Why the Adoption of New Technology Leads to an Increase in Supply

How Technological Change Impacts Job Design

Imagine a job as a collection of tasks that necessitates different skill sets. Introducing new technology can enhance employee productivity in certain tasks, create new tasks, and replace employees in others. Consequently, companies modify job designs — the combination of tasks assigned to workers — and subsequently adjust their demand for workers with varying skills.

Automating tasks through machinery or software offers numerous advantages. It reduces variability since machines tend to perform consistently every time, thereby minimizing uncertainty and enhancing the quality of decisions, products, or services. Machines, especially computers, often result in significant economies of scale. Companies can avoid the complexities associated with managing employees, such as conflicts, incentive problems, and absenteeism. Thus, when the cost of automating a task decreases sufficiently, firms are inclined to automate that particular task. Naturally, computing costs have plummeted rapidly while computer capabilities have increased exponentially. Consequently, computerized automation has gained momentum over the past three to four decades.

In the early days, technology primarily improved the productivity of low-skilled manual laborers by providing better tools, machinery, and cheaper raw materials. This manifested in the gradual mechanization of agriculture and the shift from artisanal to factory manufacturing in the late 1800s [2]. However, around 1910, new technology began to favor middle- and high-skilled workers. Factories transitioned to electric power, facilitating batch or continuous production methods and assembly lines. Consequently, factory foremen, machinists, and managers became more productive, overseeing greater resources and output. Meanwhile, many manual jobs were mechanized.

This is an early example of a broader trend. Technology sometimes complements employees by enhancing their ability to perform certain tasks, and at other times substitutes for employees by automating some or all of their tasks. In this way, it reshapes job design by refocusing employees on tasks that are challenging to automate. Furthermore, the impact of new technology can change over time. It initially complemented low-skill work, later substituting for it while complementing middle- and high-skill work. Presently, it complements high-skill work but often substitutes for middle-skill work. It is reasonable to assume that the effects of information and communication technology (ICT) may evolve once again in the future.

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For instance, numerous medical diagnostic tests have been automated, resulting in the elimination of many medical technician positions. Certain nursing tasks have been replaced by bedside machines that monitor patients and dispense medicine, but the interaction between nurses and patients is predominantly impossible to automate. Finally, although all surgeries are still performed by human surgeons, these surgeons possess advanced tools that allow them to conduct these operations more swiftly, safely, and effectively. Both nurses and surgeons still play crucial roles, but the nature of their jobs — the tasks they carry out and the amount of time spent on each task — has been significantly altered by technological advancements.

This process can lead to substantial variations in employees’ work [3]. Jobs that are primarily automated tend to involve managers making most or all decisions, with workers simply executing their assigned tasks. This is because most of the processes have already been optimized, leaving little room for workers to contribute new knowledge, make decisions, or effect changes. These jobs typically require minimal skills, consist of repetitive tasks (which are still too expensive to automate), involve little critical thinking, and thus, offer low intrinsic motivation. Conversely, jobs that are complemented or created by technology tend to demand more skills, including problem-solving and social skills. They often encourage decentralization, allowing employees to learn, develop, test, and implement ideas and solutions. Consequently, such roles provide high intrinsic motivation. Consistent with these concepts, investments in ICT and research and development are positively linked to enriched job designs, large-scale organizational changes, continuous improvement, and increased competition.

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5 WS

By rewriting the content while retaining its essence, we can understand why the adoption of new technology leads to increased supply. Technological advancements impact job design and employee tasks, ultimately changing the nature of work. As technology continues to evolve, its effects on different types of work will vary. Nevertheless, incorporating new technology often leads to improved productivity, streamlined processes, and enriched job designs.

The 5 Ws and H are questions whose answers are considered basic in information gathering or problem solving. 5ws.wiki will best answer all your questions

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