Alan Blinder, Pontus Braunerhjelm (moderator) and Lars Calmfors.
(from the left)
ALAN BLINDER’S PROGNOSIS for the US and the Western world may seem rather remarkable and provocative. In his research about off-shoring, he points out substantial globalisation effects on the American economy. In a decade or two, we will face a third industrial revolution that radically will change our way of living and working, says Alan Blinder. As a result of major progress in information and communication technology, in combination with improved economies in China, India and former Soviet countries, the global job market is going through major changes and tougher competition. According to Alan Blinder, more and more jobs become offshorable - particularly “impersonal services”, ie jobs that can be done at a distance.
- You cannot perform brain surgery on the other side of the world, but a phone operator works fine, explains Alan Blinder.
Improved technological progress results in more offshorable jobs, says Alan Blinder.
- This new phenomena is a large and important change that needs to be taken seriously and that will dominate the political and financial landscape for years ahead.
LARS CALMFORS, Professor of International Economics at the Stockholm University and member of the Globalisation Council, agreed with Alan Blinder that globalisation will change the future job market. However, he was sceptical regarding the third industrial revolution scenario.
- It will affect salaries and jobs, but I don’t believe it will lead to a revolution. It doesn’t necessarily have to be all negative for the West European job market. Globalisation will most likely make Europe’s job market more flexible and may even strengthen it.
THEY BOTH AGREED that major changes are not entirely uncomplicated for Western economies.
- During the transition, job mismatches and structural unemployment will be a problem. To solve this, we will have to make sure that people losing their jobs because of off-shoring get an opportunity to re-educate themselves. For example, when a phone operator in the US loses her job, she should be able to re-educate herself, says Alan Blinder.
THE SAFETY NET, particularly in the US, is not dense enough compared to Sweden. It will have to be improved. Invest more in research and innovation, says Alan Blinder. That is an important factor for the US to become more competitive in the future. According to Lars Calmfors, Sweden should offer severance packages and salary insurance to a larger extent as future compensation.
Emelie Ring