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UNEMPLOYMENT AND THE LABOR MARKET UNDER THE INFLUENCE OF THE
DIGITAL ECONOMY
Samiyeva Gulnoza Tokhirovna
Associate Professor of the Department of
"Innovative Economics" of Karshi State Technical University, PhD
Kurbanova Dinora Abdug'afforovna
Master's student of Karshi International
University, specialty 70410102 - "Economics"
Annotation:
The article discusses the main indicators of employment in the labor market,
prospects for the transformation of employment in the context of the transition to a digital
economy. The main current problems in the labor market and the factors that will lead to changes
in the future are identified. It is noted that a decrease in the number of economically active
population will entail a decrease in supply in the labor market.
Keywords:
digital economy, digitalization, labor market, employment, employment and
unemployment rates, labor productivity, information and communication sphere.
Introduction.
Once upon a time in the past, our ancestors dreamed of mechanization,
automation and, of course, new technological implementations, they really wanted to improve
the quality of life, as well as simplify hard work and increase wages. In the 21st century, their
dream comes true and even more, scientific and technological progress is growing more and
more, we can say that we are close to a qualitative breakthrough.
In recent years, our scientific dictionary has become richer with new international words, such as
the Internet, e-government, online, know-how, information and communication technologies,
computer technologies. Today, new phrases are especially important for humanity - digital
television, digital library, digital economy. In general, if we say it in the most simplified way,
then digitalization is the process of introducing computer technologies and the Internet into all
spheres of our lives. Digitalization is moving countries in the world towards the nearest path of
development.
If we talk about artificial intelligence or know-how, electronic money transfers or technological
innovations, this is very modern and high-quality. But there is something that worries scientists
and economists. Innovations have entered our lives in a continuous stream, and these social
consequences of the introduction of new technologies are sometimes severe. For example,
previously, new work was found for those who lost their jobs, now the situation is much more
difficult. Firstly, new technologies are being introduced simultaneously and very quickly in
many areas. For example, we are surrounded by robotic cash registers in many supermarkets, in
developed countries, cars with autopilots are already driving on ordinary roads. This means that
very soon millions of cashiers and drivers will be left without work. Already today, accountants,
lawyers, office workers are regularly fired en masse in the largest banks of developed and
developing countries, since robots can easily work instead of them. Another example, former
McDonald's CEO Ed Rensi said in an interview with the American Fox TV channel: it is easier
for a company to buy a robot for $35,000 that will make hamburgers and French fries than to
hire a person, train him, and pay him $15 an hour [1]
Secondly, the problem is that the disappearance of old jobs today is not accompanied by the
emergence of new ones - thousands of jobs simply disappear. Information technology is very
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easy to scale.
Unfortunately, mass unemployment is inevitable here. And it can cover the society of developed
countries much earlier than skeptics currently assume. Everyone knows how quickly mobile
phones spread, they then quickly acquired cameras and full access to the Internet. Experts
believe that robotization will begin to destroy jobs en masse in the coming years. And also, the
speed of technological change is increasing so quickly that many of us do not have time to keep
up with the times. Today, smart machines compete with people, they win in the eyes of the
employer. Economists are concerned: will artificial intelligence cause mass unemployment?
Here it is necessary to assess the impact of the digital economy on the development of labor
resources not only at the level of specific regions or countries, but in general on the international
market, taking into account migration processes. But it is worth noting that artificial intelligence
does not affect the level of mass unemployment, but at least in the coming years. In the table
below we can see this, it is worth noting that "smart cities" are in the last rows in terms of
unemployment.
Table 1. Unemployment rate in some countries of the world
№ Страна
%
№
Страна
%
1.
Nauru
90
16.
Ukraine
9,2
2.
Turkmenistan
70
17.
Turkiya
8,1
3.
Mozambique
60
18.
Uzbekistan
8
4.
Namibia
51,2
19.
Finland
7,9
5.
Kenya
42
20.
Great Britain
7,7
6.
Afghanistan
36
21.
USA
7,4
7.
Macedonia
28,8
22.
Canada
7,2
8.
Greece
27,4
23.
Argentina
7,1
9.
Cyprus
17,3
24.
Germany
5,3
10. Egypt
13,2
25.
Russia
5,2
11. Mongolia
12,2
26.
China
4,1
12. Italy
12
27.
Japan
3,9
13. European Union
11,1
28.
South Korea
2,9
14. France
11
29.
Singapore
1,9
15. Saudi Arabia
10,8
30.
Thailand
0,5
Scientists and skeptics, analysts talk a lot about the fact that very soon a person can be replaced
by a machine, but work for a person will remain where he can work better than a machine. Here
we agree that the main thing is still the development of human capital, but it should also be noted
that in this case the key problem will be the quality of education, changes in the labor market, etc.
Innovative education affects the quality of university graduates, and the innovative economy also
threatens unemployment, like the digital one. Innovations not only reduce the need for certain
professions, they change entire markets. According to our forecasts, very soon (2018-2025) a
critical mass of specialists will accumulate who are not needed by the market, but who have
diplomas from prestigious universities in fashionable specialties at the time of admission. At the
same time, the number of qualified people who will not be able to adapt to changes on their own
will grow. Changes in the labor market are a clear example of the impact of digital technologies
on our lives.
Overcoming the shortage of personnel and low unemployment should be ensured in two ways:
firstly, for new personnel, this is a radical change in curricula, their maximum adaptation to the
individual abilities of the student. Secondly, for people with qualifications, a retraining system is
needed to work in the digital economy.
The tasks that we have to solve are formulated quite clearly:
1. It is necessary to form an adequate system of professional competencies in terms of
knowledge and skills in information and communication technologies for all types of professions
and specialties;
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2. Taking into account the constant changes and development of ICT, this system must be made
as flexible as possible, "self-adjusting";
3. It is necessary to build a system of continuous retraining of the teaching staff.
For the system to work, the new approach to training must change at all levels of the educational
process. General digital literacy should become the basis, on which a system of applied practical
classes should be built. There is a need for close integration with market-leading companies,
which should formulate needs, define a set of competencies, provide opportunities for internships,
and provide feedback on the quality of training of specialists [2].
In the regions, flagship universities can become a kind of conductor of new educational trends in
the digital era. In particular, in Uzbekistan there are universities such as TUIT, Turin, Inha, etc.
They are tasked with changing the educational infrastructure and creating a new learning
environment where formal and informal education will be integrated, as well as potential
employers and future specialists will be brought closer together. Specialists must be constantly
ready for change.
It is imperative to introduce the competencies that students need to be given, first of all, these are
innovative skills and thinking. There should be internships abroad, lectures in English so that
students can integrate into the international economic environment. It should be emphasized that
previously the need to "reboot" the education system arose once every 20-30 years, but now a
mechanism is needed to update it every two to three years.
Nowadays, modernization of anything leads to a thorough shake-up of the labor market. Demand
for some professions increases, while others almost die out, being replaced by new ones. The
scale of the transformations still does not provide a clear answer to the question: how to
overcome unemployment if entire industries begin to die out?
The main thing is to understand the place of a person in the economy of the future, to develop the
actions of labor market players in relation to a person whose role and place in the labor process
are radically changing. And first of all, this will require a completely different regulation, the
emergence of more flexible legislation. Due to the introduction of the digital economy, it is
necessary to make changes not only to the Labor Code, but also to by-laws on labor law issues.
A major breakthrough would be legislative changes that allow for the automation of personnel
records management, the transfer of the work book, employment contract and many other
documents to electronic form. As a result, a lot of time would be freed up for both HR specialists
and employees.
Recently, many new employment formats have appeared: flexible, remote, self-employment,
freelance. All these formats need reasonable regulation in order, on the one hand, to provide
people with social guarantees, and on the other, not to push them to move into the shadow zone.
In our republic, before the introduction of the digital economy, there are some problems that
must be solved. At the prevailing initial stage of structural reorganization of the economy, the
local level of the labor market prevails. This is due to the low territorial mobility of the
population, the low standard of living of the majority of its members, the high cost of
transportation expenses, and the lack of a developed housing market. In these conditions, it is
extremely difficult to balance the demand and supply of labor within specific localities, which
leads to quite sharp differences in the unemployment rate. The regional level of the labor market
in Uzbekistan is represented, first of all, by the subjects of the regions. Such subjects have not
only a territorial economic character, a regional system of population settlement, but also the
appropriate governing bodies for the implementation of their own regional policy in the sphere of
the labor market, including employment of the population. Compared with other regions, this
economic region has the most contrasting specialization. And also by the level of economic
development, the peculiarities of its transformation, population settlement, and the availability of
personnel [3].
Employment characterizes various forms of participation of the working population in public
activities with the receipt of corresponding income. The labor market is formed under the
influence of factors determining the demand and supply of labor. Factors of labor supply include
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the demographic situation, the gender and age structure of the population, the dynamics of the
working-age, employed, unemployed population, internal and external migration, the level of
education, etc. Factors of labor demand are determined by the dynamics of economic growth, the
introduction of new enterprises, sectoral and territorial development, measures of fiscal,
monetary, investment policy, etc. The features of the transition period and the demographic
situation determined the model of employment policy in Uzbekistan: a model of rapid response
to a high level of labor supply. To relieve tension in the labor market, the state annually develops
and implements Programs for the creation of jobs and ensuring employment. However, the
administrative nature of their implementation, which is expressed in the creation of “gross” jobs
“at any cost” without due attention to their sustainability, as well as the lack of specific
mechanisms for providing benefits, subsidies, and sources of funding for job creation projects,
leads to an unsystematic solution to employment problems [4].
Table 2.
Challenges in the field of employment and the consequences of their impact on the
economy of Uzbekistan [5]
Risks and problems of labor market
development in Uzbekistan
The most likely consequences for the economy
and prospects for increasing its competitiveness
Significant excess of labor supply over
demand
Rising unemployment (especially youth and
women) and social problems. Maintaining a
high level of labor migration (including young
people with higher and secondary specialized
education)
Low efficiency of new jobs created in the
small private business sector
A lack of technological progress negatively
affects the efficiency of revenue generation,
ultimately diminishing the government’s ability
to finance social development initiatives
High proportion of people employed in the
informal sector of the economy
Weak prospects for sustainable long-term
economic growth, increasing macroeconomic
imbalances (cash circulation, foreign exchange
transactions, etc.), preservation of technological
backwardness, worsening crime situation
Significant lag in the level of
efficiency of labor resources compared to the
leading developing countries of the world
High levels of labor productivity are associated
with high competitiveness of the economy and
its
attractiveness
to
foreign
investors.
Maintaining the current gap will worsen
Uzbekistan's position in the competition for
foreign investment.
Lagging dynamics of labor productivity
growth relative to real wage growth
The growth of population income is one of the
main factors stimulating aggregate demand and,
accordingly, the rate of economic growth.
However, sustainable growth of competitiveness
is impossible in conditions where the rate of
wage growth exceeds the growth of labor
productivity. In such a situation, along with the
undermining of competitiveness, inflation risks
increase, since the demand for goods and
services begins to outpace their supply.
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Lack of financial resources (private and
public) for the purpose of creating new jobs
In the absence of a stable demand for jobs in the
non-resource sector of the economy, the state
distributes available investments into the
resource sectors (oil and gas, primary processing
of mineral resources), which are attractive to
foreign investors, but which do not solve the
problems of effective employment of the
working population and the growth of the
competitiveness of the national economy.
According to our research, unemployment is a natural phenomenon, as stated in neoclassical
theory. This theory was developed in the works of A. Samuelson, M. Feldstein, R. Hall, D.
Gilder, A. Laffer and others. All of them considered the labor market as a heterogeneous and
extremely dynamic system, subject to internal laws of self-development. The main regulator of
this system, in their opinion, is the price mechanism.
In Uzbekistan, in the coming years, it will be time to think about the introduction of a digital
economy, as a wave of innovations comes from countries around the world ready to implement
investments in the form of innovations. Therefore, drawing a conclusion, we must very quickly
learn innovations, have innovative thinking, teach and prepare children from an early age for
new professions, be ready for changes in science and technology.
References:
1. N. Dembinskaya. Robots are working hard: who will be left without work in 5 years // RIA
Novosti, 2017
2. From the report of D. Peskov on the program "Digital Economy", // 2017, July
3. O. Yu. Sushkova. Labor market and employment of the population - Voronezh, 2008
4. Information business portal of Uzbekistan. Trends in the labor market of Uzbekistan. 2017
5. Employment in Uzbekistan: challenges and prospects. Center for Economic Research. 2018-
2024
