Will blockchain be a net loss for jobs?
By Scott Dennis March 4, 2017
It is early days in the world of block chain technology, so why worry about its effect on jobs? If you buy into the hype that is being dealt from bit coin fueled startups all the way to IBM’s New York headquarters then you would believe that the impact of blockchain will be no less as important as the internet. The internet is the world’s greatest printing press, disseminating information globally with limits however in its ability to trade items of value in a secure way. A new way of trading is essentially the promise of blockchain, employing the same technology that makes crypto currency detached from the usual gate keepers of money, developers imagined an open ledger where business transactions are ultra-transparent with an incorruptible digital trail. With blockchain the only element missing is the kind of trust that traditional banks currently enjoy, which advocates hope will come over time.
Will jobs be lost?
If champions of blockchain compare it so closely to the internet then in may be helpful to analyze its future impact on the job market by asking “has the internet been a job creator or destroyer?” As of this writing Snap Inc. a company that lives online is having its IPO rolled out and it will be put up on the bookshelf of e-businesses throwing off billions of dollars on paper. Despite the high profile earnings of similar companies and their millions of users the jury is still out on how the internet has affected workers. The Economic World Forum has this to say in regards to internet effect on employment:
“According to calculations, current trends could lead to a net employment impact of more than 5.1 million jobs lost to disruptive labour market changes over the period 2015–2020, with a total loss of 7.1 million jobs—two thirds of which are concentrated in the Office and Administrative job family—and a total gain of 2 million jobs, in several smaller job families.”
On the other hand McKinsey & Company has leveraged its resources to come up with an alternative perspective:
“The Internet’s impact on global growth is rising rapidly. The Internet accounted for 21 percent of GDP growth over the last five years among the developed countries MGI studied, a sharp acceleration from the 10 percent contribution over 15 years. Most of the economic value created by the Internet falls outside of the technology sector, with 75 percent of the benefits captured by companies in more traditional industries. The Internet is also a catalyst for job creation. Among 4,800 small and medium-size enterprises surveyed, the Internet created 2.6 jobs for each lost to technology-related efficiencies.”
Why the confusion?
Analysts can come up with very different perspectives when asking questions about new technology because jobs need to be seen as different labor families, grouped into clerical, industrial, managerial for example. Technologies like blockchain will mean different things to different people or labor families. What we can say for sure is that blockchain has some important goals to improve market transactions, if you are working as an intermediary along a logistics, trade or other commercial chain the target is squarely on your back. This is how blockchain offers added value fiscally, by blowing away an assortment of gate keepers that are seen as expensive and potentially unreliable. The near term question will be if the assurances of security and transparency are enough of a tradeoff to cast off many traditional jobs, only time will tell.
Scott Dennis writes for Blue Collar Think Tank