Safety

Klaus Schwab predicted a new industrial revolution to begin in the near future in the World economy forum Global Challenge Insight Report (The Future of Jobs-Employment, Skills and Workforce Strategy for the Fourth Industrial Revolution [FIR] in 2016). Experts say that the FIR needs to be prepared because it will change the way people work, how they consume, and even how they think.

The industrial revolution led to changes in the labour market with machines replacing human labour. The first industrial revolution replaced manual work with the invention of a steam engine and the second industrial revolution enabled mass production using electric energy. The tertiary industrial revolution started the automation era with informatization based on computers and the Internet. In the future, the super intelligence revolution based on the Internet of things, cyber-physical system, and artificial intelligence (AI) will greatly change human intellectual labour.

The technologies that will lead the FIR are diverse. Artificial intelligence based on high-speed networks and interfaces would change the production process, and business models based on big data will be popular. The speed factory in Germany, which produces Adidas-personalized sneakers, is a typical example of the innovation of the production process.

The world has overcome differences of time and space by the development of information and communication technology, which has developed into a single economic system. The social network system has already changed the way people communicate. In the future, operational technology or cyber-physical system devices will monitor, coordinate, and integrate information in real time. Operational technology will lead to a hyper-connectivity society, with-machine, and human-human connections.

If human labour is replaced by machines, the labour market will be greatly affected. As technology develops, labour productivity increases, and new jobs are created. According to the US Department of Labour, American’s factory workers declined by two-thirds from 1960 to 2014, but productivity has increased dramatically. In addition, the average hourly wage from 1973 to 2014 increased by 85%, and new jobs were created in new industries. During the third industrial revolution, manpower shifted from the manufacturing sector to the service sector. The FIR is likely to change what kind of work needs to be performed, not just the number of jobs. For example, the role of product marketers is changing because of the emergence of big data, which is a core technology in the FIR Instead of market research using current surveys, the use of big data is increasing. Therefore, it is necessary to hire professional staff to collect, store, analyse, and distribute big data. Specifically, spending on the big data in information technology market worldwide has doubled from $27 billion in 2011 to $54 billion in 2016.

It is a global trend to change government systems to e-government, which automate administrative tasks and make it possible for services to be performed online. For example, the Austrian Administration Service provides information (https://www.oesterreich.gv.at/public.html). This change can increase productivity and reduce environmental pollution by avoiding unnecessary documentation and business trips.

At the national and whole industry sector levels, the FIR may have little impact, but it will reduce employment in local economies and individual industries. According to Acemoglu and Restrepo, introducing a single robot in a multinational corporation reduces the employment rate by 0.37 per 1,000 workers. By industry, the largest number of robots were introduced to the automobile industry, followed by the electronics industry and the raw materials industry. Robots were adapted more frequently in developing countries than in developed countries. In particular, the rubber and plastics industries, which are major industries in emerging countries have adapted 10 times more robots than developed nations Therefore, in emerging countries, low-skilled low-salary jobs would be threatened by automation.

Robot density: Because introducing robots would be profitable in repetitive tasks, industries are willing to substitute workforce to robots. So Carbonaro et al find out how much the impact of substitution of workforce. Robot density means one robot per 10,000 workers. Labour intensity is the relative proportion of labour, compared with capital, used in a process.

Future jobs will be polarized according to the nature of the jobs and whether robots can be used or not. A study by Frey and Osborne predicts that 47% of the jobs in the US labour market will be replaced by computers in the next 10 to 20 years. In the same way, Republic of Korea is a high-risk country, where 57% of all jobs are likely to be replaced by machinery. In 2016, 18 million people, or 70% of the total workforce of 25.6 million in Republic of Korea, are in high-risk jobs. In particular, the rate of substitution for cleaners and kitchen assistants is close to 100%. High-risk jobs range from blue collar, white collar, salespeople, to simple labour. Jobs that require performing repetitive tasks such as mathematical operations, data classification, and management are endangered. For example, salesclerks could be replaced by a system like the currently commercial “Amazon go”. The FIR could reduce the employment of low-skilled service workers and cause mass unemployment.

In addition, professions currently enjoying relatively high wages and high employment stability are likely to be replaced by AI and robots. Artificial intelligence Watson and remote telesurgery robots like Da-Vinci will replace human medical practices. Legal information can be easily accessed by the general public. In addition, standardized legal systems and the development of technology can threaten the work of lawyers.

There is also a concern that the inequality of labour income and capital income could deepen. According to Andrew McAfee (2012), productivity and employment rates were closely linked from the 1940s to the 1980s, but after the emergence of the Internet era in the 1990s, the employment rate did not increase as much as productivity growth. In the FIR era, the adaptation of automation and robots would increase inequality.

As AI-based platform business spreads, labour is likely to be treated as content traded on the platform. For example, “Uber” or “Airbnb” could significantly reduce transaction costs by directly connecting providers and consumers at the platform. They do not provide transformation services and accommodations by hiring employees or owning hotels.

Under the subcategorization concept of platform business, gig economy is an economic term in which a worker takes on temporary employment and contracts with several employers at the same time. Gig economy is categorized by crowd work and work-on demand via applications. Crowd work involves performing simple tasks like small-sized projects such as correcting website errors. Work on-demand via applications does chores for customers like purchasing clothes and retail items, and cleaning houses. Ideally, independent workers in the gig economy can work freely without the constraints of the labour space by using the Internet network as a self-employed status. Also, enterprises can easily achieve professional outcomes at lower prices. However, this represents the extreme form of the fissured workplace, whose characteristic is personal outsourcing. A lack of relevant regulations could exploit the labour force without limits and undermine employment stability.

Platform economy could aggravate worker environments by deepening job fragmentation. Job fragmentation refers to separating jobs to enable a product by outsourcing to a subcontractor or offshore to developing countries as well as digitalize or automate to reduce costs. As the fragmentation of labour progresses, “standard employment” the safe employment type, would decrease and nonstandard employment defined as dispatch jobs and freelancers will increase greatly. According to the Katz and Krueger data, between 2005 and 2015, the proportion of nonstandard employment in the United States increased significantly from 10.1% to 15.8%.

A platform economy can exacerbate precarious work conditions. Subcontract workers are apt to be isolated from occupational health and safety (OHS) coverage. This is because that the size of the business is usually too small and subcontractor workers are employed with short-term contracts. According to data from the Ministry of Employment and Labour, there were 28 accidents that more than 3 people were killed. For these 28 accidents, 109 workers died, and 93 people of 109 dead (85%) were subcontractors. Another data from Occupational Safety & Health Research Institute in Republic of Korea, as 2015, the numbers of workers who died due to industrial accidents per 10,000 workers was 0.39 in subcontracts, whereas the same ratio was 0.05 in main contract, which was eight times higher. Recently, safety accidents of subcontractors have become a social issue in Republic of Korea. The International Labour Organization (ILO) has already worried that nonstandard employment, such as subcontractors, daily workers, and freelancers, could threaten worker health and the stability of their lives

Thanks to globalization, accelerated by the FIR, multinational corporations could easily exploit the workforce and the environment of developing countries. Over the course of history, multinational corporations have established manufacturing factories in developing countries because of low incomes and lenient environmental regulations. As a result, the employment rate of the manufacturing sector in developed countries declined by 19% for 37 years.  However, plants result in socioeconomic problems in many developing countries because they are based on loose labour regulations and low wages.

In the era of the FIR, manufacturing will be developed in small quantity production systems of various kinds. Factories in developing countries are no longer attractive because low-wage workers can be replaced by automated robots. Rather, it is advantageous to place the production plant near the main market to quickly produce and distribute products. This is called “re-shoring”. In an Adidas Speed factory equipped with this system, AI-based robots perform most of the shoe manufacturing work. Some accessories were made with 3D printers, which reduced employment from 600 people to 10 people. If the re-shoring phenomenon continues, the power of economic development in developing countries will be lost and developing countries will endure a poor and risky working environment to secure price competitiveness.

The development of technology is a double-edged sword. You need to be prepared not only for the bright future that technology will bring, but also for the problems that will arise. The purpose of this study is to anticipate and prepare for OHS problems for workers in the era of the FIR.