Every year, millions of young people enter the labour markets in Asia. Creating sufficient jobs to meet this demand is a huge challenge. What solutions work best needs to be determined in the local context. What this essay aims to do is look into the global opportunity structures for development, and reflect on what changing conditions could mean for the ability to create employment in Asia’s emerging economies.
The global window of opportunity for development is closing
Ever since the Second Industrial Revolution started to peter out in the 1960s, global capitalism has faced a crisis of consumption demand. The decades that followed have been described by Wolfgang Streeck as buying time to address the root cause of the crisis: that consumption demand grows slower than the increase in productivity. The inflation of the 1970s, the public debt of the 1980s, the private debt of the 1990s and the quantitative easing of the 2000s were all strategies to create demand by injecting future resources for consumption at present.[1]
While all of these temporary fixes necessarily led to major crises, they bought the time needed to implement five strategies to “repair capitalism”: 1) the rationalisation of production through technological automation aimed at increasing efficiency; 2) the globalisation of production by offshoring, profiting from cheap labour cost in developing economies; 3) the neoliberal approach to free the supply side from any “political cost,” such as by lowering taxes, cutting back welfare and depressing wages; 4) financialisation as a strategy to sidestep the crisis by looking for profits in the financial markets; and 5) the digital revolution, understood by Philipp Staab as the latest attempt to tackle the consumption crisis by rationalising the consumptive and distributive apparatus.[2]
So far, none of these strategies has succeeded to resolve the consumption crisis. On the contrary, deindustrialisation and automation have contributed to the crisis by creating un- and underemployment in the old industrial countries, leaving fewer people with disposable income for consumption. The series of financial crises has shown the risks of the financialisation strategy. Finally, the promise of digital capitalism to create new consumption demand may equally backfire, when digital disruption automates middle class jobs and further erodes consumption demand.[3]
Which of these global trends will reverse, continue or accelerate?
The technological rationalisation of the production apparatus, propelled by increasing global competition, will certainly continue. Despite the significant contribution of automation to unemployment[4], there has been no widespread political resistance to it. Most of the public anger focuses on globalization and trade. Rising productivity, on the contrary, is celebrated as the only way to survive the breakneck global competition. In the absence of any political pushback, then, digital technologies like 3D printers have the potential to unleash a new wave of productivity increases through automation.
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