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The Impact of Technological Change on Productivity and Skill Demand

Question:

Discuss about the Impact of Technological Change in Workforce.

Technology has critically influenced the production of goods and services throughout the world. Technology in today’s world provides the required forces in various organizations through various forms in order to produce goods and services. Technology is always vulnerable towards change, and the state of technology develops a direct connection with the employee and employer. Technology, capital, and workforce are interconnected. Therefore, change in technology will have a direct impact on the workforce of the organization. Investors and management take their decisions based on the area which can earn them maximum profit. In case the organization makes radical and rapid decisions, this kind of changes can create a huge problem in terms of labor cooperation as well as will reduce their morale leading to lower productivity.

The primary objective of this review is to determine the impact of technological change in the workforce. The review critically identifies the general theory behind the impact of technological change while providing suitable studies that have shown that technological change increases skill demand which leads to newer work practices. However, the impact of technological change on productivity is much higher at a firm level than the national level. In order to understand this theory future research must concentrate on estimating the relationship between technological change and skill as well as analyzing the impact of technological change on the human resource of the firm (Winner, 2010).

Advanced technologies are being introduced in organizations frequently which create a huge influence on the workforce of the organization (Askenazy and Caroli, 2010, p.547). In this literature review, a brief analysis of the introduction of technologies in organizations and its impact on workforce has been described. The main focus is not on any specific types of technology rather on how the new tools change the working culture as well as the environment in terms of workforce.

Technological innovation influences the changes associated with the working culture in an organization. The changes associated with it creates a huge impact on the workforce of the organization which may produce creativity in work, enhances skills both mentally and physically as well as affects efficiency and productivity. The effects that come with the technological innovations ensure additional challenges for the workforce. Therefore, it can be assumed that technological changes may not bring positive outcomes. However, in order to adopt technological changes coordination among workforce, connections with higher management, monetary assets as well as training for the workforce are desired for better outcomes (Örnebring, 2010, p.71). There is a need to enhance the potentiality of technological innovations, which has to be considered critically by the workforce. Doubtlessly, technological change has critically changes the working process in an organization and also enhanced its influence over the globe while enhancing the productivity and quality of daily activities. The impact of technological changes comes with a drawback as well specifically with higher management when the changes made are imposed on the workforce. It is essential to understand the view of the workforce towrads the technological change in order to achieve their acceptance as well (Bandiera et al. 2010, p.451). However, it can also be done in a way that should enable staffs best be conveyed to take the full favorable position of the potential accessible.

Impact of Technological Innovations on the Working Culture

Utilizing new innovations or technologies may cut down the quantity of staff expected to perform assignments, which will increase the demand for high skilled labor. Even there are relevant studies that reflect that few firms encounter an innovative stun that builds their request for high-skilled workforce and subsequently shapes the attention for high expertise laborers in terms of the supply of high skill laborers in the economy. This clearly states that the innovative shock enlarges the interest for low skilled workforce in terms of the supply of low-skill workforce at that point compensation for high expertise laborer’s increment in respect to that of low-ability laborers. The entrance to instruction and imbalance will have expanded, and even high-talented workforce in firms that do not encounter a mechanical shock will get higher wages in the short run (Black and Lynch, 2001, p.436). In terms of the increase in the capital of the company, the interest towards hiring high skilled workforce increases rather than the low skilled workforce, this in turn decreases the morale as well as wages of low skilled workers. While technology allows customers to associate with clients on the inverse side of the globe, it has in like manner diminished a segment of the trust and similarity that used to create from very close collaboration and phone dialogs. Without a doubt, even inside a comparable office, pros are as often as possible more inclined to visit electronically rather than physically walk around a work space or gather at the water-cooler. Development has furthermore extended touchiness to get occurs. Where agents or buyers once may have sat tight 3 weeks for a letter to answer their stresses, at those particular time this technology plays an integral role as it takes time to rsolve the issue manually. This kind of technological innovation also has a huge impact on the workforce. However, unless there is a requirement to laborers getting the higher aptitude or training, the arrival to instruction should tumble to the market rate in the long term.


Organizations that execute skill-based technological changes will procure generally higher talented workforce than low-skilled workforce. There are organizations that hire low skilled labour and provide low wages due to their capital and investment factors. The influence on compensation paid to high-skilled workforce in cutting-edge organizations contrast highly with the high skilled workforce as the demand increases (Boothby et al. 2010, p.660). Surveillance and the enhanced observation of Internet and telephone practice in the workplace keep on hovering issues in terms of workforce protection. This makes the necessity for work constrains approaches that legitimize the inevitable watchfulness of organization, and theories to screen and maintain those methodologies. However, such measures attempt to ensure that time and resources are used fittingly, workforce may disentangle these shields as uncertainty, or feel that all that they do is being seen. In an institutional work advertise, where showcase leases and market control influence wage results, workforce technical change can influence the size and dissemination of market leases crosswise over firms as it makes new item markets. For instance, mechanical advancements that prompted the formation of the computer, in the long run, came about in a move in showcase rents from IBM to a large number of computer creators. At the same time, innovative change can influence the conveyance of these rents amongst capital and work and inside work bunches as it influences the structure of bartering power.

Adoption of Technological Innovations and Its Influence on Workforce

This review utilizes information that contains technological innovation utilize factors at the individual level so as to dissect the effect of innovation on singular work showcase results (Sarin et al. 2010, p.152). One of the potential effects of workforce towards technological change is to enlarge workforce abilities as they figure out how to utilize another technological tool. Frequently, this is seen as an expansion in the profits to workforce or training, despite the fact that the workforce ability stock has really amplified. One skill that technological change might be in support toward is computer familiarity (Cascio et al. 2010, p.1091). The fundamental strategy of this review is to contrast workforce who utilize a computer with those that don't keeping in mind the end goal to assess the arrival related with computer utilize. Since computer control ended up noticeably libertarian and moved far from the centralized computer and to the desktop in the late 1970s, which was simultaneous with the take-off in wage imbalance, computer is a magnificent contender for a skill-biased technological change. As investigated by (Datta et al. 2010, p.341), the profits to computer utilize utilizing information which contains an assortment of computer use factors. They find that the level of respondents who guaranteed that they utilize a computer at work expanded from 24 to 37 per cent of the workforce in the vicinity of 1984 and 1989. Fitting a log profit work that incorporates a computer utilize fake variable, they evaluate that workforce who utilize a computer at work procure 10 to 15 per cent more than the individuals who don't. They presume that a computer utilizes premium could represent 33 per cent to one-half of the expansion consequently to training. These outcomes give to prove that innovative change can represent an expensive segment of the variety in compensation between gatherings; however, they offer no clarification for the developing inside gathering wage disparity. In light of (Datta et al.) and (Desai, 2010, p.731), look at information from the West German Qualification and Vocation Survey, which contains statistic factors and broad information on work assignments respondents perform at work, counting computer utilize, phone utilize, pencil-utilize, hand apparatus utilize, and work performed-while-sitting. To start with, Desai reproduces (Datta et al.) gauge and affirm that the German information bolsters the gauge of a 10 to 15 per cent computer utilize premium. They at that point rehash the estimation including fakers for other work errands. Shockingly, they find that utilizing a pencil at work restores a wage premium of comparative size to that for utilizing a computer. This outcome drives them to contend that there is some kind of choice or proportioning of specialists in those occupations utilizing office gear, and that (Datta et al.)’s suspicion of innovation as the causal factor ought to be addressed. Hence, it is evident that with the changes in technological advances, the workforce culture in various firms critically changes evolving from the era of computers. Technological changes decrease the employment growth which critically affects the morale of existing workers.

Conclusion


An equivalent adoption of technological innovations in workplace does not exist which will be implemented by each organization as different companies has different kind of workforce and management system. There are no evident examples as per the nation in which an innovation is presented either (Wagner et al. 2010, p.881). The more critical influence is on authoritative and manufacturing administration, in terms of the degree of a culture of development and different motivating forces. The rates of selection of new innovation or innovatory hones rely on their natural administrative and motivating forces. The rates will be most elevated where these motivators concur and most minimal where both are powerless (Fu et al. 2011, p.1211). The mechanical movements generally decades have much in an indistinguishable way from the effects of the Industrial Revolution in the last bit of the 18th century. Specifically, the improvements enlivened the evacuating of workforce by technology which could accomplish assignments speedier, definitely and throughout the day, consistently. Advancement engages business people to lessen overhead by reducing their workforce; individuals whose scopes of capacities are directly out dated have obliged choices for business if their present occupations are abstained from. The technological revolution cycle suggest that the implementation of new technology will consist of revelation, selection, dispersion and periodically procedures. The confirmation recommends that advancement infrequently relates to a direct model and that these stages may some of the time happen at the same time. It is evident from few studies that higher management and senior employees are more prone to approach new advancements while the junior workforce adopt the changes slowly (Oesch and Rodríguez Menés, 2010, p.521). In general this is not the case, as in few organizations higher management guides the subordinates to cope up with the technological changes in the workplace. In many parts of the world, senior management were customarily in charge of conveying new advancements to the consideration of their associations which degrades the morale of junior subordinates (Leonardi and Barley, 2010, p.29). It has been evident that management always seeks for employees who can adapt to changes that make the existing workforce vulnerable. Technological advancement can be achieved at ease in workplace if the social structure of the organization is well established. However, there is an evident fact which contrasts the idea as the process of implementation of technological changes is lower in distinctive settings. Concentrating on the apparent preferences of new advances, the apparent need, values held by staff companions and managers as well as correspondence systems speeds the selection of new advancements by management services experts (Levy, 2010, p.1). The review about embracing new advances is tremendous yet experiences a number of holes and shortcomings.


Even though technological changes create a huge impact on the workforce culture, it does have a positive influence as well. Technological advancement can make an organization to achieve its peak level while maximizing its profit margin only with the cooperation of the workforce (Mairesse and Mohnen, 2010, p.1144). Few researches has also suggested that technological changes in workplace indicate proficient and specialized occupations in every way to some degree as a result of new innovation. However, the employment of low skilled worker gradually decreases in the event generally with the appearance of new technology. Expert and specialized occupations are anticipated to develop completely and moderately, to some degree in view of changes anticipated in technological advancement. The demand of low skilled workers declines as the changes in innovation and the dissemination of interest progress in the direction of diminishing necessities for occupations in these word related gatherings. Innovation has given a level of correspondence never observed if it is well accepted at workplace. Currently, due to technological advances workers can really interface with each of the delegates, higher authorities and partners whenever desired, at any place. With this passionate augmentation in participation comes an expanded level of versatility in correspondence, empowering teammates to energize continued with association to where each individual may be. Joint effort is considerably more associated with, and served to an inconceivable level due to technological change. The review has helped to understand the mentality and outcomes of technological changes in the workplace and also its influence on the workforce. There are certain limitations in this review which has to be considered for further studies as well (Refer Appendix).

Conclusion

In this literature review, the impact of technological advances has been elaborately described with detailed information. The ages of the computer to the technological advances that have been evolved in the market has been provided with detailed information. However, it has a huge impact on the workforce which creates job loss, lowers their morale, poor cooperation among members as well as vulnerable towards their work. Therefore, to cope up with the shortcomings the management of the company must familiarize its members with the newest technology. With the consent of the workforce, newer innovations and working culture can be established which will be benefitted for both companies as well as its employees

Reference List

Books-

Winner, L., 2010. The whale and the reactor: A search for limits in an age of high technology. University of Chicago Press.

Journals-

Askenazy, P. and Caroli, E., 2010. Innovative work practices, information technologies, and working conditions: Evidence for France. Industrial Relations: A Journal of Economy and Society, 49(4), pp.544-565.

Bandiera, O., Barankay, I. and Rasul, I., 2010. Social incentives in the workplace. The Review of Economic Studies, 77(2), pp.417-458.

Black, S.E. and Lynch, L.M., 2001. How to compete: the impact of workplace practices and information technology on productivity. The Review of Economics and Statistics, 83(3), pp.434-445.

Boothby, D., Dufour, A. and Tang, J., 2010. Technology adoption, training and productivity performance. Research Policy, 39(5), pp.650-661.

Cascio, R., Mariadoss, B.J. and Mouri, N., 2010. The impact of management commitment alignment on salespersons' adoption of sales force automation technologies: An empirical investigation. Industrial Marketing Management, 39(7), pp.1088-1096.

Datta, D.K., Guthrie, J.P., Basuil, D. and Pandey, A., 2010. Causes and effects of employee downsizing: A review and synthesis. Journal of Management, 36(1), pp.281-348.

Desai, V., 2010. Do organizations have to change to learn? Examining the effects of technological change and learning from failures in the natural gas distribution industry. Industrial and Corporate Change, 19(3), pp.713-739.

Fu, X., Pietrobelli, C. and Soete, L., 2011. The role of foreign technology and indigenous innovation in the emerging economies: technological change and catching-up. World development, 39(7), pp.1204-1212.

Leonardi, P.M. and Barley, S.R., 2010. What’s under construction here? Social action, materiality, and power in constructivist studies of technology and organizing. Academy of Management Annals, 4(1), pp.1-51.

Levy, F., 2010. How technology changes demands for human skills. OECD Education Working Papers, (45), p.0_1.

Mairesse, J. and Mohnen, P., 2010. Using innovation surveys for econometric analysis. Handbook of the Economics of Innovation, 2, pp.1129-1155.

Oesch, D. and Rodríguez Menés, J., 2010. Upgrading or polarization? Occupational change in Britain, Germany, Spain and Switzerland, 1990–2008. Socio-Economic Review, 9(3), pp.503-531.

Örnebring, H., 2010. Technology and journalism-as-labour: Historical perspectives. Journalism, 11(1), pp.57-74.

Sarin, S., Sego, T., Kohli, A.K. and Challagalla, G., 2010. Characteristics that enhance training effectiveness in implementing technological change in sales strategy: a field-based exploratory study. Journal of Personal Selling & Sales Management, 30(2), pp.143-156.

Wagner, N., Hassanein, K. and Head, M., 2010. Computer use by older adults: A multi-disciplinary review. Computers in human behavior, 26(5), pp.870-882.

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