As the Singapore economy transitions towards a low-growth environment, is it a new normal to see unemployment rates go up?
As we raise productivity across all industries in Singapore, would that create more jobs or would that result in higher unemployment because one man can now do the work that used to take five men to perform ("Many prepare for hard times by improving skills"; last Thursday)?
Massachusetts Institute of Technology professor Erik Brynjolfsson and his colleague Andrew McAfee have argued that technology is destroying jobs faster than it is creating them, particularly jobs done by the middle class (managers, clerical work and so on).
They claim that technology can result in healthy economic growth, but weak jobs growth. It particularly benefits higher-skilled workers in IT or engineering, while low-skilled workers experience minimal uplift in their well-being.
As we focus on productivity, automation and robotics, we might even experience a phase of negative or no economic growth, coupled with deflation.
I believe this is a normal thing when companies become more productive, are able to cut their cost and pass the savings to consumers in the form of lower prices.
Productivity is here to stay and it must stay. Rising unemployment is not impossible in the near future, particularly as we move towards greater productivity and lower growth.
The question now is whether we are able to transition ourselves to ride the wave of productivity or whether we will be drowned by it.
Ng Chee Siang