Investment, Unemployment and the Cyber Revolution

  • Michelle Baddeley
Chapter
Part of the International Papers in Political Economy book series (IPPE)

Abstract

Internet and mobile technologies have brought many benefits, including productivity rises, more effective co-ordination of economic and financial activities, and new market opportunities. However, negative impacts are often ignored. Labour productivity, wages and life satisfaction may decline if workers struggle with, or are replaced by, new technologies. Online social networks, easily accessible via mobile technologies, create opportunities for distractions and shirking at work. Automation of an increasing range of jobs dampens labour demand and accelerates substitution of capital for labour. This chapter explores one facet of potential implications, specifically the impacts on long-term unemployment, as a proxy for secular stagnation. Relationships between gross fixed capital formation, computing investment and long-term unemployment for 17 OECD (Organisation for Economic Co-operation and Development) countries over the period 2000–2010 are analysed using panel estimation techniques. The findings suggest that increases in computing investment are associated with rises in long-term unemployment. The chapter concludes with an analysis of policy implications and potential solutions.

Keywords

Computing investment Long-term unemployment Digital economy 

JEL Codes

L14 L6 O33 

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Copyright information

© The Author(s) 2017

Authors and Affiliations

  • Michelle Baddeley
    • 1
  1. 1.Institute for ChoiceUniversity of South AustraliaNorth SydneyAustralia

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