Sunday, October 08, 2017

"Digitalization" and the neoliberal gospel

The word "digitalization" - as distinct to "digitization" or "digitizing" - is a word that I noticed playing a role I had never remarked before in the German and Austrian parliamentary elections this year.

The current entry for Digitization in Wikipedia reads, "Digitization, less commonly digitalization, is the process of converting information into a digital (i.e. computer-readable) format, in which the information is organized into bits." This meaning is the one with which I've been previously familiar, converting analog information to digital form.

But the usage of "digitalization" that I've recently noticed has more of the meaning of the economic, social and political effects of digital technology, a much broader usage than that of converting analog information into digital. Ditigilize" also is used for administering the drug digitalis.

Manuel Arias Maldonado in The internet against democracy/Internet contra la democracia Eurozine 05.10.2017 uses the term to talk about the increased use of digital media and its effects on politics, in particular. He uses it to discuss the now-popular concern of "fake news."

If this following article is a measure, "digitalization" has entered the vocabulary of ConsultantSpeak, 7 prescriptions for a digital Germany Politico EU (n/d; accessed 10/08/2017)

“One part of the solution is to be much more aggressive in making Germany more attractive for people from the outside who are young and bring knowledge in the digital space,” said Andreas Behrendt, a partner at consultancy McKinsey & Co. specialized in industrial digitalization. ...

German universities have been slow to adapt to the changing digital landscape in engineering and need to catch up by offering more majors directly linked to Industrie 4.0. Too many students are studying subjects that won’t prepare them for digitalization. “Universities shouldn’t just administer digitalization, they need to also shape it,” Cornelia Quennet-Thielen, Germany’s deputy education minister, said recently. [my emphasis]
And this business case at the Harvard Business School also uses the term, Digitalization at Siemens Feb 2017: "The increasing impact of digital technologies on all of its business units had prompted CEO Joe Kaeser and his team to put digitalization at the core of the new corporate strategy, alongside electrification and automation." (my emphasis)

Matthew Karnitschnig writes in 5 questions for Germany’s digital future Politico EU 09/11/217:

Europe’s largest economy has been firing on all cylinders in recent years, but the coming digital revolution will test the resilience of its industrial core like never before.

To thrive in this new world (or maybe even to simply survive), industrial companies will have to fundamentally change the way they approach their business, from the drawing board to the factory floor to the repair shop. For Germany, where industry accounts for nearly one-third of the economy, the stakes in successfully managing digitalization are acute. [my emphasis]
Karnigschnig's article also hints at "digitalization" becoming yet another neoliberal buzzword for damaging economic trends that the One Percent would prefer the public to regard as something like a natural law at work, the way "globalization" has been used for decades:

Digital advances — from artificial intelligence to robotics to 3D printing — will transform manufacturing. And yet, in a recent ranking measuring the digital preparedness of 35 industrialized countries, Germany finished 17th, lagging behind even France. The country’s blue-chip industrial companies have been quick to embrace digitalization, but its vaunted Mittelstand — the small- and medium-sized businesses that employ most Germans and account for more than half of GDP — have been slow to embrace the digital revolution. ...

Digitalization promises to turn the nature of work as we know it on its head, demanding more flexibility from both workers and their employers. The rules governing employment will need to adapt. [my emphasis]
In the neoliberal vocabulary, the "need to adapt" rules on employment to provide "more flexibility from both workers and their employers" means weakening unions and labor laws.

Watch for "digitalization" to pop up in discussions of "the changing economy" and the need for "retraining" to address the "skills mismatch."

This kind of argument has been part of the neoliberal economic ideological pitch for a while ( Lila Shapiro, ‘Skills Mismatch’ Causing High Unemployment? Not Quite Huffpost 02/21/2012):

But some labor and manufacturing experts say the real story is far more complex than a “skills mismatch.” And some say that the basic premise — 600,000 unfilled jobs — paints a deeply misleading picture.

“I do not find any credible evidence of anything approaching a shortage in manufacturing workers anywhere in the country,” said Andrew Sum, a professor of economics at Northeastern University who specializes in education and the labor market. ...

Since the beginning of the century, manufacturing wages for production workers have barely increased, Sum said. And in the last two years, as employers have said they’ve been having difficulty filling spots, wages have declined slightly.

“If there was a big shortage of workers, than we should find wages rising. But this just isn’t the case,” Sum said. “That doesn’t mean that specific companies won’t ever have trouble finding a machinist, but when you add it all up, it doesn’t amount to very much.”

Some academics and labor advocates say a problem with the skills mismatch argument is that it shifts the blame for the jobs crisis onto workers who lack skills, and away from cash-rich companies declining to hire. The supposed mismatch also relaxes debate on the need for fiscal stimulus policies to increase payrolls.
"Digitalization" already seems to be becoming another buzzword in that vocabulary.

Austria's social-democratic Chancellor Christian Kern gives a version of it in this interview, An interview with Christian Kern The Economist 06/02/2017:

More generally, what needs to happen to the “Austrian model” to make it work in the future?

I think it is important to proceed with it. Of course the challenge is to modernise and adapt it, and that will take some time. But particularly given the coming digitalisation it is important to seek a social balance because this will be a time of great social fragmentation between winners and losers. We see it as our job to make sure there is a fair distribution of prosperity. Part of the Austrian model has always been making sure that no-one is left behind. Scandinavia aside, we are one of the world’s more egalitarian countries and we should preserve that business model. [my emphasis in bold]

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