Functional investigation concerning a sustainable social economic evolution of the globalized industrial society

Annual Reviews in Control

PERGAMON

Annual Reviews in Control 24 (2000) 1-8 www.elsevier.con~/locate/arcontrol

Functional Investigation concerning a Sustainable Social Economic Evolution of the globalized Industrial Society E. Welfonder Department for Power Generation and Automatic Control, University of Stuttgart Pfaffenwaldring 9, D-70550 Stuttgart, Federal Republic of Germany Tel. +49 711 685-6214, Fax +49 711 685-6590

Abstract: For the investigation of the social economic and ecological effects concerning a sustainable evolution of the globalized industrial society a flexible supranational model has been developed. As pointed out the model is hierarchically structured for being able to consider special national problems as detailed as necessary on the lower model levels and general supranational problems with correspondingly higher aggregation on the upper levels. Due to the functional structure of the model not only simulation studies are possible but also analytical investigations. This will be shown by others by the influence of automation on reduced employment. Keywords: increase of automation, globalization, employment, sustainable evolution.

1. INTRODUCTION For being able to master the discrepancy between the economical requirements and the ecological admissibilities in the medium and long term, an overall socio-political responsibility is generally required. Such a socio-political responsibility must finally cause an overall reducing influence on the up to now increasing eigen-dynamic of the scientifictechnical progress, of the continuous rise of production and consumption as well as especially of increasing environmental problems /1-10/. Thereby also the social and economical requirements, caused by required constraining influences as well as by the ongoing world-wide growth of population, have to be taken into aceotmt/11, 12/. Such an interdisciplinary consideration and treatment is obviously necessary, as the increase of information, communication and automation technology leads to an ever accelerating velocity of development, production, use of products and their replacement by new products /13-15/. Therein the technological progress itself causes harder and harder competition between the industrial enterprises as well as between the various industrial nations/16/, with the result that each enterprise is governed by the necessity appearing inevitable to have to produce

larger and larger quantities of products more efficiently and less expensive, and this often combined with requirements for continually improving quality. This growth of production and consumption leads on the one hand to an ever increasing aggravation of ecological problems, that means an increasing consumption of ressources and energy, as well as an increase in environmental pollution by exhaust gases, sewage and waste/17/. On the other hand the increasing degree of processand office automation leads to reduced employment /18/which is - at least to a certain extent - structure based and therefore hardly to avoid. Up to now these trends have mostly been typical for the industrialized nations, s. Fig. la. With the arising globalization - mainly by the exponental increase of information and communication teelmology - the trends pointed out above will probably become valid very quickly for the emerging and developing countries as well, s. Fig. lb. Therein due to high wages in the industrialized nations standard work is already shifted today to the emerging countries, leading to a further structurebased reduction of employment in the industrialized nations.

1367-5788/00/$20 © 2000 Published by Elsevier Science Ltd. All rights reserved. Pll: S 1367-5788(00)00009-2

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a) Industrial nations

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Fig. I: Signal flow diagram concerning the influence of scientific-technical progress and globalization on P(t!, consumption, environmental burdens and population P_opu,ot~on Besides these technical/economic dependencies described, there is some hope that with the improvement of living standard in the emerging and developing countries the furtheron continuous increase of population will come down - as already happened in the industrialized nations - at least to a certain extent/19/. Due to these reasons future-oriented actions are urgently required by individuals, by public opinion and in particular by the politicians. However such activities are only possible, if medium- and long-term aims are worked out and presented in an understandable form to the decision-makers as well as to the population in the different regions of life. Though the problems concerning the rapid scientific/technological progress as well as the resulting consequences have been discussed and investigated for many years by numerous experts of different disciplines, the results have been described mainly verbally in general form. Besides those mostly verbal considerations experts have developed special economical, sociological and ecological simulation models. Thus, numerous subject-specific models, e.g. for Economy /20/, Energy /21/, Environment and Climate /17/ have been developed for simulation studies in special fields. Additionally developed global models concerning the limits of growth/I-3/and those based on them/7, I I / d o focus on the population growth expected as well as on the continually increasing industrial

a¢t~ Environmental Burdens

production, wherein with the help of scenarios the continuing increase in pollution, the beginning depletion of ressources, and the resulting feed-back on the production are investigated. Also countermeasures have already been proposed, so concretely i.e. in/22/and more generally up to now in/19/. Factors not sufficiently considered up to now are the reasons of the continuing industrial growth, increasing with a so far unlimited eigen-dynamic. Moreover, in the realized scenarios mainly the input/output behaviour of the derived models has been regarded (black box consideration), instead of a coherent, function-oriented consideration which makes it possible to determine the relevant functional dependences and existing feed-back influences also analytically (white box consideration)/25/. For an investigation of the evolution of the industrial society under the consideration of ingenious limitations, an entire, all sides regarding method is necessary, permitting the description and analysis of the various economical, ecological and social dependences as well as their various interconnections functionally, and this at several hierarchically structured levels with different degrees of aggregation. In the following a corresponding method is presented and applied J ) ~) Besides this the proposals of Radermacher et.al, concerning possibilities for a sustainable further ¢volution by means of the information and communication technology - newly formulated by the Chana "Challenges 2025" (June 1998) - are of special interest/24/.

E. WelJbnder /Ammal Reviews in C(.:;rol 24 (2000) l 8

2. MODEL DEVELOPING

3

evaluation of the functional relations. By this way structure-instabilities as well as unfavourable coupling influences can be analysed directly. This feasibility of analytical investigations shall be explained by means of the following examples.

For solving the complex world-wide problems as pointed out a flexible supranational model has been created, which is modularly built up, allowing a hierarchical, function-oriented consideration of the local and global economical and social interdependences. Therein constraints seeming necessary to solve the scientific-technical economic social political problems can be introduced with varying degree of sharpness.

Example 1: Influence of rates on poorness and wealth By the positive feed-back - to be seen at the bottom of Fig. 3 - a structural instability can be recognized, representing the well known social effect that poor households/nations will become poorer and poorer and rich ones will get richer and richer! For mastering this instable effect overlayed regulations by the national governments in form of corresponding negative feed-backs like subsidies on the one hand and income progressive taxis on the other hand are generally indispensable. a)

Figure 2 shows the model structure of a national economy on the highest level of aggregation with its internal and external couplings. The model structure outlined in the left half is mainly based on the following basic sectors - "Enterprises" - "Banks and Insurance Companies" - "Public Authority and Government" and "Households"• The individual structure of these single sectors is illustrated in Fig. 3 at the example of the functional model "Household".

b)

Example 2: Influence of mechanization and

automation on employment Fig. 4a illustrates by a simplified block diagram the work flow of production for different kinds of products in functional interaction with the f'mancial balancing and the resulting investments. As to be seen the annual income of normally managed companies will exceed the annual expenditure to such a degree that sufficient

3. FEASIBILITY OF ANALYTICAL INVESTIGATIONS The derived part models coupled with each other represent by others the basis for an analytical Mo~n Sectors A,

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Fig. 3 Sector "Households" investment capital is available for improvements in production and further automation, and this besides replacements of old installations to be shnt-down and secondary investments such as environmental measures. The resulting increase of mechanization/automation does have itsself a positive feed-back on the production, s. lower part of Fig. 4a. Then - assuming a furtheron constant number of employees - the degree of mechanization/automation 71 does lead to a proportional increase in the production capacity, temp. extreme case ( ~ in Fig. 4b and c. However, as the market can only absorb products to a limited degree and costs have to be saved when ever possible due to competition necessities, a reduction of the employees working in the production process is unavoidable with increasing automation. But for keeping the production capacity fur*heron constant, a radical reduction of staff - reciprocally to the degree of mechanization/automation - would be required, comp. extreme case O in Fig. 4b and c. In reality the production and employment behaviour will be between these two extreme cases. So for instance the staff may be reduced in medium term with 1/V'~, and due to that the production capacity will already increase with v ~ , as illustrated by case Q in Fig. 4b and c. Such a staff reduction - already predicted years ago on the basis of relevant analytical considerations

/18/- does not happen only in the production industry, but also in the utility and serving areas. So for example in the field of energy generation smaller heating power stations are already run f u l l y automatically and big power stations are governed and supervised from cockpit control centers only by very few persons/23/. For regarding also preproduction influences, the complete block diagram of the part model "Enterprises" does also contain the groups of employees which do not work directly in the production process, but in more commercial or technical areas. The latter group of mostly technicians and engineers, being active for instance in the development, planning, projecting, assembly and maintenance area will certainly increase in the future, at least in percentage to the whole staff. But in these areas of non-manual work computer-aided measures for rationalization and automation are increasingly used, too, as already to be seen by key words like "office automation", "library data bases" as well as "computer aided design in construction-, projecting- and diagnosis-systems". Therefore the absolute number of employees working in nonmanual areas will not rise considerably. For mastering such positive feed-backs of the degree of mechanization and automation countermeasures enacted by law may be useful, like:

E. Welfonder / Annual Reviews in Control 24 (2000) 1-8

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on the investment side by furthe~ environmental regulations, which necessitate additional secondary investments - not directly related to production, on the user side by higher taxes or charges for product disposal (e.g. old refrigerators, motor cars or oil platforms), and this for reducing consumption and environmental stress, as well as on the production side by burding the cost for less employment - a t least partly- to companies, running with highly automated production.

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However, due to the high sensitivety of the already globalized world market, an isolated "slow-down" on national level will - if at all - only be possible within narrow boundaries. Then for the production companies just a further increase of mechanization and automation is - besides trying to be ahead in new technologies - the nearly only measure to survive in the increasing international fight of competition/25/, i.e. a trend which will last at least as long as the wages and incomes will remain on as high levels in the industrialized countries. Due to these reasons the problems described must not be considered isolated, i.e. only concerning one nation or one world region, but have to be handled glob~lly - as generally shown in Fig. 5.

6

E. Welfonder/Annual Reviews in Control 24 (2000) 1-8

well as world-wide environmental burdens and decrease of non-renewable ressources can be handled and answered in a sufficient way.

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4. FEASIBILITY OF AIMED SOLUTION STUDIES For the performance of aimed solution studies concerning global question areas, the created supranational model is hierarchically structured with different levels of aggregation/detaillness from top to bottom, as shown by Fig. 6. ~, Therein the main sectors considered within national areas can be aggregated on the upper level to corresponding sectors within supranational areas. Respectively the main sectors can be subdivided on the lower levels horizontally into more specified sectors like: "Banks", "Health/Annuity Insurances" Underdovelopad notions and "Other Insurances" or "Industrial Enterprises", "Agricultural Fig. 5 Global consideration of the European Community in Enterprises" and "Service Enterprises", connection with other -socially and economically and vertically into part sectors like different - supranational areas "Poor Households", "Middle HouseThen only when regarding the couplings to the other holds" and "Rich Households" up to - "Production Areas" or even "Individual Production world regions question areas concerning Firms", international competition, the latter however only in the case of special - shifting of working places to nations having lower investigations, wherein the rest of production areas or wages and caused by this cheaper production as -

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E. Welfonder/AnnualReviewsin (_bntro124(2000) I-8

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/16/

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