Demographic Processes, Technological Change

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2 Ulrich Blum and Josef Schmid (Eds.) Demographic Processes, Occupation and Technological Change Symposium held at the University of Bamberg from 17th to 18th November 1989 With 43 Figures Physica-Verlag Heidelberg

3 Professor Dr. Ulrich Blum Professor Dr. Josef Schmid University of Bamberg B.P.1549 D-8600 Bamberg ISBN ISBN (ebook) DOI / This work is subject to copyright. All rights are reserved, whether the whole or part ofthe material is concerned, specifically the rights of translation, reprinting, reuse of illustration, recitation, broadcasting, reproduction on microfilms or in other ways, and storage in data banks. Duplication ofthis publication or parts thereof is only permitted under the provisions of the German Copyright Law of September9, 1965, in its version ofjune 24, 1985, and a copyright fee must always be paid. Violations fall under the prosecution act of the German Copyright Law. Physica-Verlag Heidelberg 1991 Softcover reprint of the hardcover 1 st edition 1991 The use of registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use

4 TABLE OF CONTENTS Introduction U. Blum, J. Schmid Opening Address P.M. Schmidhuber "The Great Divide"; On Demographic Trends in the EEC D.J. van de Kaa Foreigners in the Countries of the European Community Recent Developments and Future Trends U. Mammey European Employment: Changes in Structure and Quality R.M. Lindley Demographic Development and the Labour Market - German and European Perspectives F. Buttler Population Development in Greece According to new Data on Fertility G. N. TziaJetas Technological Change in Manufacturing: Responses of Personnel Management in a Spatial Perspective S. Wagenaar, E. Wever New Concepts of Measuring Technological Change K. Koschatzky Addresses VII XI

5 INTRODUCfION This conference was dedicated to the description, analysis and evaluation of demographic developments, especially to the long-term reduction in population size and the concomitant ageing of the labour force stemming from birth rates below the generational replacement level, in the countries of the European Community. Today, it is already predictable that these developments are bound to have repercussions on occupations and technological changes, although the recent developments in the East have partly postponed, partly reinforced these trends. The drastic changes resulting from an ageing population have already been widely discussed with respect to the social security system, the maintaining of infrastructure, health services and the educational system, however, the direct and indirect effects on technological change and the resulting efforts to preserve one's economic position in the international competition have hardly been mentioned, thus far. In this context the Bamberg Symposium focussed on topics such as the question to what extent innovations depend on the social environment or the regional economic position, and how to adequately measure technological performance. Prof. van de Kaa showed that there is a uniform tendency in the reduction of birth rates in Western and Northern Europe which is strongest in the Federal Republic of Germany and Italy, and leads to a reduction and ageing of these populations. Possible future development paths include the disengagement of individuals from family life, new competition from friendship networks, combinations of roles as the form and the rhythm of work changes due to technological change; tensions stemming from the necessity of adaption processes and different ways of burden sharing. Even Greece can be regarded as an accelerated model of the trend described above. According to Prof. Dr. Tziafetas, Greece gradually falls in line with the other member states in respect to a rapid decline in fertility and a likely doubling of the share of old people, thus losing its traditional role as an emigration country. Dr. Mammey stressed that migration is subject to the concentration of new technologies. Although companies are in most cases more mobile than labour,

6 VIII immigration into the European Community from the outside must be assumed, whereas no considerable migration within the countries of the European Community will occur in the coming decade. Prof. Dr. Buttler demonstrated that the employment potential in Germany will fall in the Nineties; unification or immigration from Eastern countries will only postpone this. A policy to slow down the reduction of the employment potential will show only limited effects. The demographic wave that presently favours the labour market will slow down and fade totally in the Nineties; the mobilization of women for the labour market is a real opportunity because of their low participation rate in West Germany. However, an increase in female employment can already be seen, today. The last option, after having exhausted these possibilities, will be a technological and economic offensive in order to compensate for the declining and ageing employment potential, provided Europe, and especially the Federal Republic of Germany, want to maintain their social standards. Prof. Dr. Lindley discussed the demand side of the future technological-industrial Europe. Today, we already find a recession in the demand for low-qualified labour in the industrial sector paralleled by a simultaneous rise in the demand for higher academic qualifications. The demand for labour will especially increase in the tertiary sector, with a specific stress on production-oriented applications. Even though the government holds an important position in tertiary activities, for instance in health services, and has contributed to an increase in employment, it can be reasonably assumed that it will - from a total perspective - hinder the development of the tertiarization of the society. Because of the interrelationship between employment, work contents and qualification, the problem of overqualification at the lower end of the employment spectrum exists especially for women. The increasing necessity to higher qualify the labour force causes pressure to externalize the costs; i.e., a possible rising vote of the public sector. Prof. Wever and Dr. Wagenaar emphasized that in the short run the ability of an economy to innovate is more closely related to human capital than to accessible technologies. This links technological changes in an indirect way to the demographic component, as the transition from the educational sector to the employment sector will continuously slow down in volume, starting at the end of the Nineties. The integration of "blue- and white-collar" labour and the utilization of more than just one qualification (anti-taylorism) will liberate considerable productivity reserves, and eventually overcompensate existing economies of scale. If in the development of enterprises other trends are accounted for, especially the decentralization of headquarters, the reduction

7 IX in company slack, the sale of those divisions that are not directly related to the production of the very good and single sourcing versus global sourcing, a completely new spatial pattern for firm settlements may evolve. In the long run, differences among functions held by enterprises located in the center and those held by firms in the periphery will decrease. Attractive possibilities for new industrial locations, the acquisition of enterprises and the development of new firm organizations in the European Community will emerge. The distribution of the work force and its qualifications will have an increasing impact on those decisions in the future. Problems related to the operationalization of the technological position of a country in respect to other countries were discussed by Dr. Koschatzky. From an analytical view, the relationship between demographic processes, the employment system and technological changes and innovations necessitates the definition and operationalization of the latter terms. However, the term innovation is often used in an ambiguous way. Innovations are not necessarily the result of an advanced techonolgical position of a country. Europe is an excellent example for having a brilliant technological position which did not lead to economic success. In this sense, the analysis of markets, especially the study of foreign trade data concerning technological intensive products, and the definition of the technological profile of a country, both shown in this paper, may partly solve the problem. An unavoidable shortage in the work force is foreseeable. The rising potential of unskilled and low-qualified labour will ultimately give rise to a more costly formation of human capital. There are considerable doubts whether problems in production and employment can solely be overcome by migration processes. The increasing demand for higher qualified ("white- collar") employees will encourage non-european immigration into highly-qualified positions or into the tertiary sector. Within the EEC countries, migration movements of selected segments of the population are likely. The ability to compensate for the ageing process and the decline in the work force by increasing labour participation is limited. The effect is twofold: on one hand, the transition of technologies from the educational system to enterprises and the public sector will become apparent. On the other hand - as a consequence - human capital will age and require additional investment to upgrade the eductaional system. Technological leadership is not a guarantee for economic excellence, in terms of the ability to innovate. The necessary societal environment may also be threatened by ageing processes.

8 x As de~ographic processes and employment on one side and the economic and technological future on the other side are becoming increasingly interwoven, this conference in Bamberg had a pioneering character. We therefore thank the European Communities which sponsored this endeavour. We are indebted to Dipl.-Wirtschaftsing. Jan Siegmund and Ulrike Schafer, MBA, who carefully prepared this volume. Thankyou to all participants who have enriched our kownledge on this topic. Bamberg, July 1990 Ulrich c.h. Blum Josef Schmid

9 OPENING ADDRESS Peter M. Schmidhuber, Member of the Commission of the European Community Ladies and Gentleman, In the course of the next day and half the papers which you will hear and the discussions which you will have will touch upon some of the major determinants of the economic and social fabric of Europe. The strength of the link between demographic trend and economic performance was perhaps most baldly stated by the British Prime Minister Sir Winston Churchill, when he commented that, "a nation can find no better investment than putting milk into babies". Without encroaching too far upon the territory to be covered by the impressive list of speakers, I should nonetheless like to offer by way of introduction some personal reflections. Predictions of the United Nations suggest that in the course of the forty years from 1986 to 2025 the population of the present twelve member states of the European Community will decrease slightly from 324 million to 318 million. Over the same period the percentage of the population over 55 years old will increase from 13,4 % to 20,3 %. This ageing of the Community's population will profoundly influence the economic challenges with which we are confronted. It is clear that, ceteris paribus, it will result in a corresponding decrease in the percentage of the population which is economically active. The.latter reduced percentage will have a consequently greater burden to carry in the form of pensions, health costs etc. Furthermore, this burden would become yet greater should there be an increase in the birth rate in Europe, thus adding further to the economically dependent part of the population. In stark contrast to this the United Nations figures for the population of the world as a whole over the period 1985 to 2025 show an increase from 4.5 billion to 8.2 billion. Underlying these figures are dramatically high rates of population growth in the less developed countries and in the newly industrialized countries. These trends will lead to a completely different set of economic challenges, in particular to problems of unemployment and of training. Such trends on their own may be expected to lead to a widening of the gap in income per capita between the developed world and the less developed world.

10 Technological progress can contribute to the widening of this gap by reducing the general labour constraint to further economic development in the industrialized world. However, this does not rule out the possibility of specific shortages resulting from the requirements for ever more skilled labour to work with new technologies. The future shape of the world economy will be decisively influenced by the succes of the industrialized world in achieving higher productivity through the development of new technologies compared with the success of the developing world in achieving economic growth by the adoption of existing technologies. It is clear that at both Community and world level the resolution of the problems resulting from demographic trends and technical changes will be one of the major challenges of the 21st century. I therefore wish the present symposium, dealing as it does with such important themes, every success. XII