THE DIGITALIZATION OF LABOR

Labor 4.0, Sharing Economy and Platform Cooperatism



By Patrick Stary



[This reading sample of the 2016 book "The Digitalization of Labor" is translated abridged from the German on the Internet, www.chbeck.de.]



The debate on the digitalization of the world of work has arrived in the German-speaking entertainment and economic journals. The terms Industry 4.0 and Labor 4.0 are central.



The term "Industry 4.0" is connected to the distinction between first, second and third industrial revolution emphasized in economic history and social science. In this division into periods, the first industrial revolution was marked by the mechanization of production through water power and steam power. The second industrial revolution was characterized by assembly-line production and the use of electrical energy and the third industrial revolution by the use of micro-electronics. The fourth industrial revolution as a contemporary link is distinguished by further automation and increasing computerization of production with new cyber-physical systems linked together at its center. However the term Industry 4.0 is not clearly defined. A generally accepted definition does not exist and its application seems limited to the German-speaking area.



The origin of the term Industry 4.0 can be dated from the year 2011. Starting from different groups of the World Economic Forum, the term accompanied the development of the "high tech strategy" of the German government… The term is closely connected with a future project of the German government for renewing German industry and opening up more potential profit and is not only a marketing label with constantly new boom seasons.



THE LINKED FACTORY



The vision of an Industry 4.0 age consists of the intelligent linkage of the whole value-creation process and the product life cycle. Intelligent objects record data about their state and their environment. This capacity for decentralized self-organized coordination of orders-, materials-, and information streams is used during the production phase of the product. In the application phase, the collected data helps for example in coordinating inspections, maintenance and servicing. At the end of the product's life, the stored product information is used in choosing the proper recycling channel for its components.



"Systemic solutions should be found that lead to greater quality of life, protect our foundations of life and safeguard competitive advantages for the economy in important key markets" (German Ministry for Education and Research 2016). Critical voices see a nationalist-location project for securing global competitiveness, "keeping the rivals of German mechanical engineering and manufacturing industries at a technological distance" (Kahrs 2015; cf. Butollo/ Engel 2015).



A SECOND MACHINE AGE

"The Second Machine Age," a book published in 2014, attempts to capture the digital transformation of work. In the title, the authors Brynjolfsson and Andrew McAfee, professors at the Massachusetts Institute of Technology (MIT) – refer to an analogy for the industrial revolution, the first machine age, and its characteristic technology, the steam engine. Brynjolfsson and McAfee were astonished at the rapid sequence of technological innovations that were regarded as impossible until recently. The self-driving car and the computer winning the television game show "Jeopardy" are included. According to their estimate, we are at a tipping point of exponential development whose speed increases again and far surpasses the speed of the first industrial revolution. The technological developments of the next years will be increasingly incredible: "breakthroughs that make science fiction into the daily routine" (Brynjolfsson/ McAfee 2014). Instead of the widespread pessimism among US economists, the book is full of technology euphoria. The two authors see serious social dislocations as well as regulation-, training- and distribution problems. Unfortunately their proposed political solutions are very rudimentary and disorderly. For them, deficient creativity in reflection is responsible. The resulting ecological problems of digitalization – from hardware production and disposal to energy- and resource consumption that go along with the predicted economic growth – seem entirely unknown.



"The Second Machine Age" represents a great progress narrative that a base technology is involved in information- and communication technology. This base technology is a meta-technology that opens the field for many new combinations of a growing number of innovations that cannot be immediately identified in measurable productivity increases. Base technologies will need necessary supplements. Their economic application must go along with a restructuring of business processes to achieve higher productivity. These processes run faster today than in the first machine age but also need their time. In the authors' opinion, today's measuring instruments can not adequately grasp economic progress and the increase in social wealth as a result of digitalization and thus need revision.



In dazzling colors, we are shown how robots and algorithms are ready to automate many activities like the manufacturing robot Baxter:

"Baxter can work all day every day and doesn't need sleep, lunch or coffee breaks. Baxter doesn't require any health insurance from its employer or increased personnel costs" (Brynjolfsson/ McAfee 2014).



That the authors did not draw the conclusion that human capacity for work could pass like the output of the horse in the first machine age that was increasingly replaced by machines is remarkable. Instead the automation pressure is limited to certain works, namely clearly structured manual and cognitive routine activities. In this regard, "the second machine age" is an optimistic book since our occupations in childcare, education, health care, nursing, supervisory and executive personnel will be less endangered than employees in sales and the catering trade when the speed of automation greatly accelerates (A. T. Kearney 2015). Another study of the ING DiBa following the study by Frey and Osborne forecasts 59% for the German labor market (Brzeski/ Burk 2015). In a comparable study, the Bank of England sees the potential automation of 15 million jobs in Great Britain (Haldane 2015).



POLARIZED EXPECTATIONS AND A NEW GLOBALIZED DIVISION OF LABOR



A survey of the Pew Research Center (2014) among 1,896 technology experts shows a clear polarization of automation expectations. While 48% of them are convinced of massive job losses for manual and cognitive work, an increasing income inequality and endangerment of the social order, 52% believe human resourcefulness will master this upheaval and create more new industries and jobs (Pew Research Center 2014). The future of work and information seems uncertain if these greatly divergent estimates are believed.



"Aspects of daily work like creativity, responsibility and independent thinking could conceivably be shifted back to "normal" co-workers so the robot becomes a friendly colleague and not a hostile rival. But it can also be very different. In other visions of modern factories, people are only responsible for repair work and works that cannot be automated at sensible costs. The work assignments and orders come from the software" (Kahrs 2015).



John Maynard Keynes dreamt of a future in which the work week of his grandchildren would only be 15 hours. The real tragedy of the future is a social system that seems unable to bring individual freedom from a possible gain in social freedom but instead threatens with a multitude of individual biographical catastrophes."



"The prospect of the `abridgment of labor' should fill us with hope rather than foreboding. But in our kind of society, there are no mechanisms for converting redundancy into leisure" (Skidelsky 2014).



We should prepare for the genesis of "completely new forms of a division of labor to be managed flexibly and globally. The commons could be established expanded by instruments like crowd-sourcing or cloud-working and the sharing- or platform economy, news and extremely variable constellations between offline and online" (Pfeiffer 2015).



A far-reaching restructuring of work conditions also occurs within the “smart factory.” The teamwork of these changes should be analyzed as a global production regime that assumes clearly despotic characteristics if the increasing data fixation and flexibility of workers or the working conditions of cloud-working and the sharing economy are emphasized.



"Since the immediate effects of Industry 4.0 on the industrial sector, in particular, will be significant and far-reaching, we should not ignore that Industry 4.0 represents at most a phenomenon in the production system of digital despotism" (ibid).



The texts of this book help in decoding the different facets of this change process and the inherent action possibilities of democratic joint determination.