Technological advancement implies an increase in standards of living. It may be defined as any change in a production process leading to higher standards of living through increased output from the same amounts of resources or through the use of fewer resources to produce the same levels of output.
Improvements in standards of living may take two forms, or a combination of both. Output for the same employment may rise, yielding higher per capita and consumption, or fall in hours of work to produce the same output. Technological advancement is the essential element in reducing the burden of scarce resources.
However, many labor leaders, business executives, labor researchers, and politicians continually predict dire consequences from technological advancement, touching upon the apparent paradox between the obvious historical benefits of technology and the constant predictions of significant human suffering from dislocation.
Technological advancement has raised again the old classical debate about the relationship between technology and employment. The fear is that technologies have weakened - or even eliminated - the positive correlation between growth and employment.
Short-run problems may certainly arise from technological advancement if there are imperfections in labor and production markets and especially when resource markets are less than perfectly competitive, but markets will eventually adjust to eliminate any involuntary unemployment.
With perfectly competitive markets, technological advancement in one industry simply releases labor resources for other uses, in that industry or in another.

Studies suggest the introduction of computers had no significant effect on productivity.

The same process innovations, which displace workers in the user industries, create new jobs in the capital sectors where the new machines are produced.
On the one hand, process innovations involve the displacement of workers; on the other hand, these innovations themselves lead to a decrease in the unit costs of production and - in a competitive market - this effect is translated into decreasing prices; in turn, decreasing prices stimulate a new demand for products and so additional production and employment.
Attention should be focused on the long-run direct relationship between technology and employment, in order to detect whether technical change is associated with a long-run decline in the demand for labor.

Two-way Effect
Technology both eliminates and creates jobs. Generally it destroys lower wage, lower productivity employment, while it creates jobs that are more productive, highly skilled and better paid. Historically, the income-generating effects of new technologies have proved more powerful than the labor-displacing effects: technological progress has been accompanied not only by higher output and productivity, but also by higher overall employment in advanced societies.
Virtually all types of technological change result in increases in the demand for labor in some labor markets and decreases in other labor markets. The introduction of assembly line production methods and the production of interchangeable parts resulted in a substantial increase in labor productivity. This technological innovation also resulted in an increase in the demand for unskilled workers and a decrease in the demand for skilled artisans. The introduction of automated manufacturing processes, on the other hand, has resulted in a decrease in the demand for unskilled workers and an increase in the demand for quality control technicians and computer programmers.
In general, technological change will alter the composition of the demand for labor, raising the demand for some types of labor and reducing for other types of labor. Those who lose jobs as a result of technological change that reduces the demand for that category of labor are said to be structurally unemployed.
Even though technological change may adversely affect the demand for labor in some labor markets, the overall effect of technological change on total employment may be positive, as it tends to increase the rate of economic growth. Higher rates of economic growth are generally associated with lower unemployment rates. This relationship between changes in the rate of economic growth and the change in the unemployment rate indicates that a 1% increase in economic growth lowers the unemployment rate by 0.3%. While there is some doubt about the exact magnitude of this effect, there is substantial empirical evidence that unemployment rates tend to fall when the rate of economic growth is higher.

Technology creates jobs that are more productive, highly skilled and better paid.

While the effect of technological change on the unemployment rate is ambiguous, this may be little consolation to those workers whose job skills have been rendered obsolete as a result of technological change. One of the issues that every industrialized society has to deal with is the extent to which the government should be involved in the retraining of structurally unemployed workers.
A good deal of recent debate has involved the related question of whether the widespread use of computers in the workplace has enhanced productivity. Preliminary studies suggested that the introduction of computers had no significant effect on productivity. More recent studies have generated mixed results. It is fairly clear, though, that the widespread introduction of computers has, to date, had a less dramatic effect on productivity and economic growth than from the widespread introduction of such earlier innovations as the steam engine, electricity, and the internal combustion engine.

Reforms
One additional cause of unemployment growth is related to the incapability of policy-makers to take more decisive steps toward modernization and reforms.
In Iran and due to many reasons, notably prolonged economic stagnation and political isolation, there is a weak influx of foreign capital and investments. This also limits the possibilities for further growth and development just as it reduces the employment prospects and increases unemployment.
The crucial issue is the slow and inadequate structural adaptation of the economy and social structure to the new modernization and development needs at the end of the twentieth century.
Given the world's rapid rate of industrialization and technological advancement, we are forced to come to grips with the fact that jobs are now less secure than they have been in the past. Over the long haul an employee generally cannot look to his or her employer for job security. However, the best way to increase the odds of being employed or staying employed is to know your talents, develop them, and be truly excellent in work habits.

The Council of Ministers of the Economic Cooperation Organization (ECO) at its 14th meeting on September 12 approved grant of ECO Excellence Awards 2004 to some nationals of the ECO member states. The awards were given to the winners during the 8th ECO Summit Meeting on September 14, 2004 in Dushanbe, Tajikistan.
According to the modalities approved by the ECO Council of Ministers, the awards were given in the fields of economics; history, culture, literature and fine arts; science and technology; education, and agriculture and environment.
Dr. Ahmad Reza Jalali-Naini from Iran received the award in the field of economics.
He holds a Ph.D in Economics from the University of Kent, Canterbury, UK and a post doctorate degree from the University of New York.
Jalali-Naini is director of Center for Monetary Policy of Iran and senior adviser and director of financial and energy markets department, International Institute for Energy Studies, Tehran.
He served as chairman of the Department of Economics at the Institute for Studies in Management and Planning from the year 2000 to April 2004.
The former University of Tehran professor has also served on various other senior positions and written several research papers and books in the field of economics.
Excerpts of his interview with the Persian daily Sharq follows:

Research conditions have improved with the establishment of data banks.

What made the ECO confer its top economic award on you?
Well, I was awarded, perhaps, because of my research works. I have done little as far as executive activities go, but have conducted extensive research work and written several papers. I think they took all aspects of my research career into account before granting me the Excellence Award 2004.
The ECO award includes a plaque of honor and a small cash reward. The organization is a ceremonial body with poor influence over political and economic developments and is a union for economic cooperation with a limited budget.
But because the world is moving towards regional and international convergence, it is important for Iran and other regional countries to be able to meet in the Economic Cooperation Organization.
My answer to the question whether the ECO has managed to improve economic cooperation in the region is that it has helped facilitate interaction to some extent. One can easily conclude from statistics that the ECO member-states do not have high trade interaction with each other.
I think the organization could help boost economic cooperation and investments, especially in the transit sector. But as a regional organization it lacks the required authority (to make great changes). Its present potentials have not been utilized properly either.

There are many talented students in Iran who can undertake graduate and postgraduate studies to the highest levels.

As a senior academic figure, where do you think economic education stands within the higher education system in Iran?
I believe there are many talented students in Iran who can undertake graduate and postgraduate studies to the highest levels. Some of these students are very much interested in learning but, unfortunately, lack motivation.
Modern economics is gradually introduced at Iranian academic centers as traditional economic thinking is being forgotten.
I am personally of the opinion that we do need to improve the quality of higher education. Greater financial investments could help the higher education system acquire more knowledgeable professors and prepare the ground for their research activities.
It is also important for the national education system to create a competitive atmosphere for university professors in order to encourage them to work harder in research and scientific areas.
Research conditions have improved with the establishment of data banks. But the main point remains to be that specialists should be assigned to executive jobs.

Why do you think most economic officials in Iran do not specialize in the subject?
Unfortunately, Iranian policy-makers do not pay due attention to expert-level activities. Because Iran does not have scientific unions, Iranians cannot differentiate between officials with high expertise and ordinary officials.
In decision-making processes too, expert-level studies are largely overlooked, which causes heavy damage to the national economy at the end of the day.
Needless to say, precise expert work should be done prior to making major economic decisions. This will help translate academic ideas into executive policies.
For instance, results of expert studies are not effectively used in the decision-making processes as far as major economic issues such as bank profit rates, energy prices, etc., are concerned. Hence, if we do not use results of research studies, there will be no need for research groups at all.
In other countries, research works are valued because they set the ground for economic and social decisions.

Do economic officials seek assistance from senior experts in formulating development plans?
Well, I was involved in the process of formulating the third plan (2000-2005). My job was not of executive nature and I was engaged in research activities. I was a member of specialized committees in charge of establishing the monetary, credit and foreign exchange policies that would suit Iran's economic situation.
But I was not invited to contribute when the formulation of the fourth development plan (2005-2010) was underway. I have no idea to what extent they used expert views in devising the fourth plan.
Another point that I want to mention here is that it is important to see how much the results of expert studies are used in decisions made by senior economic bodies.
There are certain considerations that affect macroeconomic decisions and, sometimes, lead to the removal from the scene of expert and research activities.