The economic literature has provided abundant evidence on how firm innovation, digitalization, and automation affect employment dynamics, yielding different and sometimes controversial conclusions. Technological innovation impacts individuals, occupations, industries, and regions in varying ways. Despite this complexity, the public often holds negative views about its impact on jobs. Therefore, it is crucial to examine how technological innovations affect job security for those who experience them directly.
Researchers from the University of Trento, Italy, investigated the relationship between technological innovation and the perceived job insecurity of “surviving” workers—those who remain employed after such changes. Their study shows that when new technologies are introduced, workers’ perceived job insecurity decreases. Two key observations emerged:
First, this decrease in job insecurity applies across different types of innovations. Surviving workers see technological innovation as a sign that the firm is healthy and committed to maintaining production and employment levels. The researchers term this the “reassuring effect,” which holds true for most types of innovation.
Second, the reassuring effect does not significantly vary based on individual and occupational characteristics. While occupation-specific factors affect job insecurity levels, only the worker’s level of education significantly moderates this effect.
These findings have important implications for technological development policies.
Job insecurity
Job insecurity has a cognitive component, which involves assessing the likelihood of losing one’s job within a given period, independent of the concerns this loss may cause. The emotional reaction to potential job loss, such as fear of not finding new work or maintaining income, is the affective component.
Introducing technological innovations is linked to a lower and declining probability of workers reporting high job insecurity. This applies to both cognitive and affective job insecurity. Workers feeling totally secure is nearly 20 percent higher for both types of insecurity; the probability of feeling totally insecure is almost 40 percent lower for cognitive and 20 percent lower for affective insecurity.
Firms can innovate in processes or products. When both types of innovation are introduced, the likelihood of workers reporting high job insecurity is cut by half, a more significant reduction than when only one type of innovation is implemented.
Personal factors
The relationship between technological innovations and job insecurity is influenced by worker and job characteristics. Educated workers experience a smaller reduction in cognitive job insecurity following technological innovations. They likely understand the uncertainties of innovation better but are not worried about finding new jobs if needed.
The reassuring effect of a company’s tendency to innovate shapes the expectations of surviving workers. This may be partly due to the time lag between introducing the innovation and conducting the survey. If workers change roles within the firm post-innovation, their new roles at survey time may not reflect their initial exposure to the innovation.
Changes in job tasks are easier than changes in occupations within a firm, which can take longer. Another explanation is that neither the degree of routineness nor exposure to robotization accurately captures the full range of innovations covered in the survey.
Sparking fears
Historically, new technologies, from the steam engine to digitalization, have sparked fears of job losses and increased job insecurity. However, the study suggests that workers directly experiencing technological innovation at their workplace find the information reassuring.
The general public should be aware of this positive perspective from surviving workers. A proactive approach to adapting to technological change is essential. The study demonstrates that the reasons behind and methods of introducing innovations matter.
Employers and trade unions should address technology-related issues with comprehensive information. Clear industrial plans can reassure workers that technological innovations aim to strengthen, not reduce, the firm’s workforce.
While investing in technology-related training and skill improvement is crucial, authorities should also promote a balanced narrative. This approach can enhance the quality of political debate and positively impact industrial relations.
