good education, and especially an education to degree level, can help to overcome the problem Mr Davies alluded to – that of the internet shortening attention span.

And yet for all that, the problems and opportunities of innovation is not being grasped by economists. It does not help that they don’t seem to realise we are in the midst of a quite remarkable new technological revolution; one that may easily surpass the greatest era of innovation seen to date. See: Age of Symmetry 

Economists are busy denying that innovation is having much impact, busy ignoring what’s staring them in the face because their faces are averted and they are immersed in theory. Consequently they miss the remarkable revolution that is occurring. They are letting us down. The near one million young Brits who are unemployed are among their victims.

© Investment & Business News 2013