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Economy

Time to say goodbye to traditional concept of work

Technology is revolutionizing labor in the 21st century and we must adapt

TOKYO -- U.S. President Donald Trump is urging businesses to invest and create jobs in his country. 

Trump has posted tweets praising Ford Motor, General Motors, Wal-Mart Stores and other companies for complying with his plea and emphasizing that their decisions are the fruits of his policy. The recent U.S. employment report, released by the Labor Department on March 10, showed favorable figures led by the manufacturing sector.

Trump should be feeling good.

But the idea of mustering factories for greater employment is an old-fashioned, 20th century approach. 

Experts on artificial intelligence and robotics forecast that the assemblage of automobiles, construction work, warehouse management, checkout services and a host of other operations will be further automated. They will not be main sources of employment. 

Instead, attention should be directed to the information technology industry. While AI will take over much of the work humans currently do, the tech industry will nonetheless create many new jobs through innovation. 

Technology companies are now in a tug of war with Trump over his entry restrictions on people from several Muslim-majority countries. Job security can be maintained more effectively by allowing IT companies to recruit competent workers from all over the world and promote innovation. 

Multiplier effect

Skeptics note that IT companies do not hire as many workers as manufacturers when seen from the perspective of earnings reports. 

In fact, the world's top three companies in terms of market capitalization -- Apple, Microsoft and Alphabet, the parent of Google -- employ some 300,000 people, which is smaller than Toyota Motor's groupwide workforce. But peripheral jobs created by IT companies deserve scrutiny.

For example, take smartphones. Now that they are ubiquitous around the world, apps, such as those for news, education and games, are widely available thanks to 12 million developers. Even entry-level developers can become global sellers if they devise novel apps. 

Look at YouTube. There are millions of people who distribute videos via Google's video-sharing site. Some even earn more than $100,000 a year from corporate sponsors who place advertisements on their clips. 

Google now creates studios and teach YouTubers how to shoot and edit videos. This is, quite simply, a job-training program that helps people improve their skills. 

In addition to the online content business, the sharing economy, which enables people to make use of "niche" hours and assets on hand, also creates new jobs.

Ride-hailing company Uber Technologies has more than 1.5 million drivers and also hires delivery staffs who transport food and baggage across the word. Home-sharing company Airbnb has become an additional source of income to cover food and educational expenses for people who rent rooms or homes to travelers as short-term lodging options.

The auto industry employs a huge number of workers if employees at suppliers of parts and materials are included. But the strength of the industry may become its weakness as a result of advances in AI and robotics. Automakers need to examine whether they are preoccupied with near-term requirements and bound by the concept of 20th century-type employment policy and ways of work.

Rethinking labor

The fact that humans live longer is another development shaking the traditional concept of work. 

"A 50-year working life...is simply too long for one kind of work," the late renowned management consultant Peter Drucker wrote in his book "Managing in the Next Society" published 15 years ago. He also forecast that few companies would last more than 30 years.

As medical advances have extended the life span of humans, it is now taken for granted that people will work beyond the age of 70. 

At the same time, however, the longevity of companies has shortened significantly. In 2016, 8,446 companies went bankrupt in Japan, while the average life span of company had been about 24 years, according to Tokyo Shoko Research. 

The expanding gap between the life spans of humans and companies makes it is risky for people to excessively rely on one specific company or job.

New ways of work in compliance with this new age are rapidly expanding in the U.S.

A survey on U.S. companies found that there were 55 million freelancers in the country in 2016. That is one out of every three workers. Independent individuals comprise a formidable workforce earning a total of $1 trillion a year.

Self-employed workers are increasing in a variety of fields that are not limited to business consultancy and other professional work. A large number of people work via the internet while brushing up their own skills. 

People are changing the way they work at different stages of their life, from, say, company employees to freelancers to entrepreneurs, sometimes working two or more jobs at the same time. Multiple and flexible ways of work are flourishing in the 21st century. 

Broaden the discussion

What is the situation in Japan, where advances in AI and robotics are accelerating together with an aging population?

Recently, the government, labor and management agreed to limit monthly overtime work to less than 100 hours even during busy seasons. 

While discussion about different ways to work is gathering steam in both the public and private sectors, they tend to be limited to attempts to cut notoriously long working hours and establishing equal pay for equal work. 

True, these are important issues that must be examined, but the discussion must broaden and fundamentally address the way we work. 

"As there will be an increase in the self-employed, educating people about how to cope with change will be important," said Shinya Ouchi, a professor at Kobe University.

Ouchi, an expert on employment policy, stresses the need for young people to be literate in a variety of fields: using IT, understanding finance, and reading and writing legal contracts.

Companies, in addition to professional institutions for job training, should contribute to the creation of such an environment.

Measures to promote the mobilization of human resources, such as a review of dismissal rules to realize multiple ways of work in compliance with changes in business environments, are also indispensable.

Recent political developments make it seem that globalization is rolling back amid an inward-looking world. Even so, changes in our work environments march on. 

Economic growth in the 21st century hinges on bringing out every individual's ability and putting it to good use. 

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