Combine this with tech advancements that requires fewer people, better utilization of tech that causes fewer people to be needed and increased knowledge of what tech (which is constantly decreasing in price) can do to reduce the need for people. This will accelerate as the ultra tech-savvy young replace the older tech phobic workers.

Oxford Analytica looks into the possibility of a “jobless recovery” in a new report. “With some — albeit highly disputed — signs of recovery in the global economy, there is growing debate on what form this might take.”

“Both recent experience and economic theory would suggest that a return to growth, at least in the short term, might not be accompanied by an increase in employment.”

In 2001, after the burst of the dot-com bubble, recovery was fairly rapid. However, though mature economies already had seen a return to growth by 2002, employment did not recover in the same way. Rather, it continued to lag behind.

Economic theory offers a possible explanation as to why the effect of downturns on labour demand can be extremely long-lived or, in other words, why recovery, in effect, can be ‘jobless’:

• When there is a downturn in economic activity, employment rates fall (ie jobs are lost) and companies stop investing in new technology.
• However, since the innovation cycle is much longer than most downturns in the business cycle the rate of innovation in the economy is not overly affected, new discoveries continue to be made.
• This means that, when demand starts to recover, surviving companies have the option to buy into the latest technology.
• Those that do so soonest are likely to be the most competitive and hence best able to increase productivity.
• For a time, companies can increase production by investing in new technologies, and thus delay re-hiring people.

The question is whether this pattern is set to recur when the world begins to emerge from the current recession.