Archived website

This online community was active in conjunction with the Digital Agenda Assembly 2012 and is now archived and available for institutional memory. You can now join the discussion at https://ec.europa.eu/digital-agenda/en/community

How could investment in Cloud help creating jobs and fight unemployment?

aserocarmela's picture
Submitted by aserocarmela on Tue, 2012-06-12 17:29

Many analysts agree in affirming that Cloud computing will generate a large amount of new jobs in the next few years.

http://cloudtimes.org/2012/03/16/cloud-computing-to-create-more-jobs-aro...

How you think Cloud technology could help in creating new jobs in Europe? What actions are required to establish a favorable environment to jobs growth and unemployment reduction in Europe?
Help us with by sharing your comments and evidences/inspiring examples you know.

Group audience: 
Interesting!
2 users have voted.

Comments

Engberg's picture
Submitted by Engberg on Wed, 2012-06-13 00:28

This is the typical hype. Cloud itself will not generate jobs - on the contrary.

When we get security right, it will make ICT centers more effective and thus operate with fewer staff.

Application people will need training, but it is unclear as to impact on jobs.

The open question is the negative impact as to lock-in and dependency on a few cloud providers.

We need value creation to generate jobs.

In my view, the European way would be to focus on people and empowerment - that will drive a different approach to ICT both generating new services/solutions and disarming the US people profilers and thus strenghtening European companies and markets.

Interesting!
1 user has voted.

danielsteeves's picture
Submitted by danielsteeves on Sat, 2012-06-16 16:12

Could not agree more with the previous comment: I keep reading about 14 BILLION jobs that cloud will create but, even if that number were anything approaching reality, the fact is that we are not talking a net-net situation.

Some jobs will be automated and require less human involvement, other jobs may be obsoleted, new IT admin roles may arise but many will simply shift, with an education or re-education requirement involved (think Cobol!)

I also have a blog entry responding to one of the 'clouds as panacea' discussions which focused on jobs - you can find it here:
http://danielsteeves.wordpress.com/2012/05/08/im-not-convinced-cloud-com...

Interesting!
0 users have voted.

aserocarmela's picture
Submitted by aserocarmela on Sun, 2012-06-17 00:14

The questions is asked out of current figures circulated around. Perfectly aware, especially after some research done online, that such numbers all come from studies funded by major players, especially Microsoft. So, let's take the numbers on millions of jobs created by Cloud by year X with a pinch of salt, nevertheless the question remains key and, as presented in this forum, requires your view on whether cloud adoption may have some positive (and/or negative consequences on jobs creation) and we expect very creative and analytical thinking from you on this topic.

Interesting!
1 user has voted.

conder's picture
Submitted by conder on Sun, 2012-06-17 20:58

I wouldn't like to say how many jobs it will create, but I am sure it will create many. The potential for small businesses, new startups and modernising older small companies is tremendous. A simple thing like googledocs, just that could open a door leading to a new position for someone in a company. I agree, in the same way the telcos hammer down the dreams of altnets, microsoft will not want things like googledocs taking income from them. The open office and free software/opensource like that was out of reach of people on slow connections, they could never download it or keep up with the updates.
The main drawback to the cloud is the lack of connectivity still experienced with small businesses, mainly, but not all, in rural areas.
When the great day dawns that they have connections I think the choice will be the cloud, rather than anything else. It is so easy. It saves upgrading old computers. No updates. No hard disk space and processing power needed. It just makes sense. And the easier it is, the more it will get used, and new innovative uses found for it, and as companies get more efficient more staff will be employed. The scale of which we can't predict, it all depends on getting the connectivity needed to the cloud.
I don't know if that is creative and analytical, but its just what I think.

Interesting!
0 users have voted.

Engberg's picture
Submitted by Engberg on Mon, 2012-06-18 11:13

Cloud will cost jobs in ICT operations, but that is in itself good as we will free ressources for other work.

But don't make first-order-syndrome assumptions incorporating what we might use ICT for. It is like incorporating the value of a brakthrough ph.d. research to the electricity used to light his workplace.

Our challenge is to benefit from putting this human capital to work - INDEPENDANT OF CLOUD.

Interesting!
0 users have voted.

rebentisch's picture
Submitted by rebentisch on Mon, 2012-06-18 21:14

There was this event where they invited Enzensberger sho had written a book about clouds, and while he said he had no clue about cloud computing but he raised the issue of "raining data".

And then we find this contribution who takes the usual jargon about job creation seriously...

Interesting!
0 users have voted.

simonfj's picture
Submitted by simonfj on Tue, 2012-06-19 08:27

I'm with engberg on this one. The main effect of the new architecture should be that fewer ICT jobs are required. The joke is that "clouds" are a network managers way of talking philosophically :)

I think it might be useful, rather than talking about a network architecture (because attendees of tis forum have no expertise in this field) is to talk in terms of "shared services". That being the case we might expect all publically funded services to become more efficient as they are forced, by lack of funds, to collaborate. So that should help soften the effects of working through the EU sovereign debt problem.

On the other side of this period we, through Engberg's suggested approach of focussing on people rather than technology, might expect to see the potential jobs. Just one hint on were they might come from. Google, Facebook, LinkedIN, etc are not ICT companies. They are MEDIA companies.

BTW. If any content people want a cloud to play with here's a freebie. http://www.terena.org/news/3140/fullstory

Interesting!
0 users have voted.

simonfj's picture
Submitted by simonfj on Tue, 2012-06-19 08:27

I'm with engberg on this one. The main effect of the new architecture should be that fewer ICT jobs are required. The joke is that "clouds" are a network managers way of talking philosophically :)

I think it might be useful, rather than talking about a network architecture (because attendees of tis forum have no expertise in this field) is to talk in terms of "shared services". That being the case we might expect all publically funded services to become more efficient as they are forced, by lack of funds, to collaborate. So that should help soften the effects of working through the EU sovereign debt problem.

On the other side of this period we, through Engberg's suggested approach of focussing on people rather than technology, might expect to see the potential jobs. Just one hint on were they might come from. Google, Facebook, LinkedIN, etc are not ICT companies. They are MEDIA companies.

BTW. If any content people want a cloud to play with here's a freebie. http://www.terena.org/news/3140/fullstory

Interesting!
0 users have voted.

mark's picture
Submitted by mark on Wed, 2012-06-20 09:40

Thanks for generating this discussion. As a Microsoft representative, I’d just like to say that I understand the view that some economic studies about cloud and job creation may be taken with a grain of salt. That could be said of most if not all projections of future economic activity. We do not have enough hard data collected over time to offer solid proof of job creation in this specific area. But it is still worth pursuing the inquiries, looking at projections based on reasonable economic assumptions, exploring the factors that contribute to job creation, and seeking ways to achieve growth by exploiting the advantages that cloud computing clearly offers.

The more complete studies look at net job growth, recognizing that increased automation of some IT tasks will cause reduced demand for some IT jobs but increases in others and especially increases in other sectors. Jobs will flow from mostly from users of cloud services but also from creators of cloud services. The main studies that have been publicized have focused on projections of job growth by users of cloud services – looking at the aggregate potential impact of wide adoption of a general purpose technology that can lower costs of a significant industrial input and increase overall productivity.

There is historical experience with past technology adoption, productivity gains and job gains in order to at least form some assumptions for estimates in this new area. Potential jobs involving creators of cloud services is apparently harder to form assumptions about by extrapolating from past experiences. Among other factors, there have not been many such possibilities in the past to start up a business with so little capital investment that could very quickly scale to a wide clientele. In the absence of aggregate estimates, I have been trying to watch for actual evidence of individual businesses to understand if their experiences could be replicated by many businesses. We have tried to collect a number of case studies especially involving European startups and other SMEs exploiting the opportunities of cloud computing, some of which are at www.microsoft.eu. This is not yet in the form or quantity of data that could support any broad economic studies of job creation, but is useful nonetheless to verify that there is in fact some real businesses created or growing that support the theory.

I look forward to the day when studies can present verifiable evidence of job creation – but those studies will necessarily have to be backward looking, and for forward looking plans and investments we can work with the best estimates we can find. Those current estimates do indicate promising potential for job creation as a result of cloud computing.

Interesting!
0 users have voted.

Engberg's picture
Submitted by Engberg on Wed, 2012-06-20 11:34

Again - this is like the electricity company claiming the value of a ph.d. thesis wirting using light powered by them.

Of cause, cloud providers wants the technology appear as magic - it is not and you do not get to claim the value of any ICT projects just because it chose to run on cloud technology instead of some specific scalable model.

What MS could do was to enable some outside-cloud empowering security to compensate for the enherent lack of security in cloud. That would be truely value creating.

Interesting!
0 users have voted.

Submitted by Federico Etro on Wed, 2012-06-20 16:30

Gains from cloud

There is no doubt that it is quite difficult to estimate the economic impact of a new technology which is gradually spreading through the global economy. However, some academic work on the subject is available and it points out that important gains can be obtained in terms of contribution to growth and net job creation. In ongoing research with the colleague Andrea Colciago, I am trying to provide new estimates of the impact of cloud computing for the EU, the US and also some developing countries from Latin America (the research was asked and sponsored by the Economic Commission for Latin America, a branch of the United Nations). The numbers will be available soon, but I must anticipate that they are not too far from those of the study mentioned above.
What I would like to stress here, however, is that the reason why a general purpose technology as this one can have a substantial impact (and also one that is difficult to quantify) is that, the cost savings associated with it can generate deep consequences for all the (traditional) sectors where the technology is adopted. The most relevant benefit of cloud computing is associated with the shift of fixed capital expenditure in IT into operative costs depending on the size of demand and production. This contributes to reducing the barriers to entry especially for SMEs. The consequences on the structure of the markets will be wide in aggregate, with entry of new companies, a strengthening of competition, and an increase in average and total production. In a preliminary study (http://www.voxeu.org/index.php?q=node/4671), starting from conservative assumptions on the cost reduction process associated with the diffusion of cloud computing over five years, we estimated that the diffusion of cloud computing could provide a positive and substantial additional contribution to the annual growth rate (up to a few decimal points), helping to create about a million and a half new permanent jobs in the EU through the development of a few hundred thousand new SMEs. More research by economists (look also at the interesting Vox article “Migration to the cloud ecosystem: Ushering in a new generation of platform competition” by C. Fershtman and N. Gandal: http://www.voxeu.org/index.php?q=node/7867) is going on and can contribute to this debate.

Interesting!
0 users have voted.

Engberg's picture
Submitted by Engberg on Thu, 2012-06-21 02:07

Lets be careful not to fall for the first-order syndrome thinking again. Cloud is extreme hype.

Technology is great and no doubt cloud is an important contribution to both moving towards more flexible marginal cost based ICT operations and reduction in time-to-market - WHEN we get some security in place which, with present outlooks, are some years into the future as providers are still busy with some softtalk SLAs claims without substance.

In the meantime, I cannot help but noticing that most of the value in the VOX article can be associated with either operational substitution or the secondary use of data included as in Google Docs and "network effects".

To evaluate the impact on society, you need to substract the ICT operatins jobs lost elsewhere (more than created) and the damage of serious market distortions due to abuse of data in infrastructure.

You cannot reasonably calculate the value of organised theft by only using the value of the loot but not substracting the much bigger damage to the wictims.

What cloud people tend to keep secret is - unless we get som security in place - cloud will mean a massive shift in power from companies to infrastructure providers - they want to make money from their control of data.

Interesting!
0 users have voted.

Engberg's picture
Submitted by Engberg on Thu, 2012-06-21 02:12

Calculating the damage of Google to the market is not simple as you need to separate the good parts (many) from the bad parts (more but also more complex)

Start here (http://googleopoly.net/) but know that we are in need of raising some interesting questions that traditional economics havent addressed.

Interesting!
0 users have voted.

Submitted by Liebenau on Fri, 2012-06-22 15:33

Details of cloud economics. The work of a few people, such as Frederico Etro, is most revealing of the real effects of cloud upon the economy and should be taken to be very different from both the optimistic promotions and the pessimistic proclamations that populate much of the discussion. In my own research at the London School of Economics, my team and I separate out broad-brush long-term effects, such as those associated with cloud as a general purpose technology, from short-term effects that can be seen as a consequence of spending and investing behaviours, turn-over times for introducing practices such as these, and transition costs. We have done this at the level of industry sectors and sub-sectors in specific national contexts so as to take into consideration their real growth rates, local business practices, and likely effects upon spending and job content. We also take into account trade effects and job losses as well as gains both directly and indirectly. Our finding are that short-term net employment effects are positive (more jobs are being created than destroyed) but that the scale of that growth differs radically from sector to sector and from country to country. One output of this study can be seen at:
http://www2.lse.ac.uk/management/documents/LSE-Cloud-report.pdf

There one can also find comments on policy implications and practices associated with, for example, energy spending, security, skills effects and specifics about small businesses.

Interesting!
0 users have voted.

Submitted by Artesian Solutions on Thu, 2012-06-28 23:15

Cloud computing has revolutionised the delivery of IT services across the globe, and is now an essential part of modern businesses. The cloud not only enables organisations to access solutions on-demand and without having to put any IT infrastructure in place, but also ensures that businesses have the flexibility, speed and agility that are vital for sustainable growth. As the result of benefits like these, Gartner predicts that the cloud computing industry will be worth approximately £95.7 billion within the next few years.

As cloud continues to gain even greater traction with today’s businesses, it is inevitable that this new way of working will create jobs and stimulate growth. First of all, few organisations have the resources or expertise to manage cloud computing internally, and so we are likely to see a surge in demand for third-party providers that can manage the transition to cloud services in a way that delivers long-term value for shareholders, investors and acquirers alike.

Secondly, in our experience, this technology (and business model) provides a logical and compelling way to build and scale a fast-growing business. Cloud computing provides a number of very clear financial benefits, including the ability to spread costs over time, rather than up-front, and to pay-by-use. At the same time, efficiency is also improved with the cloud model, since updates and upgrades can be delivered remotely in a fraction of the time, at lower cost, and with much less disruption.

The combination of these two factors not only provides businesses with a much faster time to value, but it also frees up the time and resources they need to recruit and train more staff, safe in the knowledge that the scalability and flexibility that cloud provides will support their continued growth – easily, safely and cost-effectively. At Artesian, we have actually used this approach to create a silver lining on the austerity cloud, and have just doubled our headcount, grown our subscription revenue by 200%, and secured $3.5 million in funding as a result.

Andrew Yates, CEO at Artesian Solutions

Interesting!
0 users have voted.

Engberg's picture
Submitted by Engberg on Thu, 2012-07-05 10:39

Lots of marketing promises if the technologies are used wisely.

But how to make cloud sustainable? Look to the power shits. Europe cannot afford citizens, companies and public sector institutions made transparant. It has already undermined competitiveness to the edge of bankruptcy.

Interesting!
0 users have voted.

simona's picture
Submitted by simona on Mon, 2012-09-10 23:36

I believe countries that accept the importance of cloud in our future will achieve most.
For instance,look at Ireland.the strategy is to be one of the cloud leaders in Europe.
I am a student in cloud computing.courses were created to meet the demand of cloud experts in the near future.
In my view, Such swift and proactive response to expected demand is a sign of a strength.
I will be the one to answer the question if cloud will creare much employment after Christmas (my graduation).with such capabilities and speed of expansion I believe its a very successful investment.

Regards,
Cloud Computing Student

Interesting!
0 users have voted.

sandyreece's picture
Submitted by sandyreece on Wed, 2012-09-12 07:57

Maybe Cloud technology is the answer for the recent unemployment rate that the US experiencing right now. The one bright note in August's jobs report is that the joblessness rate has fallen a percentage point. However, that is likely the result of frustrated job-seekers abandoning the search. Source of article: <a href="https://personalmoneynetwork.com/payday-loans/">actual payday lenders online</a>

Interesting!
1 user has voted.

Engberg's picture
Submitted by Engberg on Wed, 2012-11-07 03:51

This is economic nonsense.

But new services will emerge as or if costs are reduced and security are designed to ensure control is NOT centralised with network effects and lock-ins massively distoring market processes. If these conditions are not ensure, cloud will have massive negative impact on jobs as european competitiveness will continue to erode.

Interesting!
0 users have voted.

People

competencesmarocaines.org's picture
fhardes's picture
fredriklinden's picture
keneastwood's picture
Nicholas Bentley's picture
JacintaArcadia's picture
Loankanassy's picture
Kasper Peters's picture
Kristijan Jakic's picture
lpujol's picture
Digital Agenda Assembly engagement
glqxz9283 sfy39587stf02 mnesdcuix8
glqxz9283 sfy39587stf03 mnesdcuix8
glqxz9283 sfy39587stf04 mnesdcuix8