Modeling The Relationship Between Industrial Employment And Information And Communication Technologies

In this paper, we develop a model to measure the effects of Information and Communication Technologies (ICT) on the labor market, aiming to settle down its net effect on employment creation. The main findings are: 1) Related with the sector services, where the regions with worse evolution of the industrial employment showed growth in the information society sector services, being it intensive in technology, and a certain negative incidence employment growth in the sector services in general and in the industrial one, 2) Related with the ICT, where two variables have a negative effect on the employment growth: the extranet and the own wireless net. This negative incidence has its base on the positive relationship between productivity and technology. This way, the ICT integration into the industry causes smaller new workers needs. 3) A second group of estimates highlights some of the factors that have influenced the recent industry evolution. The most prominent effect is the incidence of the ICT on the added value. The regions where there is more penetration of the ICT are the ones having bigger industry relevance in the Spanish economy. 4) In addition, the difficulties to find ICT skilled workers specialist is a factor that hinders the added value growth. These results reveal the need of a public policy favoring the skilled labor and the company’s technological advances. The conjunction of both factors will improve the industry long-term benefits. 5) A last effects group reveals that regions with bigger industrial production growth have also a bigger growth of the employment in the services sector. INTRODUCTION Technological innovations and employment The relationship between technology and work is an important, old and controversial field of discussion in the economic and social analysis. In the academic literature, two big tendencies coexist. The first one, the so-called compensation theory, states the positive and long-term influence of technological change on employment. The second, affirms that the technological change weakens, or even eliminates, the positive relationship between technology and number of jobs. Several investigations -e.g. OECD, 1998show clearly that the technological progress is associated to a high occupation growth, mainly of the skilled labor. Nevertheless, when tying to verify if the most innovative organizations are also the ones creating more employment, must be kept in mind the effects on their rival companies: maybe the innovative firms do create employment but at the cost of destroying it in less competitive rivals. Overall, the effect of the technological change on employment is the combined result of innovations in productive sectors, of the labor markets (internal and external) existing conditions and of the economic activity institutional frame. When a knowledge intensive company introduces an innovation that increases its labor force, the effects spread to other sectors. The lost jobs due to the technological change tend to take place in the manufacturing sector and among the less skilled workers, while the new ones require more and different skills and concentrate on the services sector. The final effect will be positive if the necessary conditions are fulfilled: mainly macroeconomic stability and macroeconomic efficiency, besides others relative to the adjustment to the labor market changes and the adaptation of the institutions influencing it. Besides, there are forces that, spontaneously, could compensate the short-term occupation reduction, resulting from the technical change. These Proceedings 23rd European Conference on Modelling and Simulation ©ECMS Javier Otamendi, Andrzej Bargiela, José Luis Montes, Luis Miguel Doncel Pedrera (Editors) ISBN: 978-0-9553018-8-9 / ISBN: 978-0-9553018-9-6 (CD)