If we live in an era when incredibly rapid technological change is actually changing everything, how come large parts of the EU are facing sustained economic crisis? How come nationalism, xenophobia and racism is spreading throughout Europe when advances in information technology ought to have us set on a path towards a better and wealthier society?
I admit that I find myself nodding my head when I read economist Paul Krugmans column “The Big Meh” where he concludes that the hype of the technological revolution that we’re experiencing is bigger than the impact it is making on society. If everything really was new and different, then there would be a net result in factors that really matter, such as youth unemployment rates and general welfare.
A disturbing reality is that advances in information technology so far has failed to translate into increased productivity for society as a whole. Krugman points to this. The manufacturing sector saw great productivity increases during the 1990’s and early 2000’s but is now back on low levels characteristic for the 1970’s and 1980’s. For a minority of the workforce the last decades may have been one of a sense of great progress, but for the many there has been status quo or little economic progress.
We may be carrying a world of information in our pockets, but how does this progress in information technology translate to progress in the physical world? Or more drastically stated, how can having a Twitter account and owning an iPhone get you a job if you lack the right qualifications and live outside one of the great economic hot-spots? They can’t, of course. But it points to the problem, that much of the progress that we experience in information technology has not translated into productivity, jobs and welfare. For example, youth unemployment in the EU has been skyrocketing during the whole iPhone era, which has been a decade of economic crisis.
Swedish general unemployment rates may not be particularly high from an EU perspective sitting around 7-8 percent, but still high from a traditional Swedish perspective. The high youth unemployment rates is a long term challenge to society that must be dealt with. But as long as productivity increases are stuck on today’s low levels this will be a challenge, to say the least. There is a lot of talk about education and matching nowadays, a consequence of a growing concern that a large fraction of the workforce is considered unskilled or unqualified for the requirements of the job market. If this fraction continues to increase, I fear there will be no end to the growing sense of crisis and blaming on scapegoats that drive nationalism, xenophobia and political extremism that we see in Europe today.
There is almost certainly not one single big solution that will be the fix of everything, but on the other hand there is no point in resigning. For myself, I have as late as today been involved in discussions regarding summer jobs for students, social enterprises and how public procurement policies influence the market for small businesses. There are many small things that can be done on a local scale that can have a big impact on individual people’s lives. But very little of this is related to rapid technology transformation or anything with even a vague resemblance to something like a “new economy”.