1Q26_ Quarterly Outlook Report_Final_EN - Flipbook - Page 39
T H E P LUMB LI N E | A RETU RN TO F I RS T PRI N CI PL ES
to result in job displacement in certain occupations, this outcome is not unprecedented. Previous
waves of technological change have consistently reshaped labour markets by eliminating specific
roles while creating demand elsewhere.
For instance, the mechanization of agriculture in the early 20th century reduced farm employment
but coincided with a rapid expansion of manufacturing and later services employment. Similarly,
automation in manufacturing during the late 20th century displaced routine production jobs but
contributed to rising employment in logistics, engineering, and business services. More recently,
the digitization of retail reduced employment in brick-and-mortar stores while driving growth in
e-commerce, warehousing, software development, and delivery services. In each case,
technology altered the composition of employment rather than causing a sustained rise in
aggregate unemployment.
In the past, technological innovation has disrupted employment in certain sectors while giving
rise to new occupations and industries
12
160
9
120
6
80
Millions of jobs
3
40
0
0
1840
1856
1872
1888
1904
1920
Agriculture employment - LHS
1936
1952
1968
1984
2000
2016
Non-agriculture employment - RHS
Source: Our World in Data, Bloomberg Finance LP, Scotia Wealth Management
AI may also arrive at a moment when labour scarcity, rather than labour surplus, becomes a
greater challenge. Demographic trends point to a structural tightening of labour supply across
most high-income economies. Median population ages are rising, the share of individuals aged
65 and over is increasing, and birth rates have declined meaningfully. Net migration, which
historically offset these pressures, has also slowed in many regions.
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