LONDON — Sir Vince Cable says that technology is doing more to destroy jobs than global trade.
Globalisation has been criticised by politicians around the world, most notably US President Donald Trump. During his campaign, Trump blamed China and trade deals like NAFTA with Mexico for destroying American industrial jobs. He has vowed to bring jobs back to America but cutting down on international trade.
However, former British business secretary Sir Vince told Business Insider: “Most of the job losses have actually been due to technological pressures rather than trade.”
An economist before he became a Liberal Democrat MP, Sir Vince said: “I did some detailed work on some industries that had declined under pressure from imports. What you discovered was that even if imports were completely banned, all of the labour intensive processes were being replaced in any event by new technologies.
“Dundee jute [a fibre used for sacks and twine] was a good example. The same was true in the textile weaving and spinning [industries]. Steel — you require a tiny fraction of the number of people to work in a steel blast furnace than you did a generation ago.”
Sir Vince, who was in the cabinet from 2010 to 2015, added that the number of people whose jobs are displaced by import competition is “relatively small” and “widely exaggerated.”
The World Economic Forum (WEF) believes the globe could be on the precipice of a huge shift in the labour market as part of what it calls the “Fourth Industrial Revolution.” WEF predicts that automation and robotics could destroy 5 million net jobs by 2020 by making 7 million redundant and creating just 2 million jobs.
However, Sir Vince said he thought this prediction was overblown. He said: “I think that’s very questionable. We’ve had this debate about computers over the last quarter century. There were people writing articles saying computers are a disaster, they’re going to displace all the labour force, there’ll be no new jobs created. Actually, that’s nonsense. There are new jobs we couldn’t even have conceived of.”
He added: “New stuff is coming along all the time as some is being destroyed. Obviously one shouldn’t be blasé about that. The people who are caught in the middle can’t change because they’re middle-aged, didn’t get a good education, haven’t got adaptive skills — those people are hurt and we do have a moral and social obligation to help those people.”
In the same interview with Business Insider, Sir Vince warned that Trump’s anti-trade stance means the entire global trading system is under threat and warned that there are parallels between modern day and the protectionist 1930s.
Sir Vince was speaking to BI in his capacity as a new strategic advisor to the World Trade Board, a private sector body founded by financial software company Misys to promote global trade.