With the national unemployment rate hovering stubbornly at just about 9 percent, many are blaming technological innovation (which makes it easier for companies to hire less people to do the same jobs as before), as well as the outsourcing of jobs overseas.
However, Sal Novin, the chief executive of Healthcare Productivity Automation (HPA), a company that processes health care insurance claims, thinks these critics are missing the point and are putting blame on the wrong factors.
On the contrary, he contends that automation will ultimately stimulate the economy and create jobs in the long-term.
He spoke with International Business Times to discuss these subjects.
IBTIMES: Globalization and automation are expected to eliminate millions of jobs (permanently perhaps). How can you claim that these trends will create new types of jobs and industries?
NOVIN: Globalization and automation result in the expansion of international trade. Countries that are more productive can export more which stimulates domestic demand and the creation of new high-value, high-paying, and more rewarding jobs.
Consumers benefit by having higher-quality products and services at better prices.
For example, Healthcare Productivity Automation’s (HPA) focus is to automate repetitive healthcare payment tasks using virtual robots. This makes healthcare companies more competitive, improves the quality of care for patients, and enables staff to focus on high-value work.
Automation is nothing new and the effect on job-creation has been documented since the Industrial Revolution 300 years ago to today’s technological revolution. Innovations such as the Internet have not just added hundreds of thousands of jobs in technology, but have made technology so accessible that it has lowered the barriers to entry for any would-be entrepreneur with something to sell.
Today, anyone can be a merchant and have a global storefront with access to millions of potential buyers compared to the limited few who can afford to open a brick-and-mortar store, buy and maintain inventory, and access a client base limited by their location.
IBTIMES: But look at the post office -- e-mail is killing them. What is a postal worker supposed to do when he gets laid off, especially if he/she is middle-aged and has no education?
NOVIN: At no other time in history has the accessibility of training or the variety of possible career options been so great.
The U.S. has a significant competitive advantage globally because of the quantity and quality of our educational institutions. Additionally, the quality and accessibility of education is no longer limited by geography or time.
A student can be in a remote area attending class according to their schedule and learning at their pace. Online training extends from vocational certifications to University Bachelor degree programs.
Perhaps most importantly, the electronic era provides us instant access to enormous amounts of rich information instantly. The days of frustration hunting for books that are constantly checked out of libraries are gone. Books can be accessed at any time and there are hundreds of online resources that provide information in text, audio, and video form.
IBTIMES: Are you suggesting that we’re in the middle of radical transition with respect to the economy and industry?
NOVIN: We have been in radical transition for over two hundred years, the only difference is that the rate of change is accelerating and today’s economy is punctuated by a need to adapt quickly.
The frequency, speed and fluidity of change are increasing and will continue to increase. Historically, innovations like steam power, electricity, the telephone, and the automobile were all considered radical transitions of their time.
With each new innovation, adoption became faster as early adopters were rewarded with competitive advantages and financial gain. More recently, adoption itself is accelerating as people become more accustomed to change and less worried or frustrated by it.
For example, it took over 50 years for the telephone to reach about half of all American households; meanwhile, cell phones achieved 90 percent adoption in roughly 20 years and smart-phones will achieve 90 percent adoption in less than 10 years.
The US has always been exceptional at adapting and this has been a great strength. We forget that our adaptability helped us compete against Japan in the past three decades. At one time it looked as though Sony, Panasonic, Canon, Toyota and other Japanese companies would dominate the technological and industrial landscape forever. However, American ingenuity created new electronic markets and dominated them with companies like Microsoft, Apple, Google, Facebook and other high tech companies.
IBTIMES: What kinds of jobs and industries do you think will flourish once automation and globalization take full effect?
NOVIN: All kinds of jobs benefit from globalization because globalization results in greater international trade, creating greater domestic demand and the creation of new jobs.
As for automation, it is best suited for high volume repetitive tasks. Newer forms of automation like robotics and virtual robotics are no longer limited to simple tasks but richer complex tasks. Automation is not ideal for tasks that are unique or one-off tasks requiring a lot of thought, planning, interactivity and creativity – a robotic system is not designed to write music, film a movie, or create new flavors of ice cream.
Furthermore robotic systems are not going to come up with the next great idea, such as social-media. The ATM automated the repetitive tasks of withdrawing, depositing and transferring funds at the bank, freeing the bank teller of these highly repetitive tasks enabled them to become a relationship manager. New automation tools also create entirely new opportunities and jobs.
For example, social media has created a new form of personalized marketing tailored to the individual level and created new job opportunities such as social-media consultants and consulting firms. It’s important to remember that it’s not just technology jobs that are created but jobs that utilize competencies that leverage new technologies.
IBTIMES: Surely, some types of jobs will vanish forever, no?
NOVIN: Jobs don’t vanish -- they change for the better. For example, even the most automated assembly lines require human interaction and oversight. While machines may perform the majority of functions, like welding, people are still required to operate and manage the machines.
Of course, the operation, testing, maintenance, and construction of the machinery require more skilled labor than the work that was automated, however these new jobs bring with them higher wages.
IBTIMES: How long do you think unemployment in the U.S. will remain at these elevated (9 percent-10 percent) levels? Will economic growth in the U.S. be largely driven by the tech sector?
NOVIN: Today's high unemployment rate has more to do with fundamental problems with respect to our fiscal situation.
The current recession stems from the problems caused by the subprime mortgage markets, derivatives and other regulatory problems. Our recovery has been further hampered by European financial instability in Portugal, Italy, Greece, and Spain, add to this Japan's earthquake and China's relative slowdown.
Despite $14-trillion of debt and a host of other problems, the U.S. economy is inherently productive, agile and strong.
Our industries and corporations have enormous amounts of cash on the sidelines and the American worker is still among the best in the world - if not the best. We have the best system of government in the world and the best educational system despite all the criticism that we hear.
There is no question that the tech sector will be a major contributor to new jobs; in fact unemployment in the tech sector is roughly 3.5 percent as of January 2011, which is near full employment. However, new opportunities created by innovation will be the driving force behind a recovery.
For example, the Internet created thousands of jobs for software engineers, but it also created thousands of jobs for other professions like graphic artists, as businesses realized the importance of an attractive well designed website was also important. The accessibility of e-commerce platforms further empowered entrepreneurs to use the Internet as a global marketplace to sell everything from gift-baskets to used-cars.
Similarly, the tech sector will most likely create new innovations but broader growth will come from the ability of American’s to adapt and adopt these new innovations to improve productivity across other sectors of the economy.