New Oxford Study Suggests Tech Companies Do Not Create Jobs for the Many

Despite the recent reports on job growth, a study from the Oxford Martin School and the University of Oxford is suggesting that in the future fewer people will work at traditional jobs compared to digital ones. The study looked at jobs that did not exist in the 20^th century and followed how many workers stayed in those industries over the years.

In the study, "Industrial Renewal in the 21^st Century: Evidence from US Cities", authors Carl Benedickt Frey and Thor Berger, go though data on 1.2 million workers in the US and identified new technology industries. The majority of the 71 new industries are digital ones including video and audio streaming, web design, but also renewable energy and biotech.

Frey and Berger compared major digital companies like IBM, Dell, and Facebook. IBM and Dell have 431,212 and 108,800 workers respectively, but Facebook's work force only totaled to 7,185 in 2013. Forbes points to a line in the study that explains these numbers.

"Because digital businesses require only limited capital investment, employment opportunities created by technological change may continue to stagnate as the US economy is becoming increasingly digitized."

James Pethokoukis writes about the study in American Enterprise Institute blog, "The digital economy is creating wealth and jobs only for a few." It's a theory that is demonstrated in a comparison between cities like San Francisco and Detroit. The former has many jobs and wealth, while the former has people who have been made redundant and therefore poorer.

There are a few ways to prepare for this future, should it happen nationwide. The first one is to get started early with the right education. The areas where there was the most digital job creation also had the most college educated workers, who were more likely to have a STEM degree. These kinds of workers can adapt easily to changes in technology.

The second point was location, with the new digital jobs tending to focus on cities where the population is highly skilled such as San Francisco or New York. The proximity of digital jobs also brings work to the businesses that serve the companies and their workers.

There has been discussion over the growth of technology employment before. Fortune writes, "Optimists argue that throughout the history of capitalism, new technologies have always led to new jobs in the long run. But pessimists say that this trend isn't guaranteed to continue, and the chance that we are in an era where wealth is created without jobs raises very thorny questions about how that wealth will be distributed fairly."

Freelance type jobs and other flexible work was not evaluated but considering the results of the study it might be an alternate field for job hunters to look for opportunities. These kinds of jobs are not necessarily tied to location either so workers maybe able to avoid the high cost of living cities like San Francisco and spread their income elsewhere.