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New technology and employment in Italian telecommunications
Technovation, 11:5 (1991) 303-314
New technology and employment Italian telecommunications Marco
in
Frey*
IEFE, Bocconi University,
via Sarfatti 25, 20136 Milano
(Italy)
Marco Vivarelli SPRU,
Sussex University,
Brighton
lU. K. !
Abstract
The paper deals with the employment consequences of technical change in the Italian telecommunications sector. After a short overview of the structure of the Italian telecommunications industry and its recent economic evolution, the impact of new electronic techniques on labour is studied from both a quantitative and a qualitative point of view. The authors underline the correlation between technological change in the ’80s and the sharp fall in TLC manufacturing employment. As far as basic and new services are concerned, employment shows a positive trend; nevertheless in these sub-sectors the impact of technology on skills is also striking. With regard to this, the authors present the results of their questionnaire analysis carried out in Italy and embracing ail the major firms within the sector. The general conclusions take into account the huge modifications in manpower requirements and stress the necessity of training, retraining and appropriate economic policies.
1.
Introduction
The employment consequences of technical change are often a topic for social and economic debate and are a recurring issue in the history of economic thought. However, economic theory does not provide a framework suitable for use in empirical, sectoral studies of the subject. The principal aims of this study are as follows. Firstly, the importance of technological * Corresponding
Technovation
unemployment-or ‘Ricardian unemployment’ as it is called by Sylos Labini in his most recent work [I]-will be underlined. This category is often neglected by economists who deal mainly with ‘Keynesian unemployment’ (i.e. that which is due to a deficiency in demand) and ‘classical unemployment’ (due to increased costs of labour). In spite of conventional wisdom, technological unemployment is indispensable in throwing light on the situation in some industrial sectors.
author.
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M. Frey and M. VivareJJi
Secondly, a sectoral case has been chosen with the aim of taking into account technological evolution in a specific context; otherwise technology remains exogenous, as in most economic studies. Indeed, some economic studies completely ignore technology as a separate issue, whilst others take into account only the aggregate trends in such a way as to neglect the specific features and impact of technological transformations. Last, but not least, interpretations of changes in the structure of telecommunications manpower and in the skill requirements will be put forward. This is an important issue which has often been neglected by economic theory. In fact-as clearly shown in the book by Cooper and Clark [a]-changes in skill requirements are crucial in terms of both the consequences on the work conditions and also with regard to the quantitative effects on employment. Indeed, shortage of skilled workers can present serious obstacles to reabsorbing redundant manpower. The structure of the Italian telecommunications sector will be briefly outlined in Section 2.1, and in following sections, economic and technological evolutions within the sector will be presented. Section 3 is the core of the work; in the first part the employment trends will be discussed. By comparing employment evolution with economic and technological trends it will be shown to be possible to identify technology as the main cause of employment collapse in the ’80s. Section 3.2 will be devoted to a discussion of our which questionnaire-based research has covered the main firms within the sector. The questionnaire analysis concerns employment trends and focuses on qualitative effects in order to show the vast impact of technical change on manpower structure. Eight questionnaires have been sent to the five main manufacturing firms and the three main service companies. These firms operate entirely within telecommunications sector boundaries and represent from 80 to 90% of total manpower employed in the sector. Data have been col304
lected on employment levels, specific skill mix and turnover and training activities. Time series show actual information since 1970 to 1988 and forecasted values for subsequent years.
2. Telecommunications general overview 2.1.
in Italy: a
The sector
As in other countries, the Italian telecommunications sector is characterized by a sharp distinction between industrial firms (manufacturing plants) and service firms devoted to managing the network. Production is characterized by the existence of a strong oligopoly with market shares divided on a geographical basis. Industrial activity can be classified into three components. (1) Switching equipment (electromechanical, electronic or digital exchanges) for voice, telex and data traffic, and its related software. Switching can be divided into two subsections, public and private (PABX, KTS, user systems). (2) Transmission equipment. This includes the related software and the transmission path subsector (for instance simple and coaxial cables, optical fibres, etc.). (3) User terminals, including telephone and video terminals installed at the user end. In manufacturing, five main firms can be singled out: Italtel, a big public company and leader in switching equipment; another Italian firm, Telettra (part of the FIAT group), a leader in the transmission subsector; and the subsidiaries of three multinational firmsSiemens, Face-Alcatel and Fatme-Ericsson. Turning the attention to the service sector, five principal players can be identified: (1) SIP (Italian Society for Telecommunications Service). This is the most important service firm, taking care of urban networks and Technovation
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some trunk connections. SIP provides all the services to the users: linking, repairs, etc. It is controlled by the state through its holding in IRI-STET; 80% of service employment can be found in this firm. (2) ASST (State Agency for Telecommunications Service). This is a state-owned firm devoted to trunk and international connections, recently absorbed by IRI-STET. (3) Italcable. This is a firm partially owned by the state dealing with intercontinental connections. (4) Telespazio, also controlled by the state (through IRI-STET) is devoted to satellite connections. (5) Minister0 delle Poste e Telecomunicazioni; a state ministry that has responsibility for coordinating and planning industrial policy for telecommunications. It directly manages the telegraph and telex services. Taking into account the structure described above, it can be seen that the Italian telecommunications system is still characterized by a public monopoly on the one hand and a productive oligopoly on the other. 2.2.
The economic
evolution
In recent history, distinguished:
three
phases
can
be
(1) a fast growth in sales, investment and trunk connections in the early ‘7Os, until 1974; (2) a sudden halt to this growth in the mid ’70s; (3) the ‘recovery’ of the ’80s. The first phase was sustained by high public demand to complete the trunk connection network. Extensive growth ceased in the mid ’70s for many reasons, including the general economic crisis, the reduction in government expenditure and increasing difficulties in export flow (the latter was caused not only by the international economic crisis. but also by the lack of a coherent ‘Italian model’ for telecommunications which could be easily exported Technovation
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[3].) The telecommunications crisis became apparent with the severe and worsening financial trouble in SIP, which was squeezed by increasing costs on the one hand and the jamming of the telephone charging system on the other. As a consequence of the crisis, SIP suddenly reduced its equipment procurements; therefore, its problems affected demand (from manufacturing firms) which decreased rapidly. An indicator of the fall in SIP investment is the number of the lines placed in service by the company (881000 in 1973, only 55 1000 in 1976 [4,5]). This recessive spiral involved a strong reduction in investment in the entire sector during 1974 and 1975. In addition, investment changed in nature from extensive to intensive, with capital substitution, innovation and labour-saving changes. In spite of the commencement of rationalization, the sector remained economically stagnant until the end of the ’70s. Only in the new decade an evident recovery did begin; examples of this recovery are the cases of SIP and Italtel. SIP was able to levy higher charges and established better relations with the State and the other service firms. In other words, SIP obtained more freedom in management and pricing policies thanks to a ‘deregulation’ of its relationships with the state and state-owned Italtel and ASST. Together with internal reorganization, this created conditions favourable to a sustained recovery, which is now complete. In Italtel different problems and different solutions have occurred: in this case a belated but thorough rationalization has been achieved, based on a reduction in labour costs.
2.3.
Technology
Until the ’70s telecommunications were characterized by relative ‘technological stability’. The established technical standards and the accumulated know-how permitted the use of standardized production methods and
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extensive investment, given the relative constancy of capital intensity (K/L ratio). Thus telecommunications linear were on a ‘technological trajectory’ and their future evolution was predictable [6,7]. The diffusion of the ‘microelectronic paradigm’ undermined this stability and threw the sector into a turmoil; the areas affected were as follows. (I) Switching. This is the subsector where the consequences of technical change were most striking. The transition from electromechanical to electronic technologies implied integration of different systems (for instance voice and data networks), cutting of unit costs and better performances in telecommunications services. The transition involved decisive and irreversible transformations in the production system [8]. If the weight of switching within the sector is taken into account, the huge employment consequences of technological transformations can readily be seen (see Section 3). (2) Transmission. In this subsector technological progress did not have as much impact as in switching. Technological change implied two fundamental phenomena: (a) the complete transition from an analogue to a digital network with the opportunity to establish the integrated services and data network (ISDN), (b) the transition from traditional transmission paths to optical fibres and satellites. In spite of the importance of these technological innovations, the impact on employment level was much less marked than in the case of switching. (3) New services and user systems. Microelectronics brought forth a host of new appliances: new communication devices such as fax and entirely new services, e.g. the ‘value added services’ (VAS). (4) Software, which has become crucial in every technological change described so far.
[6]. Complete renewal of the network petted by 2010.
3.
is ex-
Employment
3.1. Quantitative
effects of technical
change
Our questionnaire analysis distinguishes the manufacturing from the service subsector.
Manufacturing
The aggregate employment trends of the five main telecommunications firms are reported in Fig. 1. The trend partially reflects the economic evolution discussed in Section 2.2. In particular, rapid growth is obvious until the mid ’70s: then a sudden halt occurred. This deflection is attributable to economic factors; on the other hand, as far as the employment fall in the ’80s is concerned, technological change assumes a crucial role. The transition to electronic techniques-begun in the early ’80s-can be but forward as the main cause of the employment collapse. Indeed, the second half of the ’70s was characterized by stagnation
The most important change-from electromechanical to electronic techniques-did not become obvious until 1980, when the first electronic telephone exchanges were produced 306
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of public demand and therefore by employment stability; on the other hand, the ’80s showed a recovery in national and international demand but at the same time an acceleration in labour-saving technical progress occurred. This acceleration can explain the steep decrease in employment shown in Fig. 1: in seven years telecommunications manufacturing lost 20 000 employees. It is important to recognize two basic phenomena: (1) the transition to electronic switching involved a decrease of added value attributable to telecommunications and a striking decrease in manpower requirements, and (2) the switching subsector employed more than 50% of the sector’s manpower at the end of the ’70s. In this context, the adoption of electronic technologies did have a major effect on employment levels (similar evolutions had occurred in France and the USA in the mid ’70s). The employment evolution in Telettra confirms the technological nature of telecommunications unemployment. Our data show that the situation of Telettra has been very different from the aggregate trend and has been related to purely economic factors, namely the slowing of demand in the second half of the ’70s and the recession in the early ’80s. Telettra’s evolution shows an interesting indifference to the labour-saving technological changes of the ’80s. This may be due to the better export performance of the firm but especially to the fact that Telettra does not include switching in its principal activities. In other words, Telettra did not undergo the large transformation in production that affected the other firms such as Italtel. Fundamental production changes in methods determined the collapse of employment levels. In the light of the facts which emerged in the ‘8Os, the accelerated and extensive growth in the early ’70s appears excessive. During those years, employment growth occurred-with constant technologies-at a rate of 19% per year: six times greater than the national average. If we take into account the fact that electronic techniques were already well Technovation Volume 11 No 5
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known and affirmed in other countries, the short-sightedness of the policy that allowed such uncontrolled employment growth is obvious. In the ’70s there was little uncertainty about future substitution of electromechanical techniques for electronic ones. An appropriate industrial policy at this stage would have had to plan an intervention in order to control the employment trends and the adoption of new technologies. For instance, the increase in demand could have been used to justify the introduction of new electronic techniques or to attract international partners who were already familiar with the new technologies. Instead, nothing was planned and in the ’80s a sudden and violent rationalization became necessary.
Basic and new services
Service firms present much more positive employment trends (an increase of 20000 employees has occurred since 1970). More specifically, the spread of fax and other communications systems-although still very slow in Italy-has entailed an increase in employment in service companies which has more than compensated for job losses in the area of maintenance of traditional services. On the other hand, the commercial development of new equipment is one of the causes of the emergence of new skill requirements, the consequences of which are reported in Section 3.2. Change has consequences for both installation and maintenance. Concerning the former, smaller and more powerful exchanges and lower cable requirements imply a progressive decrease and simplification of the work involved in the installation of network lines. Maintenance should become simpler and less frequent, because of the greater quality of new equipment. Together with these threats to employment levels, the possibility of manpower enlargement should still be associated with the diffusion of new communication and value-added services.
M. Frey and M. Vivarelli
Actually, the positive employment effect of new communication services seems to have slowed down in recent years, whilst the potential of VAS has only recently become recognizable. At present, the companies operating in the field of databanks and other VAS employ about 1500 workers (half of whom are devoted to marketing functions). Hence the impact on the employment figure of the entire sector is still negligible. On the other hand, the development of more advanced countries such as France and the trends in demand predicted by SIP both suggest a lOolo annual increase in employment in VAS companies in the coming years. Thus, the VAS area-although marginal today-could be an important source of employment within the sector in the near future. In this complex scenario, the recent evolution of SIP shows the end of a period in which the service subsector was an ‘employment sponge’ for Italian telecommunications. In this context, it is worth noting the end of the agreement between SIP and Italtel which involved the transfer of 2000 employees from Italtel to SIP over five years (1982-86). More recently, SIP plans have explicitly forecast stability of internal employment over the coming years [5]; similar management intentions can be found in Italcable and a substantial manpower redundancy in ASST is observable, as well. On the whole, it is thought that service employment will remain constant (or will show a slight increase) in the coming years. Nevertheless, behind this apparent stability, the mix of functions and skills will continue to change extensively (see Section 3.2.2).
Small peripheral
firms
Italian telecommunications are characterized not only by the presence of big firms but also by a large number of small firms dependent on commissions from the larger ones. For the purpose of this analysis, these small firms have to 308
be considered in order to avoid a large distortion in the measure of employment consequences of technical change. In particular, if this subsection of telecommunications is not taken into account, unemployment caused by the technological transition in the ’80s would be underestimated. Indeed, a large flow of manpower from the peripheral firms to the large firms occurred in those years. Large firms reabsorbed a lot of production phasespreviously decentralized in small firms-with the purpose of safeguarding their internal employment levels. For example, Italtel reabsorbed 5000 employees in the period 1975-1980 191. If we take this phenomenon into account, the actual employment decrease was even more striking than that shown in Fig. 1 (in which only the employment patterns of the five main firms are computed, because of a lack of about the peripheral precise information firms). 3.2.
Qualitative
effects
of technical
change
This section comprises a commentary on the results of our questionnaire concerning the changes which have occurred in the manpower structure in both industry and services. The ‘victims’ of the quantitative reduction in employment levels described so far will be identified. 3.2. 1.
Manufacturing
firms
Qualifications
In the five major firms, similar trends show a marked decrease in the number of blue collar workers (Fig. 2). On the other hand, the percentage of white collar workers is increasing everywhere and in two firms it is already dominant. On the whole, the worker component decreases one per cent per annum (on average); the clerical component is stable in absolute Technovation
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-
R&D
---
Fig. 2. Qualifications 1992 (o/o).
in the
five
main
Workers
firms
1970-
Fig. 3.
Divisions
Production Installation
-
Trade
-
Others
in the five main firms 1970-1992 (o/o).
terms; management represents a low proportion in absolute terms but increases in percentage terms.
-
Divisions
.
Uniform trends concern the production divisions which decline over time and the R&D and trade divisions which increase in importance in all the firms (Fig. 3). The diminishing volume of production is linked with the fall in the number of blue collar workers. At the same time, the exception of Telettra is noticeable; again it is related to the fact that Telettra was not affected by the dramatic change in switching techniques.
--
Fig. 4. Instruction 1970-1992 (Vo).
degrees
in the
five
Graduates With Diploma Others
main
firms
Gender Education
degrees
The percentage of graduates and employees with a diploma is increasing everywhere, while the proportion of non-qualified workers (still over 70%) is decreasing (Fig. 4). Technovation
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In Fig. 5 a general fall in the female:male ratio can be observed, with the partial exception of Italtel where the public nature of the firm involved a policy of positive action in favour of women.
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A4 Frey and M. Vivarelli
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Face
-
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-
ltaltcl
-
Siemcns .
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:
:
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:
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Telettra
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Fig. 5.
Female employment
in the five main firms
1970-1992 (To).
A high degree of standardization of tasks and thus absence of training, with the exception of some short and simple courses of apprenticeship. Technical change and its consequent reorganization of labour took place in this context. The requirements for a generic labour force slowed down and a demand for a new type of labour developed. Turnover did not compensate for job losses, but was crucial in modifying the qualitative structure of employment which has been continuously balanced in favour of better qualified employees.
As emerges from the data, technical changes had considerable effects on demand for skilled labour. This impact was more appreciable in Southern Italy where plants had a large concentration of production phases carried out by lower qualified workers.
Some general comments
3.2.2.
It is now possible to identify those who suffered because of the rationalization of the ’80s. The victims of the employment cuts appear to be the less-qualified workers in the production divisions doing manual tasks and having low education degrees (tasks which were often allocated to female workers). The picture supports the previous analysis which dealt with the technological causes of the fall in manpower levels. Indeed, it is seen that the most striking change occurred in manufacturing of switching components: the most important section of the where less-qualified production division workers were employed. In order to understand more deeply the qualitative consequences of technological change, the situation inherited from the ’70s has to be borne in mind: l
A prevalence of young manpower, with a higher female component and a generally low level of qualification. This was the typical composition of a labour force employed in a mature and standardized production environment [7].
310
Service
firms
The substantial stability of employment levels in services firms has been reported above. Nevertheless, the uniform path in quantitative terms disguises large variations in the relative components within the service manpower. As in the industrial subsector, a trend towards higher qualifications is obvious; skilled workers are already dominant both in and qualification, to education respect although services started from a betterqualified initial composition of manpower, see Fig. 6 (reliable data are available only for SIP, which the main service firm employs more than 80% of service manpower). Furthermore, in this subsector, the movement towards increased levels of qualification is coupled with a decreasing percentage of women employed in the workplace. Some general comments
As far as service firms are concerned, the situation in the labour market seems less tight. Technovation
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At the same time, it is necessary to retrain managers in order to enable them to face the new environment and cope effectively with increased competition (let us remember, for example, the need for a market-oriented mentality to face the challenge of computer firms [lO,lll>. --
Workers
4.
Fig. 6.
Qualifications
in SIP 1970-1992.
However, in this subsector manpower needs extensive retraining both for installation and maintenance tasks. In fact, the installation of new services, terminals and user systems requires new skills in comparison with those needed for the traditional maintenance of telephone links. In Section 3.1 .B the evolution of new services and VAS has been briefly described. Here it suffices to say that their impact on skill requirements has a major point in common. This is the increasing importance of software in comparison with hardware. As a consequence, roles in maintenance shift from actual repairs to controlling and testing functions [8]. Indeed, SIP has tried to encourage internal training and requalification and has begun a process of ‘qualified’ turnover: in 1986 90% of new SIP employees had diplomas or were graduates [4,5]. Finally, indirect effects related to the new technological trajectory should be briefly outlined. Globalization and stronger competition involve continuous attention to cost-cutting and efficient allocation of resources within the firm. Therefore, requalification programmes may become necessary and sometimes problems of redundancy may arise. Technovation
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Conclusions
It is now possible to draw some tentative conclusions, in response to the questions posed in the Introduction. As far as the quantitative effects of technical change are concerned, the traditional concepts of Keynesian unemployment and classical unemployment are not by themselves adequate to describe the sectoral situation studied in this paper. In order to explain the crash in telecommunications employment which occurred in the ‘8Os, a third category of Ricardian unemployment has to be introduced. With this in mind, it is necessary to specify and date technical change: in other words, a variable which is generally considered exogenous needs to be ‘endogenized’. Empirical research based upon questionnaires to single firms enabled this. Indeed, this work has tried to take into account technology with its specific characteristics in order to appraise its quantitative and qualitative effects on manpower. Far from considering technological development as a general trend, an attempt has been made to comment on the effects on manpower levels of different features characterizing present technologies. Beyond the quantitative effects, the wide variation in skill, instruction and gender requirements must be underlined. In the service subsector-although not affected by a quantitative fall-a progressive movement towards a need for more highly qualified staff emerges in a similar way as in the manufacturing subsector. Of course, quantitative and - qualitative changes in manpower are strictly related. On the one hand, labour turnover is used by 311
M. Frey and M. Vivarelli
management to improve the skill mix of employees: on the other hand, job losses in manufacturing workplaces cannot be compensated for by mobility within the sector itself, because the expanding subsectors are unable to use the same workers who have been dismissed from the production phases. Indeed, the latter are less skilled blue collar workers-as our results indicate-while the expanding demand for labour concerns technicians and graduates [12]. These factors underline the necessity for training and retraining by the firms and of economic policies by the state (so important in controlling the sector). Some final observations can be devoted to the future evolution of employment in Italian telecommunications. A reasonable forecasttaking into account foreign market structures similar to Italy’s, such as the British one [13]-might predict a slowing rate of decrease in manufacturing employment, a stable or increasing level of employment in services and a further improvement in skill mix. Acknowledgements
The authors would like to thank Daniele Archibugi, Gianni Cozzi, Luigi Frey, Paolo Sylos Labini and Antonello Zanfei for helpful comments on previous versions of this paper and three anonymous referees for suggestions which greatly improved the exposition. Of course, the authors remain responsible for anything argued herein. The work is the outcome of a joint effort; however, Sections 2.1, 2.2 and 3.2 have been written by M. Frey and Sections 2.3, 3.1 and 4 by M. Vivarelli. Further
readings
G. Cozzi and M. Benassi, II Mercato Italian0 delle Telecomunicazioni, working paper IDC-IEFE, Milan, 1988. G. Cozzi and A. Gambardella, La Commutazione Pubblica e le Trasmissioni in Italia: Effetti de1 Progress0 Tec-
312
nologico. Dimensione de1 Mercato e Struttura dell’ Offerta. Paper presented at the conference: Le Strategie Imprenditoriali nel Campo delle Telecomunicazioni e dei Servizi Telematici. Bocconi University, Milan, December 6th, 1985. F. De Brabant, Analisi dei Settori: Alimentare, Chimica, Elettroica Civile. Siderurgia, Telecomunicazioni, TessileAbbigliamento, Regione Lombardia, Milan, 1983. EEC Commission, Social Europe, Supplement on new Technology and social change: telecommunications, Luxemburg, 1985. EEC Commission, Communication to the Council, Luxemburg, May 18th, 1984. EEC Commission, The EEC telecommunications industry: competition, concentration and competitiveness, Luxemburg, 1987. EEC Commission, Green Book on Telecommunications Common Market, Luxemburg, November 18th, 1987. G. Locksley, K. Morgan and G. Thomas, Managing growth: employment, skills and training in the telematic services sector. Paper presented at the PICT Conference, Brunei University, 17-19 May, 1989. Minister0 dell’hrdustria, de1 Commercio e dell’ Artigianato. Programma Finalizzato Elettronica, Rome, 1979. A. Nannei, L’Italtel e le Telecomunicazioni, FIMCISL, Milan, November 1986. Nomisma, Politica Industriale e Grandi Progetti: il Caso delle Telecomunicazioni, Laboratorio di Politica Industriale, Bologna, December 1988. L. Sarati, Ufficio Studi Italtel. Evoluzione delle Telecomunicazioni e Sviluppo Socio-economico, Milan, June 1985.
References P. Sylos Labini, Nuove Tecnologie e Disoccupazione, Laterza, Rome-Bari 1989. C.M. Cooper and J. Clark, Employment, Economics and Technology, working paper Brighton, 1982. A. Bragho. La Concorrenza Globale nel Settore della Commutazione Pubblica, Economia e Politica Industriale. n. 58, 1988. SIP, Piano sulle Telecomunicazioni 1986-90, Rome, 1985. SIP, Piano sulle Telecomunicazioni 1988-92, Rome, 1987. Commissione Morganti, Rapport0 al Presidente de1 Consiglio sulle Telecomunicazioni, Franc0 Angeu, Milan, 1984.
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G. Lizzeri and F. De Brabant, L’Industria delle Telecomunicazioni in Italia, Franc0 Angeli Milan, 1979. 8 J. Clark, I. McLoughin, H. Rose and R. King, The Process of Technological Change, New Technology and Social Choice in the Workplace, Cambridge University Press, Cambridge, 1988. 9 G. Cozzi and A. Zanfei, Tecnologia e Interazione Grandi-Piccole Imprese nelle Strategie di Internazionalizzazione. Telecomunicazioni e Telematica tra Competizione Internazionale e Specificita Locali, in V.AA., Strategie Multinazionali, Edizioni 11 Sole 24:1 Milan, 1987. 10 OECD, Telecommunications: Pressures and Policies for Change, Paris 1983. 11 OECD, Trends of change in Telecommunications Policy, Paris 1987. 12 N. Dalla Chiesa (ed), Le Opportunita Occupazionali degli Ex Dipendenti Italtel, working paper Milan, 1985. 13 K. Guy, Communications, in L. Soete (ed), Technological Trends and Employment: Electronics and Communications, Gower Brighton, 1985.
Marco Frey graduated in 1986 from Bocconi University, Milan, after a five-year course in Economics, gaining full marks. Since that time he has been working in Bocconi University at IEFE (Institute of Economics of Energy Sources), a department devoted to the study of industrial economics and industrial policies. He was one of the initiators of the technological division inside the institute. At the moment he is involved in teaching activities both in Bocconi University and in Rome-Tor Vergata University, giving lectures on industrial economics and technology policy. He is author of many publications dealing with technological issues, industrial policies and labour economics.
Marco Vivarelli graduated in 1987 from Boccbni University, Milan, after a five-year course in Economics. He submitted his dissertation on ‘The Compensation Mechanisms of Technological Unemployment’ and achieved full marks, honours and the opportunity to publish the thesis. After one year of research in the Economics department at Bocconi University, he obtained admission to a Ph.D. course in the Science Policy Research Unit
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(SPRU) at Sussex University where he is carrying out research entitled ‘Technology the Employment: and Economic Theory and the Empirical Evidence’. He teaches industrial economies and is author of publications on the employment consequences of technical change and other topics concerning of economic the history economic theory thought, and industrial policies.
Nouvelle technologie t6kcommunications
et emploi en ltalie
dans les
RESUME
L’article traite des consequences sur l’emploi du changement technique dans le secteur de telecommunications en Italie. Apres une breve vue generale de la structure de l’industrie Italienne de telecommunications et son Cvolution economique recente, l’impacte sur la main d’oeuvre des nouvelles techniques Clectroniques est analyse du point de vue quantitatif aussi que qualitatif. Les auteurs soulignent la correlation entre les changements technologiques dans les an&es quatre-vingts et la baisse importante dans le taux d’emploi dans la fabrication en TLC. En ce qui concerne les services de base et les nouveaux services, le taux d’emploi montre une tendence positive; neanmoins, dans ces subsecteurs, l’impacte de la technologie sur le savoir faire est aussi frappant. Par rapport a cela, les auteurs presentent les resultats de leur analyse par questionnaire ment en Italie et comprennant toues les entreprises principales dans le secteur. Les conclusions generales prennent en consideration les Cnormes modifications dans les besoins de main d’oeuvre et soulignent le besoin de formation, de re-formation et d’une politique economique opportune. 313
M. Frey and M. Vivarelli
Neue Technologie und BeschZftigungszahlen im italienischen Fernmeldeverkehr
La technologia nueva y el empleo sector de telecomunicaciones en ltalia
ABRISS
RESUMEN
Dieser Artikel befal3t sich mit den Auswirkungen auf die Beschaftigungszahlen technischer Veranderungen italienischen Fernim meldeverkehr. Nach einem kurzen Uberblick tiber die Struktur der italienischen Fernmeldeverkehrsindustrie und deren moderner Entwicklung werden die Auswirkungen auf die Beschaftigungszahlen der neu eingesetzten Elektronik qualitativ und quantitativ untersucht. Die Autoren betonen die Korrelation von technologischer Veranderungen in den 80iger Jahren und die deutlich fallenden Beschaftigungszahlen im Fernmeldeverkehr . Eine positive Tendenz ist bei den grundlegenden und neuen Dienstleistungen zu beobachten. Doch hat such in diesen Abschnitten die Technisierung eine Auswirkung, vor allem auf die Geschicklichkeit der Arbeiter. In diesem Zusammenhang zeigung uns die Autoren die Ergebnisse einer Analyse von ihrer Umfrage in Italien, die alle wichtigen Firmen in diesem Sektor der Industrie umfasste. Man kommt zu dem allgemeinen Schlul3, enormen unter Berticksichtigung der Veranderungen im erforderlichen Arbeiterpersonal, da8 Ausbildung und Umschlung und entsprechende wirtschaftliche Marjnahmen erforderlich sind.
En este articulo se examina el efecto de 10s tecnologicos en el sector de cambios telecomunicaciones en Italia sobre el empleo. Primer0 se ofrece un vision general breve de la estructura de la industria italiana de la evolution telecomunicaciones y de economica reciente. A continuation se estudia el impact0 de las tecnicas nuevas electronicas en el campolaboral tanto desde el punto de vista cuantitativa corn0 cualitativa. Los autores destacan la relation entre 10s cambios tecnologicos de 10s adios 80 y el descenso marcado en empleo en el sector de la fabrication en telecomunicaciones. En lo que concierne a 10s servicios basicos y nuevos, se observa una tendencia positiva de1 empleo: sin embargo es en estos sub-sectores que se nota maz el impact0 de la tecnologia. Los autores presentan aqui 10s resultados obtenidos de un analisis llevado a cabo en Italia por medio de un cuestionario, abarcando a todas las empresas principales de1 sector. Las conclusiones generales repasan 10s tremendos cambios en la mano de obra necesaria y la importancia de 10s programas de formation initial, formation en nuevos sectores y de las politicas economicas pertinentes.
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Technovation
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Volume 11 No 5
New technology and employment Italian telecommunications Marco
in
Frey*
IEFE, Bocconi University,
via Sarfatti 25, 20136 Milano
(Italy)
Marco Vivarelli SPRU,
Sussex University,
Brighton
lU. K. !
Abstract
The paper deals with the employment consequences of technical change in the Italian telecommunications sector. After a short overview of the structure of the Italian telecommunications industry and its recent economic evolution, the impact of new electronic techniques on labour is studied from both a quantitative and a qualitative point of view. The authors underline the correlation between technological change in the ’80s and the sharp fall in TLC manufacturing employment. As far as basic and new services are concerned, employment shows a positive trend; nevertheless in these sub-sectors the impact of technology on skills is also striking. With regard to this, the authors present the results of their questionnaire analysis carried out in Italy and embracing ail the major firms within the sector. The general conclusions take into account the huge modifications in manpower requirements and stress the necessity of training, retraining and appropriate economic policies.
1.
Introduction
The employment consequences of technical change are often a topic for social and economic debate and are a recurring issue in the history of economic thought. However, economic theory does not provide a framework suitable for use in empirical, sectoral studies of the subject. The principal aims of this study are as follows. Firstly, the importance of technological * Corresponding
Technovation
unemployment-or ‘Ricardian unemployment’ as it is called by Sylos Labini in his most recent work [I]-will be underlined. This category is often neglected by economists who deal mainly with ‘Keynesian unemployment’ (i.e. that which is due to a deficiency in demand) and ‘classical unemployment’ (due to increased costs of labour). In spite of conventional wisdom, technological unemployment is indispensable in throwing light on the situation in some industrial sectors.
author.
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Secondly, a sectoral case has been chosen with the aim of taking into account technological evolution in a specific context; otherwise technology remains exogenous, as in most economic studies. Indeed, some economic studies completely ignore technology as a separate issue, whilst others take into account only the aggregate trends in such a way as to neglect the specific features and impact of technological transformations. Last, but not least, interpretations of changes in the structure of telecommunications manpower and in the skill requirements will be put forward. This is an important issue which has often been neglected by economic theory. In fact-as clearly shown in the book by Cooper and Clark [a]-changes in skill requirements are crucial in terms of both the consequences on the work conditions and also with regard to the quantitative effects on employment. Indeed, shortage of skilled workers can present serious obstacles to reabsorbing redundant manpower. The structure of the Italian telecommunications sector will be briefly outlined in Section 2.1, and in following sections, economic and technological evolutions within the sector will be presented. Section 3 is the core of the work; in the first part the employment trends will be discussed. By comparing employment evolution with economic and technological trends it will be shown to be possible to identify technology as the main cause of employment collapse in the ’80s. Section 3.2 will be devoted to a discussion of our which questionnaire-based research has covered the main firms within the sector. The questionnaire analysis concerns employment trends and focuses on qualitative effects in order to show the vast impact of technical change on manpower structure. Eight questionnaires have been sent to the five main manufacturing firms and the three main service companies. These firms operate entirely within telecommunications sector boundaries and represent from 80 to 90% of total manpower employed in the sector. Data have been col304
lected on employment levels, specific skill mix and turnover and training activities. Time series show actual information since 1970 to 1988 and forecasted values for subsequent years.
2. Telecommunications general overview 2.1.
in Italy: a
The sector
As in other countries, the Italian telecommunications sector is characterized by a sharp distinction between industrial firms (manufacturing plants) and service firms devoted to managing the network. Production is characterized by the existence of a strong oligopoly with market shares divided on a geographical basis. Industrial activity can be classified into three components. (1) Switching equipment (electromechanical, electronic or digital exchanges) for voice, telex and data traffic, and its related software. Switching can be divided into two subsections, public and private (PABX, KTS, user systems). (2) Transmission equipment. This includes the related software and the transmission path subsector (for instance simple and coaxial cables, optical fibres, etc.). (3) User terminals, including telephone and video terminals installed at the user end. In manufacturing, five main firms can be singled out: Italtel, a big public company and leader in switching equipment; another Italian firm, Telettra (part of the FIAT group), a leader in the transmission subsector; and the subsidiaries of three multinational firmsSiemens, Face-Alcatel and Fatme-Ericsson. Turning the attention to the service sector, five principal players can be identified: (1) SIP (Italian Society for Telecommunications Service). This is the most important service firm, taking care of urban networks and Technovation
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some trunk connections. SIP provides all the services to the users: linking, repairs, etc. It is controlled by the state through its holding in IRI-STET; 80% of service employment can be found in this firm. (2) ASST (State Agency for Telecommunications Service). This is a state-owned firm devoted to trunk and international connections, recently absorbed by IRI-STET. (3) Italcable. This is a firm partially owned by the state dealing with intercontinental connections. (4) Telespazio, also controlled by the state (through IRI-STET) is devoted to satellite connections. (5) Minister0 delle Poste e Telecomunicazioni; a state ministry that has responsibility for coordinating and planning industrial policy for telecommunications. It directly manages the telegraph and telex services. Taking into account the structure described above, it can be seen that the Italian telecommunications system is still characterized by a public monopoly on the one hand and a productive oligopoly on the other. 2.2.
The economic
evolution
In recent history, distinguished:
three
phases
can
be
(1) a fast growth in sales, investment and trunk connections in the early ‘7Os, until 1974; (2) a sudden halt to this growth in the mid ’70s; (3) the ‘recovery’ of the ’80s. The first phase was sustained by high public demand to complete the trunk connection network. Extensive growth ceased in the mid ’70s for many reasons, including the general economic crisis, the reduction in government expenditure and increasing difficulties in export flow (the latter was caused not only by the international economic crisis. but also by the lack of a coherent ‘Italian model’ for telecommunications which could be easily exported Technovation
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[3].) The telecommunications crisis became apparent with the severe and worsening financial trouble in SIP, which was squeezed by increasing costs on the one hand and the jamming of the telephone charging system on the other. As a consequence of the crisis, SIP suddenly reduced its equipment procurements; therefore, its problems affected demand (from manufacturing firms) which decreased rapidly. An indicator of the fall in SIP investment is the number of the lines placed in service by the company (881000 in 1973, only 55 1000 in 1976 [4,5]). This recessive spiral involved a strong reduction in investment in the entire sector during 1974 and 1975. In addition, investment changed in nature from extensive to intensive, with capital substitution, innovation and labour-saving changes. In spite of the commencement of rationalization, the sector remained economically stagnant until the end of the ’70s. Only in the new decade an evident recovery did begin; examples of this recovery are the cases of SIP and Italtel. SIP was able to levy higher charges and established better relations with the State and the other service firms. In other words, SIP obtained more freedom in management and pricing policies thanks to a ‘deregulation’ of its relationships with the state and state-owned Italtel and ASST. Together with internal reorganization, this created conditions favourable to a sustained recovery, which is now complete. In Italtel different problems and different solutions have occurred: in this case a belated but thorough rationalization has been achieved, based on a reduction in labour costs.
2.3.
Technology
Until the ’70s telecommunications were characterized by relative ‘technological stability’. The established technical standards and the accumulated know-how permitted the use of standardized production methods and
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extensive investment, given the relative constancy of capital intensity (K/L ratio). Thus telecommunications linear were on a ‘technological trajectory’ and their future evolution was predictable [6,7]. The diffusion of the ‘microelectronic paradigm’ undermined this stability and threw the sector into a turmoil; the areas affected were as follows. (I) Switching. This is the subsector where the consequences of technical change were most striking. The transition from electromechanical to electronic technologies implied integration of different systems (for instance voice and data networks), cutting of unit costs and better performances in telecommunications services. The transition involved decisive and irreversible transformations in the production system [8]. If the weight of switching within the sector is taken into account, the huge employment consequences of technological transformations can readily be seen (see Section 3). (2) Transmission. In this subsector technological progress did not have as much impact as in switching. Technological change implied two fundamental phenomena: (a) the complete transition from an analogue to a digital network with the opportunity to establish the integrated services and data network (ISDN), (b) the transition from traditional transmission paths to optical fibres and satellites. In spite of the importance of these technological innovations, the impact on employment level was much less marked than in the case of switching. (3) New services and user systems. Microelectronics brought forth a host of new appliances: new communication devices such as fax and entirely new services, e.g. the ‘value added services’ (VAS). (4) Software, which has become crucial in every technological change described so far.
[6]. Complete renewal of the network petted by 2010.
3.
is ex-
Employment
3.1. Quantitative
effects of technical
change
Our questionnaire analysis distinguishes the manufacturing from the service subsector.
Manufacturing
The aggregate employment trends of the five main telecommunications firms are reported in Fig. 1. The trend partially reflects the economic evolution discussed in Section 2.2. In particular, rapid growth is obvious until the mid ’70s: then a sudden halt occurred. This deflection is attributable to economic factors; on the other hand, as far as the employment fall in the ’80s is concerned, technological change assumes a crucial role. The transition to electronic techniques-begun in the early ’80s-can be but forward as the main cause of the employment collapse. Indeed, the second half of the ’70s was characterized by stagnation
The most important change-from electromechanical to electronic techniques-did not become obvious until 1980, when the first electronic telephone exchanges were produced 306
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of public demand and therefore by employment stability; on the other hand, the ’80s showed a recovery in national and international demand but at the same time an acceleration in labour-saving technical progress occurred. This acceleration can explain the steep decrease in employment shown in Fig. 1: in seven years telecommunications manufacturing lost 20 000 employees. It is important to recognize two basic phenomena: (1) the transition to electronic switching involved a decrease of added value attributable to telecommunications and a striking decrease in manpower requirements, and (2) the switching subsector employed more than 50% of the sector’s manpower at the end of the ’70s. In this context, the adoption of electronic technologies did have a major effect on employment levels (similar evolutions had occurred in France and the USA in the mid ’70s). The employment evolution in Telettra confirms the technological nature of telecommunications unemployment. Our data show that the situation of Telettra has been very different from the aggregate trend and has been related to purely economic factors, namely the slowing of demand in the second half of the ’70s and the recession in the early ’80s. Telettra’s evolution shows an interesting indifference to the labour-saving technological changes of the ’80s. This may be due to the better export performance of the firm but especially to the fact that Telettra does not include switching in its principal activities. In other words, Telettra did not undergo the large transformation in production that affected the other firms such as Italtel. Fundamental production changes in methods determined the collapse of employment levels. In the light of the facts which emerged in the ‘8Os, the accelerated and extensive growth in the early ’70s appears excessive. During those years, employment growth occurred-with constant technologies-at a rate of 19% per year: six times greater than the national average. If we take into account the fact that electronic techniques were already well Technovation Volume 11 No 5
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known and affirmed in other countries, the short-sightedness of the policy that allowed such uncontrolled employment growth is obvious. In the ’70s there was little uncertainty about future substitution of electromechanical techniques for electronic ones. An appropriate industrial policy at this stage would have had to plan an intervention in order to control the employment trends and the adoption of new technologies. For instance, the increase in demand could have been used to justify the introduction of new electronic techniques or to attract international partners who were already familiar with the new technologies. Instead, nothing was planned and in the ’80s a sudden and violent rationalization became necessary.
Basic and new services
Service firms present much more positive employment trends (an increase of 20000 employees has occurred since 1970). More specifically, the spread of fax and other communications systems-although still very slow in Italy-has entailed an increase in employment in service companies which has more than compensated for job losses in the area of maintenance of traditional services. On the other hand, the commercial development of new equipment is one of the causes of the emergence of new skill requirements, the consequences of which are reported in Section 3.2. Change has consequences for both installation and maintenance. Concerning the former, smaller and more powerful exchanges and lower cable requirements imply a progressive decrease and simplification of the work involved in the installation of network lines. Maintenance should become simpler and less frequent, because of the greater quality of new equipment. Together with these threats to employment levels, the possibility of manpower enlargement should still be associated with the diffusion of new communication and value-added services.
M. Frey and M. Vivarelli
Actually, the positive employment effect of new communication services seems to have slowed down in recent years, whilst the potential of VAS has only recently become recognizable. At present, the companies operating in the field of databanks and other VAS employ about 1500 workers (half of whom are devoted to marketing functions). Hence the impact on the employment figure of the entire sector is still negligible. On the other hand, the development of more advanced countries such as France and the trends in demand predicted by SIP both suggest a lOolo annual increase in employment in VAS companies in the coming years. Thus, the VAS area-although marginal today-could be an important source of employment within the sector in the near future. In this complex scenario, the recent evolution of SIP shows the end of a period in which the service subsector was an ‘employment sponge’ for Italian telecommunications. In this context, it is worth noting the end of the agreement between SIP and Italtel which involved the transfer of 2000 employees from Italtel to SIP over five years (1982-86). More recently, SIP plans have explicitly forecast stability of internal employment over the coming years [5]; similar management intentions can be found in Italcable and a substantial manpower redundancy in ASST is observable, as well. On the whole, it is thought that service employment will remain constant (or will show a slight increase) in the coming years. Nevertheless, behind this apparent stability, the mix of functions and skills will continue to change extensively (see Section 3.2.2).
Small peripheral
firms
Italian telecommunications are characterized not only by the presence of big firms but also by a large number of small firms dependent on commissions from the larger ones. For the purpose of this analysis, these small firms have to 308
be considered in order to avoid a large distortion in the measure of employment consequences of technical change. In particular, if this subsection of telecommunications is not taken into account, unemployment caused by the technological transition in the ’80s would be underestimated. Indeed, a large flow of manpower from the peripheral firms to the large firms occurred in those years. Large firms reabsorbed a lot of production phasespreviously decentralized in small firms-with the purpose of safeguarding their internal employment levels. For example, Italtel reabsorbed 5000 employees in the period 1975-1980 191. If we take this phenomenon into account, the actual employment decrease was even more striking than that shown in Fig. 1 (in which only the employment patterns of the five main firms are computed, because of a lack of about the peripheral precise information firms). 3.2.
Qualitative
effects
of technical
change
This section comprises a commentary on the results of our questionnaire concerning the changes which have occurred in the manpower structure in both industry and services. The ‘victims’ of the quantitative reduction in employment levels described so far will be identified. 3.2. 1.
Manufacturing
firms
Qualifications
In the five major firms, similar trends show a marked decrease in the number of blue collar workers (Fig. 2). On the other hand, the percentage of white collar workers is increasing everywhere and in two firms it is already dominant. On the whole, the worker component decreases one per cent per annum (on average); the clerical component is stable in absolute Technovation
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-
R&D
---
Fig. 2. Qualifications 1992 (o/o).
in the
five
main
Workers
firms
1970-
Fig. 3.
Divisions
Production Installation
-
Trade
-
Others
in the five main firms 1970-1992 (o/o).
terms; management represents a low proportion in absolute terms but increases in percentage terms.
-
Divisions
.
Uniform trends concern the production divisions which decline over time and the R&D and trade divisions which increase in importance in all the firms (Fig. 3). The diminishing volume of production is linked with the fall in the number of blue collar workers. At the same time, the exception of Telettra is noticeable; again it is related to the fact that Telettra was not affected by the dramatic change in switching techniques.
--
Fig. 4. Instruction 1970-1992 (Vo).
degrees
in the
five
Graduates With Diploma Others
main
firms
Gender Education
degrees
The percentage of graduates and employees with a diploma is increasing everywhere, while the proportion of non-qualified workers (still over 70%) is decreasing (Fig. 4). Technovation
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In Fig. 5 a general fall in the female:male ratio can be observed, with the partial exception of Italtel where the public nature of the firm involved a policy of positive action in favour of women.
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A4 Frey and M. Vivarelli
l
-
Face
-
Fatmc
-
ltaltcl
-
Siemcns .
o-(
I
:
:
:
I
:
:
I
I
I
:
:
:
:
I
:
:
:
:
I
:
Telettra
I
1nnnnnnnnn.n1ol-.“1”-,,~
Fig. 5.
Female employment
in the five main firms
1970-1992 (To).
A high degree of standardization of tasks and thus absence of training, with the exception of some short and simple courses of apprenticeship. Technical change and its consequent reorganization of labour took place in this context. The requirements for a generic labour force slowed down and a demand for a new type of labour developed. Turnover did not compensate for job losses, but was crucial in modifying the qualitative structure of employment which has been continuously balanced in favour of better qualified employees.
As emerges from the data, technical changes had considerable effects on demand for skilled labour. This impact was more appreciable in Southern Italy where plants had a large concentration of production phases carried out by lower qualified workers.
Some general comments
3.2.2.
It is now possible to identify those who suffered because of the rationalization of the ’80s. The victims of the employment cuts appear to be the less-qualified workers in the production divisions doing manual tasks and having low education degrees (tasks which were often allocated to female workers). The picture supports the previous analysis which dealt with the technological causes of the fall in manpower levels. Indeed, it is seen that the most striking change occurred in manufacturing of switching components: the most important section of the where less-qualified production division workers were employed. In order to understand more deeply the qualitative consequences of technological change, the situation inherited from the ’70s has to be borne in mind: l
A prevalence of young manpower, with a higher female component and a generally low level of qualification. This was the typical composition of a labour force employed in a mature and standardized production environment [7].
310
Service
firms
The substantial stability of employment levels in services firms has been reported above. Nevertheless, the uniform path in quantitative terms disguises large variations in the relative components within the service manpower. As in the industrial subsector, a trend towards higher qualifications is obvious; skilled workers are already dominant both in and qualification, to education respect although services started from a betterqualified initial composition of manpower, see Fig. 6 (reliable data are available only for SIP, which the main service firm employs more than 80% of service manpower). Furthermore, in this subsector, the movement towards increased levels of qualification is coupled with a decreasing percentage of women employed in the workplace. Some general comments
As far as service firms are concerned, the situation in the labour market seems less tight. Technovation
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At the same time, it is necessary to retrain managers in order to enable them to face the new environment and cope effectively with increased competition (let us remember, for example, the need for a market-oriented mentality to face the challenge of computer firms [lO,lll>. --
Workers
4.
Fig. 6.
Qualifications
in SIP 1970-1992.
However, in this subsector manpower needs extensive retraining both for installation and maintenance tasks. In fact, the installation of new services, terminals and user systems requires new skills in comparison with those needed for the traditional maintenance of telephone links. In Section 3.1 .B the evolution of new services and VAS has been briefly described. Here it suffices to say that their impact on skill requirements has a major point in common. This is the increasing importance of software in comparison with hardware. As a consequence, roles in maintenance shift from actual repairs to controlling and testing functions [8]. Indeed, SIP has tried to encourage internal training and requalification and has begun a process of ‘qualified’ turnover: in 1986 90% of new SIP employees had diplomas or were graduates [4,5]. Finally, indirect effects related to the new technological trajectory should be briefly outlined. Globalization and stronger competition involve continuous attention to cost-cutting and efficient allocation of resources within the firm. Therefore, requalification programmes may become necessary and sometimes problems of redundancy may arise. Technovation
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Conclusions
It is now possible to draw some tentative conclusions, in response to the questions posed in the Introduction. As far as the quantitative effects of technical change are concerned, the traditional concepts of Keynesian unemployment and classical unemployment are not by themselves adequate to describe the sectoral situation studied in this paper. In order to explain the crash in telecommunications employment which occurred in the ‘8Os, a third category of Ricardian unemployment has to be introduced. With this in mind, it is necessary to specify and date technical change: in other words, a variable which is generally considered exogenous needs to be ‘endogenized’. Empirical research based upon questionnaires to single firms enabled this. Indeed, this work has tried to take into account technology with its specific characteristics in order to appraise its quantitative and qualitative effects on manpower. Far from considering technological development as a general trend, an attempt has been made to comment on the effects on manpower levels of different features characterizing present technologies. Beyond the quantitative effects, the wide variation in skill, instruction and gender requirements must be underlined. In the service subsector-although not affected by a quantitative fall-a progressive movement towards a need for more highly qualified staff emerges in a similar way as in the manufacturing subsector. Of course, quantitative and - qualitative changes in manpower are strictly related. On the one hand, labour turnover is used by 311
M. Frey and M. Vivarelli
management to improve the skill mix of employees: on the other hand, job losses in manufacturing workplaces cannot be compensated for by mobility within the sector itself, because the expanding subsectors are unable to use the same workers who have been dismissed from the production phases. Indeed, the latter are less skilled blue collar workers-as our results indicate-while the expanding demand for labour concerns technicians and graduates [12]. These factors underline the necessity for training and retraining by the firms and of economic policies by the state (so important in controlling the sector). Some final observations can be devoted to the future evolution of employment in Italian telecommunications. A reasonable forecasttaking into account foreign market structures similar to Italy’s, such as the British one [13]-might predict a slowing rate of decrease in manufacturing employment, a stable or increasing level of employment in services and a further improvement in skill mix. Acknowledgements
The authors would like to thank Daniele Archibugi, Gianni Cozzi, Luigi Frey, Paolo Sylos Labini and Antonello Zanfei for helpful comments on previous versions of this paper and three anonymous referees for suggestions which greatly improved the exposition. Of course, the authors remain responsible for anything argued herein. The work is the outcome of a joint effort; however, Sections 2.1, 2.2 and 3.2 have been written by M. Frey and Sections 2.3, 3.1 and 4 by M. Vivarelli. Further
readings
G. Cozzi and M. Benassi, II Mercato Italian0 delle Telecomunicazioni, working paper IDC-IEFE, Milan, 1988. G. Cozzi and A. Gambardella, La Commutazione Pubblica e le Trasmissioni in Italia: Effetti de1 Progress0 Tec-
312
nologico. Dimensione de1 Mercato e Struttura dell’ Offerta. Paper presented at the conference: Le Strategie Imprenditoriali nel Campo delle Telecomunicazioni e dei Servizi Telematici. Bocconi University, Milan, December 6th, 1985. F. De Brabant, Analisi dei Settori: Alimentare, Chimica, Elettroica Civile. Siderurgia, Telecomunicazioni, TessileAbbigliamento, Regione Lombardia, Milan, 1983. EEC Commission, Social Europe, Supplement on new Technology and social change: telecommunications, Luxemburg, 1985. EEC Commission, Communication to the Council, Luxemburg, May 18th, 1984. EEC Commission, The EEC telecommunications industry: competition, concentration and competitiveness, Luxemburg, 1987. EEC Commission, Green Book on Telecommunications Common Market, Luxemburg, November 18th, 1987. G. Locksley, K. Morgan and G. Thomas, Managing growth: employment, skills and training in the telematic services sector. Paper presented at the PICT Conference, Brunei University, 17-19 May, 1989. Minister0 dell’hrdustria, de1 Commercio e dell’ Artigianato. Programma Finalizzato Elettronica, Rome, 1979. A. Nannei, L’Italtel e le Telecomunicazioni, FIMCISL, Milan, November 1986. Nomisma, Politica Industriale e Grandi Progetti: il Caso delle Telecomunicazioni, Laboratorio di Politica Industriale, Bologna, December 1988. L. Sarati, Ufficio Studi Italtel. Evoluzione delle Telecomunicazioni e Sviluppo Socio-economico, Milan, June 1985.
References P. Sylos Labini, Nuove Tecnologie e Disoccupazione, Laterza, Rome-Bari 1989. C.M. Cooper and J. Clark, Employment, Economics and Technology, working paper Brighton, 1982. A. Bragho. La Concorrenza Globale nel Settore della Commutazione Pubblica, Economia e Politica Industriale. n. 58, 1988. SIP, Piano sulle Telecomunicazioni 1986-90, Rome, 1985. SIP, Piano sulle Telecomunicazioni 1988-92, Rome, 1987. Commissione Morganti, Rapport0 al Presidente de1 Consiglio sulle Telecomunicazioni, Franc0 Angeu, Milan, 1984.
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G. Lizzeri and F. De Brabant, L’Industria delle Telecomunicazioni in Italia, Franc0 Angeli Milan, 1979. 8 J. Clark, I. McLoughin, H. Rose and R. King, The Process of Technological Change, New Technology and Social Choice in the Workplace, Cambridge University Press, Cambridge, 1988. 9 G. Cozzi and A. Zanfei, Tecnologia e Interazione Grandi-Piccole Imprese nelle Strategie di Internazionalizzazione. Telecomunicazioni e Telematica tra Competizione Internazionale e Specificita Locali, in V.AA., Strategie Multinazionali, Edizioni 11 Sole 24:1 Milan, 1987. 10 OECD, Telecommunications: Pressures and Policies for Change, Paris 1983. 11 OECD, Trends of change in Telecommunications Policy, Paris 1987. 12 N. Dalla Chiesa (ed), Le Opportunita Occupazionali degli Ex Dipendenti Italtel, working paper Milan, 1985. 13 K. Guy, Communications, in L. Soete (ed), Technological Trends and Employment: Electronics and Communications, Gower Brighton, 1985.
Marco Frey graduated in 1986 from Bocconi University, Milan, after a five-year course in Economics, gaining full marks. Since that time he has been working in Bocconi University at IEFE (Institute of Economics of Energy Sources), a department devoted to the study of industrial economics and industrial policies. He was one of the initiators of the technological division inside the institute. At the moment he is involved in teaching activities both in Bocconi University and in Rome-Tor Vergata University, giving lectures on industrial economics and technology policy. He is author of many publications dealing with technological issues, industrial policies and labour economics.
Marco Vivarelli graduated in 1987 from Boccbni University, Milan, after a five-year course in Economics. He submitted his dissertation on ‘The Compensation Mechanisms of Technological Unemployment’ and achieved full marks, honours and the opportunity to publish the thesis. After one year of research in the Economics department at Bocconi University, he obtained admission to a Ph.D. course in the Science Policy Research Unit
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(SPRU) at Sussex University where he is carrying out research entitled ‘Technology the Employment: and Economic Theory and the Empirical Evidence’. He teaches industrial economies and is author of publications on the employment consequences of technical change and other topics concerning of economic the history economic theory thought, and industrial policies.
Nouvelle technologie t6kcommunications
et emploi en ltalie
dans les
RESUME
L’article traite des consequences sur l’emploi du changement technique dans le secteur de telecommunications en Italie. Apres une breve vue generale de la structure de l’industrie Italienne de telecommunications et son Cvolution economique recente, l’impacte sur la main d’oeuvre des nouvelles techniques Clectroniques est analyse du point de vue quantitatif aussi que qualitatif. Les auteurs soulignent la correlation entre les changements technologiques dans les an&es quatre-vingts et la baisse importante dans le taux d’emploi dans la fabrication en TLC. En ce qui concerne les services de base et les nouveaux services, le taux d’emploi montre une tendence positive; neanmoins, dans ces subsecteurs, l’impacte de la technologie sur le savoir faire est aussi frappant. Par rapport a cela, les auteurs presentent les resultats de leur analyse par questionnaire ment en Italie et comprennant toues les entreprises principales dans le secteur. Les conclusions generales prennent en consideration les Cnormes modifications dans les besoins de main d’oeuvre et soulignent le besoin de formation, de re-formation et d’une politique economique opportune. 313
M. Frey and M. Vivarelli
Neue Technologie und BeschZftigungszahlen im italienischen Fernmeldeverkehr
La technologia nueva y el empleo sector de telecomunicaciones en ltalia
ABRISS
RESUMEN
Dieser Artikel befal3t sich mit den Auswirkungen auf die Beschaftigungszahlen technischer Veranderungen italienischen Fernim meldeverkehr. Nach einem kurzen Uberblick tiber die Struktur der italienischen Fernmeldeverkehrsindustrie und deren moderner Entwicklung werden die Auswirkungen auf die Beschaftigungszahlen der neu eingesetzten Elektronik qualitativ und quantitativ untersucht. Die Autoren betonen die Korrelation von technologischer Veranderungen in den 80iger Jahren und die deutlich fallenden Beschaftigungszahlen im Fernmeldeverkehr . Eine positive Tendenz ist bei den grundlegenden und neuen Dienstleistungen zu beobachten. Doch hat such in diesen Abschnitten die Technisierung eine Auswirkung, vor allem auf die Geschicklichkeit der Arbeiter. In diesem Zusammenhang zeigung uns die Autoren die Ergebnisse einer Analyse von ihrer Umfrage in Italien, die alle wichtigen Firmen in diesem Sektor der Industrie umfasste. Man kommt zu dem allgemeinen Schlul3, enormen unter Berticksichtigung der Veranderungen im erforderlichen Arbeiterpersonal, da8 Ausbildung und Umschlung und entsprechende wirtschaftliche Marjnahmen erforderlich sind.
En este articulo se examina el efecto de 10s tecnologicos en el sector de cambios telecomunicaciones en Italia sobre el empleo. Primer0 se ofrece un vision general breve de la estructura de la industria italiana de la evolution telecomunicaciones y de economica reciente. A continuation se estudia el impact0 de las tecnicas nuevas electronicas en el campolaboral tanto desde el punto de vista cuantitativa corn0 cualitativa. Los autores destacan la relation entre 10s cambios tecnologicos de 10s adios 80 y el descenso marcado en empleo en el sector de la fabrication en telecomunicaciones. En lo que concierne a 10s servicios basicos y nuevos, se observa una tendencia positiva de1 empleo: sin embargo es en estos sub-sectores que se nota maz el impact0 de la tecnologia. Los autores presentan aqui 10s resultados obtenidos de un analisis llevado a cabo en Italia por medio de un cuestionario, abarcando a todas las empresas principales de1 sector. Las conclusiones generales repasan 10s tremendos cambios en la mano de obra necesaria y la importancia de 10s programas de formation initial, formation en nuevos sectores y de las politicas economicas pertinentes.
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Technovation
en el
Volume 11 No 5