As the 21st century has become an age of technological innovations, automation and robotics, an acute problem of job losses to technology has become actively discussed topic by governments, companies and ordinary people around the world. The trend has been prevalent in the manufacturing industry where factories of major market players have been replacing people with machinery, but it has been rolling over to retail, technology sector and, every other possible industry. There is no job segment in today’s market, where humans cannot be replaced by technological devices. A recent study done by McKinsey Global Institute concludes that up to 800 million jobs can be lost to automation by the year 2030.
Take, General Motors, as an example. It now barely employs a third of the 600,000 workers it had in the 1970s. Yet it produces more cars and trucks than ever before. In the same fashion, retail companies are undergoing a real apocalypse as more and more brick and mortar stores go bankrupt or move all of their operations online due to unbeatable competition from mega companies like Walmart “on the ground” and giant companies like Amazon “in cyberspace”. Examples in other industries abound too.
Power tends to corrupt and absolute power corrupts absolutely by John Acton.
On the other hand, as jobs are being lost big companies are getting even bigger, and small ones tend to get smaller, or even completely fall into the abyss. Apparently, by utilizing technology hegemonic corporations get even stronger, richer, gain much bigger market share, some even reach the status of “too big to fail”. Their growth is expressed in productivity, amount of resources, acquisition of new businesses and technologies and undoubtedly, reduction of the human workforce by replacing it with machinery, robots, hardware, and software.
Most fail to see that job loss is not only related to technology replacing humans, but also technology in the hands of these huge companies that are run under the centralized model. Banks are probably the best examples of what centralization effects are. 30 years ago, in 1984 there were 14 400 commercial banks in the USA; however, today there are only 4 982 banks left. Such decline of individual banks can be explained by centralization that brings more internal regulations and centralized processes, making it harder for banks to serve small, local companies. They similarly offer a lot of their services online and regularly reduce human workforce by closing local customer service units around the world. The cause of that is the implementation of new technologies and managing the entire lending processes from start to finish all by themselves.
It is obvious that any business, especially lending one requires trust, understanding of your client and speed to ensure that vitally important funds reach businesses in need, in due time. However, when one single party oversees the whole financing process and tries to meet the needs of diverse global counterparties, businesses and individual borrowers, what happens when that single party (bank) goes out of business? Everybody loses their money! We all remember what happened when Lehman Brothers went under water. Consequences were devastating for both those parties, which were directly involved with the bank (those that were invested in it, had bank accounts etc.), and those who were indirectly involved (participants of financial markets, governments, smaller banks) as markets nosedived and credit crunch appeared when the news hit the market.
There definitely must be a better way of operating in the market, reducing risk and instead of cutting jobs by adopting advanced technology to create them with the help of it. How is that possible? By means of decentralization and reliance on blockchain technology. A global company Debitum Network, that finances small and medium businesses is a good example of this. Instead of trying to establish itself in over 150 countries worldwide, it is creating a global ecosystem where it will connect investors, borrowers and various counterparties providing services in a lending process. Lots of local businesses and individuals (professionals) can onboard a single platform, offer their services, and, as a result, plenty of jobs will be created.
Debitum Network has a mission to fill the credit gap for small and medium-sized businesses ($2 trillion) by connecting them with global investors on a blockchain platform. Third parties will provide a quality service that is necessary for the financing process: risk assessment, insurance, and debt collection. To make the whole ecosystem truly decentralized, global, and self-sustainable, service providers will be organized in ‘communities’. Thus, available credit loans, independent communities, as well as independent and institutional lenders create huge potential for job creation in both short and long-term. Communities are the key to where jobs are created.
As every job ends with Smart Trust Arbitrage Contract creation, where each party that participates in the process gets evaluated by earning or losing trust points, everyone in the process will be motivated to do the most qualitative work possible.
This becomes reality just because the process of lending is not a locked one as in the case with most banks, but an open one, where communities function independently and efficiently each performing a specific task in the process of financing. This is a perfect example, how a company using new technology (blockchain) under a decentralized model does not cut jobs but creates them. Giant corporations that care a lot about their image might learn something from the example and think more how they could contribute to job creation and the inclusion of local communities in the process, perhaps by changing the model how they run their businesses.