Student Jobs and Government Claims

According to the Office for National Statistics the number of university students in the UK has fallen from 38% to 26%.  The reasons for this are both perhaps that there are fewer ‘student jobs’ available, but also because there is more competition from non-students for what would have traditionally been ‘student jobs’.

Typically ‘student jobs’ tend to be in service industries that require staff on a part time outside of ‘office hours’, e.g. retail, catering, bars.  In recent years this has extended to include activities like call centres, paid charity fundraising, leafleting and direct selling.

There are currently around 2.5 million university students in the UK, 12% of that number represents around 300,000 students who are not gaining work experience.  

As students are counted as primarily economically inactive, while someone who is working part time in what might otherwise have been regarded as a ‘student job’ is regarded as primarily ‘employed’ this has potentially moved up to around 300,000 jobs into the private sector from not being counted, which further calls into question the Government’s claims about job creating by the private sector over the last three years.

The Chancellor's Response to My Enquiry

My MP has forwarded to me the response she received to the enquiry I requested she put to the Chancellor regarding the basis of the Government’s claims of growth in private sector employment since May 2010.

Since I received the response, a few days ago, I believe I have heard John Redwood on Any Questions on BBC Radio 4 claim that 1.5 million jobs have been created in the private sector since May 2010, a 50% increase on claims made only weeks before by the Chancellor and Prime Minister.

The response was supplied by Lord Deighton Commercial Secretary to the Treasury.

The figures supplied were a sample of the figures published by the Office for National Statistics at: www.ons.gov.uk/ons/search/index.html?newquery=EMP02dealing with the years 2010 to 2013.

There was no attempt to provide any breakdown by region, by employment sector, or by type of contract (e.g. full time, part time, zero hours, temporary, etc.).  But looking at the notes included at the bottom of the table, and not referenced by Lord Deighton:

•       I am reminded that public sector employment was increased by the reclassification of the employees of Northern Rock (October 2007), the Bank of England (February 2008), Bradford and Bingley plc (September 2008) and the Royal Bank of Scotland and Lloyds Bank (October 2008) as public sector.  Northern Rock employees have since been reclassified back to the private sector (December 2011).
•       From June 2012, some 196,000 people employed by further and sixth form colleges were reclassified from the public to the private sector.
•       Numbers are based on estimates; public sector employment is based on estimates by public sector organisations, private sector based on the limited data provided by the Labour Force Survey up to 2010, there is no indication of the basis of private sector employment estimates after 2010, but if it is based on the same, or similar survey data, then the sample is limited, so limited that at a regional or employment sector level the sample may not be reliable.   

Lord Deighton's letter also refers to the Private Sector Employment Indicator (PSEI) on the BIS website for February to April 2013 and refers to a one percent increase in private sector employment nationally:

www.gov.uk/government/publications/private-sector-employment-indicator-february-to-april-2013 

Similar growth in employment is claimed for each region.  That growth is of course from different baselines.  The Infographic at:

www.gov.uk/government/uploads/system/uploads/attachment_data/file/226388/Private-Sector-Employment-Indicator-Infographic-Q1-2013.pdf

This I note divides England into two sectors; The Greater South East (London the South East and East of England) with private sector employment at 61.3% of the working age population, and The Rest of England with private sector employment at 56.6%.  It is interesting that that each of these groupings includes one of the regions that has seen greatest growth in private sector employment (London, and Yorkshire and Humber) and one of the two regions that has seen a small decline in private sector employment (the East of England and the East Midlands).

The rationale for this division into two groups of regions is to minimise the effect on the data of commuting.  One wonders whether a significant amount of inter-regional commuting actually takes place other than the broader London commuter hinterland which would include areas of the South East and East of England.

The Government’s concerns are to demonstrate growth in private sector employment and a re-balancing of employment from public sector to private sector.  It is less concerned with evidencing what sort of employment is being generated (e.g. full time, part time, zero hours, etc.) and in what employment sectors (e.g. manufacturing, hospitality, financial services, etc.).

Conclusion:

I do not feel much trust can be placed in the Government’s headline figures or that the Government knows, with accuracy, how much private sector growth there has been, or that it is much concerned with what quality of employment is being generated by the early stages of recovery.  They are concerned to give the best interpretation of what they do know.

What sort of Recovery ?

According to the monthly assessment by the Chartered Institute of Purchasing and Supply (CIPS) / Markit the Purchasing Managers Index (PMI) rose in July to its highest level in two and a half years.

The PMI is made up of various measures of industrial performance; orders, output, employment, stock levels and inflationary pressure.  CIPS / Markit said orders and output were growing at their fastest pace since the summer of 1994, a period when the UK was recovering from the last recession.  But costs like fuel have also risen.

Where is the demand coming from ?

Much of the demand is domestic and funded by borrowing, much of the rest is from those parts of Europe that are emerging from recession.  How secure that recovery is, is surely uncertain while many Eurozone member state economies remain in recession and issues demand to be addressed in the stronger economies; many Netherlands’ homeowners have been plunged into negative equity, more Germans are becoming intolerant of the low pay that has helped make and keep Germany competitive.

The export led recovery to the BRICs has not happened:

• China seems to have achieved a soft landing economically rather than a catastrophic bursting of its property bubble and industrial output rose again in August
• India’s economy is faltering and Indians are dealing with sudden and significant inflation
• Brazilians are restive wanting the benefits of economic progress more evenly distributed among the population
• Russia is unusual, not truly one of the rising economies, nor one of the original G7 industrial economies, with an economy based primarily on exploiting vast natural resources rather than industry
• The other rising economies have yet to achieve global significance 

Most employment growth appears to be in the service sector and much of that growth appears to have been in the form of insecure zero hours, part time or temporary employment.  This is probably more indicative of uncertainty about the economy and recovery and insecurity on the part of employers rather than any ‘capitalist vindictiveness’,  though some no doubt will see it in those terms.

So far the 'recovery' is neither strong nor certain and it may take years for recovery in the economy to translate into recovery in the labour market.

Growth, Employment and Unemployment

The Chancellor has announced that the economy is healing and certainly the latest figures suggest some signs of growth across the whole economy.

This does not necessarily translate into actual jobs.  In recent years we have seen the phenomenon of ‘jobless growth’ through efficiency or increasing the workload of existing workers.  Certainly in the wake of changes to working tax credits employers have been seeking to increase the hours of part time staff to twenty hours or more each week to help them qualify for what is effectively a wage subsidy funded by taxes. 

Improvement in the economy might be expected to produce an increase in employment, though with a “time lag”.  This lag might be expected to vary from sector to sector with  construction and perhaps also some export industries leading the way.

What about unemployment ?

The following is part précis of an article by Stephanie Flanders, Economic Editor at the BBC and part my thoughts on the implications for the labour market, society and Government of NAIRU.

What does Britain's unemployment rate tell you about the state of the economy ?

Governments have always been concerned with getting people into work.  But in the 1960s and 1970s they learned to temper that enthusiasm for higher growth with a concern for inflation.  In the long run, economists decided, fast growth couldn't deliver full employment, if the economy didn't have the underlying productive potential to match.

That's where the concept of the Natural, or Non-Accelerating Inflation Rate of Unemployment comes from - or NAIRU.

Economists first started to talk about it, 30-40 years ago, the concept that there might be a "natural" rate of joblessness.

Long-term, governments like to think they can lower that natural rate, by raising skills levels, for example. But like most "structural" improvements to the economy, it's not quick.

Short term, the Bank of England is supposed to take the natural rate as fixed, and assume that the economy is getting close to full capacity when the rate of joblessness approaches that level.

The Office for Budget Responsibility reckons Britain's "natural" rate is now about 5.4% (the rate of unemployment just before the economy peaked), others like the OECD think it's higher.

Because of the lag between growth in the economy and growth in employment, central banks focus more on the economy and less on unemployment because what was happening to the economy now was likely to tell you quite a lot about what was going to happen to unemployment later.

Currently this anticipated link between growth and employment is not just operating "with a lag", it's not really operating at all.  It has been noted that employment has been rising, even when the economy was not growing.

At first this was put down to “labour-hoarding" by employers, and a rise in self-employment and part-time work.  The idea was that unemployment had not really ‘fallen’, it was merely being hidden by reductions in hours and new "jobs" that were not really jobs.

But as Kevin Daly explains in recent research for Goldman Sachs, average hours worked have actually been quite high during this period.

In the UK, people are joining the active labour force, not leaving it.  And self-employment is not rising any faster now than in the years before the crisis, when the standard link between output and employment was still working pretty well.

What is driving the rise in employment ?

The falling relative cost of labour; real wages have declined, re-entrants to the workforce from unemployment are either accepting lower pay for similar jobs or settling for jobs below their skill and former pay levels.

If rising employer demand for labour was driving the rise in numbers in work, you'd expect that higher demand would push up wages.  In fact, the reverse has happened: employment has risen, as real wages have continued to fall.

According to Daly there are several reasons for this, the biggest being a shift towards later retirement which has accelerated in the past few years, perhaps partly due to legal changes like phasing out compulsory retirement and changing the state pension age for women.

If there is a lot of hidden unemployment and / or the UK really has suffered big permanent damage to its productive capacity as a result of the crisis then growth may be unsustainable.  This is still possible.  But the Daly view of what's happening with the labour market suggests that, whatever is going on, the rate of unemployment might well be as good a guide to the amount of spare capacity in the UK economy as the Bank of England is likely to find and to when interest rates should change.  If unemployment remains higher than expected because demand is weak, the Bank would probably want to keep interest rates lower for longer.

Stephanie Flanders’ article in full here: http://www.bbc.co.uk/news/business-23545881

The implications of NAIRU are that Government must accept that there will always be some unemployment.  The questions raised by this are who, for how long and what provision should be made for them ?

Currently Government ‘policy’ is not to accept that there will be some unemployment, that the unemployed must be persuaded into work rather than allowed to become comfortable recipients of benefits and that appropriate provision is to assist them to pursue the jobs that are provided by ‘market forces’.

Who

The NAIRU means there will always be a significant number of people in the 16 to 67 age range who will be unemployed.  Currently unemployment is higher among those under 25 and over 50.  Unless this changes then today’s workers and learners should be factoring this into their career planning.

For How Long

Much unemployment is frictional, e.g. a relatively brief gap between periods of employment.  Ideally all unemployment should be frictional, but these gaps between periods of employment tend to be longer for more highly qualified and experienced workers.  Employers tend to assume that these will not wish to settle into jobs where they are underemployed and / or under-challenged and will use their jobs as transitional.  There may also be some age prejudice here, despite age discrimination legislation.  Jobs appropriate to the qualifications and experience of these older workers may not exist and employers’ recruitment practices may overlook potential and transferable skills in favour of matched experience for a ‘quick fix’. 

An extended period of unemployment may be very damaging to a younger worker, both to their career prospects and their ‘personal growth’.  The need for work may mean that they also have to settle for work where they are under-challenged and / or underemployed.  A variety of employment and experience and taking care to identify skills and experience gained can be of use in attempting to progress to more desirable work.  It has been noted that while entry level employment can for young men lead to progress to higher positions, for young women it can result in their being stuck at entry level.

Today’s workers and learners should again be factoring this into their career planning.

What Provision

Current conditions suggest that rather than making the same provision for all, perhaps support should vary with age, also perhaps with qualifications and experience.  Those in the 25 to 50 age range are more likely to re-enter employment quickly, those over 50 with high levels of experience and qualifications, but perhaps limited to a particular area of work or under 25 and lacking experience with less ease.

If economic policy is to create a reserve labour pool the Government could at least acknowledge this, show those in the reserve labour pool the respect due to citizens and plan to use that labour reserve strategically.

In the recent past the Government has intended to use ‘work experience’ as a means of giving young people an opportunity to evidence basic work skills; punctuality, reliability and fulfilling basic functions like shelf filling; though sometimes their agents have sought to impose this experience on young people who can already evidence these from previous experience.  Perhaps rather than basic skills for all they could seek to supported work experience / internships appropriate to the qualifications and experience of the individual young person, rather than having 'internships' as the preserve of those with parents able to support them through this experience.

In an ageing population and with a labour market with a significant number of ‘difficult to fill / skill shortage’ vacancies older workers’ experience and transferable skills are over-looked and targeted support could be given to re-training at higher levels for appropriate candidates.

At the moment re-training is left to ‘market forces’, but driven by supply rather than demand.  Suppliers of training offer training to those who can afford to pay, selling the hope that there is demand for that qualification and that possession will make the difference between unemployment and employment.  This may in fact generate more employment for trainers than address the real skill requirements of the economy.  Strategic planning and deployment of funding at least for some sectors should at least be attempted.

That great neo-liberal advocate of ‘market forces’ Milton Friedman advocated a guaranteed minimum income for all.  Currently funding for the unemployed is portrayed as benefit dependency for scroungers rather than support for future returners to employment.

More jobs than ever before ?

I just picked up this on Twitter, originating from 'Fraser Nelson':

Decrease in claimants, but the growth seems to be all part time and temporary employment, and part time and temporary employment that is 'enjoyed' by people who really want full time employment.

There are as many people underemployed as there are unemployed.  This tells me that employers have no confidence in the economy, whatever claims the Government may make.

I am one of the underemployed.

Where have the jobs come from ?

Thanks to Stephanie Flanders, Economics Editor at the BBC, I have a partial answer to my questions regarding the Chancellor's claims:

Where have the jobs come from ?

While there has been negligible growth in the economy, since 2010 there has a growth in employment. 

432,000 more people in employment in April 2012 than a year earlier, but productivity is lower, 10% lower than would be expected of this level of employment.  According to a new paper by Joao Paulo Pessoa and John Van Reenen at the Centre for Economic Performance at the London School of Economics the growth in employment is down to workers accepting lower pay.  With credit difficult to obtain from banks and businesses reluctant to invest in equipment, businesses have been investing in people; people are cheaper than equipment or credit . . .

Between 2003 and 2008 pay rose on average by 10% (on top of inflation), between 2008 and 2013 average pay fell by 8%.

The full article: www.bbc.co.uk/news/business-22874889

What this explanation does not provide is an indication of where those jobs have been created; which sectors of the economy, which regions of the UK. 

Perhaps if my MP does ask Mr Osborne on my behalf then we shall have an answer ?

1st July 2013 Where are we at ?

I seems like I haven’t posted a blog entry here for a while.

Negligence ?

No, the UK labour market is intriguing at the moment.

Claims and Facts ?

The Chancellor of the Exchequer has claimed that the economy is off life support and in recovery.  He has set out plans for what the Government will do beyond the next election.  As the next election has, obviously, not happened yet and as the Chancellor will not be required after May 2015 to conform to plans announced in 2013 this amounts only to posturing and electioneering.

The UK seems to have a two speed economy at the moment.  Using house prices as a barometer of confidence; in the ‘core’ of London and the South East house prices are up 5% on pre-crunch values, while across the rest of the UK  house prices are down 9%.

Allegedly since this Government took over in 2010 over a million private sector jobs have been created, perhaps the claim is 1.5 million now ?

I have interrogated the NOMIS database (the Office for National Statistics database) seeking evidence for this claim and so far I haven’t found it.  I wonder on what the Chancellor bases his claims. 

I may of course be a contributor to this statistic, for having been made redundant from a full time public sector post I am now employed on a ‘freelance’ basis by two employers.  Although together these amount to less than full time work, and at times no work at all, I do wonder if I account for two of the million jobs claimed ?

Should I find additional part time irregular work with additional employers will I account for more jobs in the economy ?

If I do three hours a week for each of five different employers (okay an extreme example) would that count as five jobs or one part-time job ?   

I would like to know on what data the Government bases its claims.  Transparency please, Mr Osborne.  Perhaps I shall ask my MP to ask the Chancellor ?

The Labour Market

Certainly the number of benefits claimants has been in decline, but this decline is not necessarily a result of increased employment:

§  The Government is re-shaping the benefits system; part of this is ‘amended entitlement’

§  Journalists have found evidence that more people are working as members of what the press has labelled the ‘precipterate’; self-employed or employed as freelance

In a labour market where job seekers significantly outnumber vacancies and advertised vacancies can attract hundreds or thousands of applicants employers are applying rigorous and often automated methods to de-select applicants.  In this labour market experience is everything, the applicant may have considerable potential, but if their experience does not match they will not be among the handful selected for interview out of the 100 – 500 that typically apply.  For in the information age it is easy to apply and the replication of a vacancy across many platforms (recruitment sites) cost effectively markets vacancies to a host of job seekers.

There are those that say that the UK economy would be stimulated by further de-regulation of the labour market.  The UK labour market is already one of the most de-regulated among developed economies; close to the ‘hire and fire’ labour market of the US.  But we are told that the strength of the UK, the basis of its ability to ‘punch above its weight’ is creativity and innovation.  An old slogan of Sweden’s Social Democratic Party comes to mind “Secure People Dare”.

Demographics and the Labour Market

Around 1 million of the UK’s job seekers are 25 or under.  At the same time around 1 million of the UK’s pension age population are still working.  Part of this reflects a skill and experience mis-match as employers are choosing to employ older people rather than the young.  This suggests dysfunction in the UK labour market, benefits system and education systems; will current Government policies address these issues or are they ‘ideological indulgence’ ?

I fear, too often, they tend to look like the latter.

And alongside high unemployment we have hard to fill vacancies.  Government focus is on helping the unemployed into what are all too often low prospect, low security, low pay employment, rather than finding ways to develop the high skill, high value adding workforce that an advanced economy needs.

The Export Led Recovery

There was talk three years ago of an export led recovery.  There seems scant evidence of this and some evidence that the BRIC economies, to which we were, it was hoped, going to export, have begun to develop their own economic problems; credit crunch in China and social discord in Brazil.  The other EU states remain the UK’s main trade partners but doubt has been generated over the future of the UK’s political relationship with the EU.

MMT, Austerity and Defecit

Modern Monetary Theory

MMT is concerned with how money functions in the real modern economy.  It has a heritage going back to German economist Knapp’s ‘State Theory of Money’ published in 1895.

The function of money can be described by a variety of terms.  The most common of these views money as a ‘medium of exchange’.  The medium of exchange view is based on the erroneous assumption that money was initially created as an alternative to barter in a market economy.

MMT sees money as a standard of deferred payment; something that exists in order to pay off debt or denominate accumulated credit.  This corresponds with the true origin of money as a government generated artefact to facilitate taxation and resource re-distribution.

According to MMT there are two types of transactions ‘vertical’ (between the Government / Central bank and the banking sector) and ‘horizontal’ (within the private sector).

The current Government’s analogy of Government deficit to a maxed out credit card treats Government debt as ‘horizontal’ debt rather than ‘vertical’.  MMT regards Government deficit as investment in the private sector.  MMT is not the only school of economic thought that views Government deficit as investment.  There is danger that injecting too much additional money or making poor decisions about how to invest additional money can fuel inflation, but this is a qualitative rather than quantitative issue.  Fear of potential inflation led the last government to hand money created as quantitative easing directly to the banking sector rather than investing it in ‘the real economy’, e.g. using it to pay for services to government or public sector workers’ salaries.  Of course the banks are expected to repay the funds ‘invested’ by government QE at some point, though no mechanisms have yet been established to facilitate this.

There is a difference between states that have control over their own currency and those that have entered into a monetary or fiscal union and share a currency with other states, the prime, but not the only example being the Eurozone.   

Austerity

In 2010, Professors Carmen Reinhart and Kenneth Rogoff, Harvard University economists published a paper “Growth in a Time of Debt” that supported the warnings of the global austerity movement.  They concluded that countries with a debt exceeding 90% of their annual GDP experienced slower growth than their thriftier peers.

In 2013 this finding has been debunked by a graduate student at Amherst College in Massachusetts who examined the data used by Reinhart and Rogoff with their approval and found both that the excel spreadsheet they used contained calculation errors and that discounted evidence that contradicted their assertion, e.g. Canada, New Zealand and Australia have all experienced growth despite high government debt.  There is some correlation between high government debt and slow growth, but the correlation is not definitive as declared by Reinhart and Rogoff, nor is there a threshold beyond which a major decline in GDP is guaranteed.

Under the right conditions government deficit can contribute to recovery from recession.

Creating employment, creating confidence

The UK has a cocktail of issues to deal with; the answer for many of these is investment, to others it is government policy:

• An ageing population; research into how to mitigate the effects of age and providing care for those no longer able to care for themselves provide investment opportunities and employment
• Non-fossil fuel energy; wind, solar, algae that devour agricultural waste and produce fuel oil as a by-product or nuclear power provide investment opportunities and employment
• On-shoring services and manufacturing that can now be done better, more efficiently or at comparable cost here rather than abroad

This is different to the traditional Keynesian approach of stimulating the economy through construction and development of infrastructure, but this is not the 1930s and private investment needs to be attracted to addressing these problems as well as government investment.

The UK’s deficit, though undesirably high, is less a problem than lack of growth, high unemployment and lack of confidence.

Hayek, Thatcher, serfdom and capitalism

Baroness Thatcher has of course been prominent in the news in recent days.

I will not here comment on her or her economic or labour market policies, but one incident in 1975 pre-dating her election as Prime Minister in 1979 caused me to think about a chief influence on her economic view.

In 1975 soon after becoming leader of the Conservative Party the Institute of Economic Affairs arranged a meeting between Friedrich Hayek and Margaret Thatcher in London.  During her only visit to the Conservative Research Department in the summer of 1975, a speaker had prepared a paper on why the "middle way" was the pragmatic path the Conservative Party should take, avoiding the extremes of left and right.  Before he had finished, Thatcher "reached into her briefcase and took out a book.  It was Hayek's The Constitution of Liberty.  Interrupting the pragmatist, she held the book up for all of us to see.  'This', she said sternly, 'is what we believe', and banged Hayek down on the table".

Hayek was a champion of classical liberalism, though he had earlier been sympathetic to democratic socialism.  His most well known book is ‘The Road to serfdom’, written between 1941 and 1943, published in 1944 and greatly admired by Milton Friedman.  This warned that central planning (a necessity during World War II for the Axis powers, the Soviet Union and its satellites and the Allied powers) if carried to extreme would lay the foundations for dictatorship and totalitarianism, reducing ordinary people to serfdom.

Seventy years later it seems that deregulated global capitalism and increased flexibility in the work force is also leading / has led to serfdom for many:

• zero hours contracts (insecurity of pay)
• short term contracts (insecurity of employment)

These may not be an issue for workers in a growing economy, especially if they are engaged in other activity which is facilitated by this work, e.g. further study, or they are trying to establish themselves in the early stages of a career, but where this becomes the norm., where workers for whom these conditions of employment would formerly be unacceptable, or where these conditions are extended exploitatively then workers are reduced to a serf-like condition.

For example in response to Government pursuit of a leading chain of coffee houses for tax avoidance the chain demanded its workers agree to changed terms and conditions, effectively reducing their pay, or walk.

Some zero hours contracts include conditions requiring that the employees hold themselves available to work at short notice a significant amount of the time, curtailing their freedom to engage in other activities while providing no recompense for that availability.  Practices that are reminiscent of some industries in the industrial age, e.g. dock yard day labour, but in different sectors in this information age and predominantly service sector economy (primarily catering, caring and retail).

According to Tanya Gold's article in the Guardian:

http://www.guardian.co.uk/commentisfree/2013/apr/14/hello-zero-hours-goodbye-workers-rights

• 23% of large British firms use zero hour contracts
• At least 200,000 are expected to remain 'on hold' in case work is available
• Doctors and university lecturers are among those now living with zero hours contacts

Capitalism, like other -isms can lead to 'serfdom,, it isn't the 'ism' its issues of responsibilty, compassion and relative inequality.

Emerging Technologies and employment

Emerging Technologies to be aware of from 2013

More thoughts from the World Economic Forum, Davos 2013

With my thoughts on whether and how these could create or transform employment.

OnLine Electric Vehicles (OLEV)

Wireless technology can now deliver electric power to moving vehicles.  In next-generation electric cars, pick-up coil sets under the vehicle floor receive power remotely via an electromagnetic field broadcast from cables installed under the road. The current also charges an onboard battery used to power the vehicle when it is out of range.  As electricity is supplied externally, these vehicles need only a fifth of the battery capacity of a standard electric car, and can achieve transmission efficiencies of over 80%.  Online electric vehicles are currently undergoing road tests in Seoul, South Korea.

The resources required to embed such cables mean that this technology may take time to install and may be limited to major roads or densely populated areas.  Paying for energy picked up while driving also raises issues.  Perhaps a hybrid solution will be to have cables installed in parking spaces, driveways, etc. that can be switched on or off from home or office.  Installation and maintenance would produce jobs.

3-D printing and remote manufacturing

Three-dimensional printing allows the creation of solid structures from a digital computer file, potentially revolutionizing the economics of manufacturing if objects can be printed remotely in the home or office.  The process involves layers of material being deposited on top of each other in to create free-standing structures from the bottom up.  Blueprints from computer-aided design are sliced into cross-section for print templates, allowing virtually created objects to be used as models for “hard copies” made from plastics, metal alloys or other materials.

At present this technology seems to be limited to manufacturing objects from a single material source (e.g. plastic or alloy), it could make the production of primary components more cost effective, but will it produce more jobs ?

Self-healing materials

One of the defining characteristics of living organisms is their inherent ability to repair physical damage.  A growing trend in bio-mimicry is the creation of non-living structural materials that also have the capacity to heal themselves when cut, torn or cracked.  Self-healing materials which can repair damage without external human intervention could give manufactured goods longer lifetimes and reduce the demand for raw materials, as well as improving the inherent safety of materials used in construction or to form the bodies of aircraft.

This reads like science fiction and it is probable that jobs created by the development of these technologies will be in the research and development of materials and manufacturing.  Limited growth in jobs manufacturing, perhaps more a transformation / raising of the skills required.

Energy-efficient water purification

Water scarcity is a worsening ecological problem in many parts of the world due to competing demands from agriculture, cities and other human uses.  Where freshwater systems are over-used or exhausted, desalination from the sea offers near-unlimited water but a considerable use of energy, mostly from fossil fuels, to drive evaporation or reverse-osmosis systems.  Emerging technologies offer the potential for significantly higher energy efficiency in desalination or purification of wastewater, potentially reducing energy consumption by 50% or more.  Techniques such as forward-osmosis can additionally improve efficiency by utilizing low-grade heat from thermal power production or renewable heat produced by solar-thermal geothermal installations.

This technology would generate jobs in construction, maintenance, logistics.  Primarily not in the UK, which has less of a water supply problem than some other parts of the world, but ‘solution technologies’ are exportable and people who work in key global industries today often work abroad.

Carbon dioxide (CO₂) conversion and use

Long-promised technologies for the capture and underground sequestration of carbon dioxide have yet to be proven commercially viable, even at the scale of a single large power station.  New technologies that convert the unwanted CO₂ into saleable goods can potentially address both the economic and energetic shortcomings of conventional CCS strategies.  One of the most promising approaches uses biologically engineered photosynthetic bacteria to turn waste CO₂ into liquid fuels or chemicals, in low-cost, modular solar converter systems.  Individual systems are expected to reach hundreds of acres within two years.  Being 10 to 100 times as productive per unit of land area, these systems address one of the main environmental constraints on bio-fuels from agricultural or algal feedstock, and could supply lower carbon fuels for automobiles, aviation or other big liquid-fuel users.

Creating an artificial ‘carbon cycle’ to manufacture carbon based fuel from carbon dioxide extracted from the atmosphere by algae producing a ‘pure’ carbon based fuel rather than a raw oil requiring refining, will require considerable infrastructure replacing existing oil and gas extraction and processing facilities, not necessarily in the same locations and quite possibly requiring a larger ‘footprint’.  This will generate jobs in construction, engineering, biotechnology and, logistics.

The extraction and sequestration of carbon from the atmosphere, if this is felt necessary, would require the installation of inert carbon filtering structures, essentially artificial trees.  Sequestered carbon could be collected and sequestered underground or potentially the carbon and oxygen split.  Carbon has a growing number of applications; carbon fibre, graphene film, etc.

Enhanced nutrition to drive health at the molecular level

Even in developed countries millions of people suffer from malnutrition due to nutrient deficiencies in their diets.  Now modern genomic techniques can determine at the gene sequence level the vast number of naturally consumed proteins which are important in the human diet.  The proteins identified may have advantages over standard protein supplements in that they can supply a greater percentage of essential amino acids, and have improved solubility, taste, texture and nutritional characteristics.  The large-scale production of pure human dietary proteins based on the application of biotechnology to molecular nutrition can deliver health benefits such as muscle development, managing diabetes or reducing obesity.

Creating jobs in research and manufacturing; and changes to work related knowledge and training for health professionals, food scientists, personal trainers, etc.

Remote sensing

The increasingly widespread use of sensors that allow often passive responses to external stimulae will continue to change the way we respond to the environment, particularly in the area of health.  Examples include sensors that continually monitor bodily function; such as heart rate, blood oxygen and blood sugar levels, and if necessary, trigger a medical response such as insulin provision.  Advances rely on wireless communication between devices, low power-sensing technologies and, sometimes, active energy harvesting.  Other examples include vehicle-to-vehicle sensing for improved safety on the road.

The manufacture of sensors will produce some employment.  The introduction of sensors will modify many jobs; already some vehicles have parking or other sensors, researchers are developing systems that can safely control cars and software that can learn routes, the management of some medical conditions may be transformed.

Precise drug delivery through nanoscale engineering

Pharmaceuticals that can be precisely delivered at the molecular level within or around a diseased cell offer unprecedented opportunities for more effective treatments while reducing unwanted side effects.  Targeted nano-particles that adhere to diseased tissue allow for the micro-scale delivery of potent therapeutic compounds while minimizing their impact on healthy tissue, and are now advancing in medical trials.  After almost a decade of research, these new approaches are finally showing signs of clinical utility.

 This will obviously affect the pharmaceutical industry, but will this significantly increase or decrease employment ?

Organic electronics and photovoltaics

Organic electronics (a type of printed electronics) is the use of organic materials such as polymers to create electronic circuits and devices.  In contrast to traditional (silicon-based) semiconductors that are fabricated with expensive photolithographic techniques, organic electronics can be printed using low-cost, scalable processes such as ink jet printing, making them extremely cheap compared with traditional electronics devices, both in terms of the cost per device and the capital equipment required to produce them.  While organic electronics are currently unlikely to compete with silicon in terms of speed and density, they have the potential to provide a significant edge in cost and versatility.  The cost implications of printed mass-produced solar photovoltaic collectors, for example, could accelerate the transition to renewable energy.

Potentially thin sheets of solar voltaic collectors could be added to roofs and walls to generate electricity using fewer resources.

Fourth-generation reactors and nuclear-waste recycling

Current once-through nuclear power reactors use only 1% of the potential energy available in uranium, leaving the rest radioactively contaminated as nuclear “waste”. While the technical challenge of geological disposal is manageable, the political challenge of nuclear waste seriously limits the appeal of this zero-carbon and highly scalable energy technology.  Spent-fuel recycling and breeding uranium-238 into new fissile material (known as Nuclear 2.0) would extend already-mined uranium resources for centuries while dramatically reducing the volume and long-term toxicity of wastes, whose radioactivity will drop below the level of the original uranium ore on a timescale of centuries rather millennia.  This makes geological disposal much less of a challenge (and arguably even unnecessary) and nuclear waste a minor environmental issue compared to hazardous wastes produced by other industries. Fourth-generation technologies, including liquid metal-cooled fast reactors, are now being deployed in several countries and are offered by established nuclear engineering companies.

Research is also being done into the development of reactors that would use Thorium, a less hazardous radioactive element, which is abundant in several parts of the word, for example Norway.  Continued, and safer, use of nuclear energy offers employment in construction, and in the nuclear industry.

Davos 2013

The World Economic Forum

Committed to Improving the State of the World

Below is a brief summary of the main themes / concerns of Davos 2013. 

The conference also considered emerging technologies, equality issues and threats to global socio-economic security. 

The theme of Davos 2013 was Resilient Dynamism:

§  Leading Through Adversity;

§  Restoring Economic Dynamism;

§  and Strengthening Societal Resilience

Which means what ?

§  Economies affected by the financial crisis remain fragile and need to gain resilience, actions by governments and central banks avoided collapse, but there is real danger of relapse

§  The world has moved from ‘crisis response’ to structural reform; dynamism is about moving on from austerity to the investment required to create employment

“We are awash in cash, but we continue to invest as if cash were scarce,

We are not investing in innovations that create growth.”

Clayton Christensen, Professor of Business Administration,

Harvard Graduate School of Business Administration, USA.

Unemployment

“Davos has been too optimistic, the underlying issue is jobs.

There are 200 million people unemployed worldwide.”

FredericoCurado,

President and Chief Executive Officer, EMBRAER, Brazil

§  11 million in Europe and the US made unemployed in consequence of the Global Financial Crisis

§  Europe 25 million unemployed and 3 million vacancies that cannot be filled

§  The unemployment rate among young people; 44% in Greece, 30% in Portugal, 29% in Italy, 26% in Poland and 22% in France

The information age has replaced much human labour with ‘automation’ but has also had an impact on human labour, of which greater efficiency is expected.  But what the world needs is a system that is more resilient and that means getting people not to be ever more efficient, but to encourage them, and equip them, to be more creative.

There is a consensus that the “grow at all cost” model is no longer viable in the post-crisis world. Not only is it destructive of the environment but it also tends to concentrate the wealth in a few hands.

Reflecting on the Financial Crisis

The Global Financial Crisis was a governance crisis originating in the financial sector.  That sector hid too much of its activity in “dark and murky corners” (Christine Lagarde) and “put its own short term gain ahead of supporting the real economy”.

Accountability is crucial. “The goal of the private sector cannot be only profit; it must also add value, create jobs [and] develop the new ideas that drive an economy forward,” she said. “We need a financial sector that is accountable to the real economy, one that adds value, not destroys it.”

According to Professor Stiglitz (Columbia University, Nobel Prize in Economics Science 2001) the global financial system still needs to be fixed, there is still a murky trade in derivative products of unclear value that poses a threat to economic stability.

Moving on from 2012

2012 was about whether the Euro would collapse, the US fiscal cliff and concerns that the Chinese economy could hit serious problems.  The view from Davos was that 2013 should be about jobs and growth.

Too many nations retreating from addressing long term issues of sustainability, infrastructure, agriculture, energy production, education and health, to focus on domestic and economic challenges.

Responsible Capitalism; businesses and share holders cannot continue to think short term, they must think of long term sustainability, of what their business can contribute socially and economically as well as ‘the bottom line’.  If ‘Responsible Capitalism’ emerges from the wreckage of the Global Financial Crisis it will take some years for it to fully evolve.