The Trifurcation of the Labor Markets in the Networked, Knowledge-Driven, Global Economy
Meir Russ ()
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Meir Russ: Austin E. Cofrin School of Business
Journal of the Knowledge Economy, 2017, vol. 8, issue 2, No 16, 672-703
Abstract This conceptual, interdisciplinary paper will start with an introduction to the new, networked, knowledge-driven, global economy. The objective of this paper, using a narrative review of the economic, business, and management literature of labor markets and human capital, will be to negate the notion that we have, at present, one labor market for human capital, and will conjecture that we currently have (or are about to have) three autonomous markets for labor that are driven by different market dynamics and mechanisms. The three markets are identified as follows: routine labor, skilled labor, and talent. Each one of the markets will then be discussed, including future trends, issues, and remedies. This trifurcation of the labor markets is mostly the combined result of phase transition resulting from three major impetuses. The first is the effect(s) that technological revolutions have on the supply and demand of/for multidimensional skills of human capital. Second is the “winner take all” market structure enabled by the “industrial” economy’s framed legislation and social norms. The third impetus is the context (for the technological revolutions and the nature of the markets) of a networked global economy that is driven by knowledge developing at an accelerated pace. The narrative multidisciplinary literature review used was a modified version of the integrative literature review. The review confirmed that the three labor markets’ dynamics are to a considerable degree dissimilar and that legislating, conducting monetary, and fiscal policies that treat them as one labor market could (and probably already does) cause more harm than good, resulting in destabilizing the labor markets (as indicated by the growing unemployment rate of the young generation worldwide) and by extension, the social fabric of the new economy (as indicated by the growing economic and educational inequality worldwide). The paper concludes with a framework of the three labor markets, followed by a summary, including the need for a new legal and social paradigm regarding labor and the need for a new formal model for value creation. Finally, the limitations of the study as well as potential research gaps are identified.
Keywords: New knowledge-driven economy; Labor markets; Trifurcation; Routine labor; Skilled labor; Talent (search for similar items in EconPapers)
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