How Could Blockchain Technology Solve Labor Market Problems?

The American Council on Education (ACE) believe that blockchain technology can help individuals to have control over their credentials and better equip them in an increasingly insecure global labor market.

June 8 2020 | AtoZ Markets It can no longer be denied that in the modern world, we are steadily dependent on technology. Everything changes – how we live, think, or see the world.

Yet what is generally less well understood is that blockchain is not just a fast way to make a lot of money for Bitcoin investors. In fact, although it’s not yet living up to its potential, this technology is expected to have a direct impact on the labor market. First, what’s the exact meaning of the mysterious term?

What is blockchain technology?

Basically, blockchain technology creates a decentralized and secure registry that gives users a way of validating information involved in a particular transaction. It speeds up processes and takes out the middlemen, making the process safer, more transparent, and more efficient.

Unlocking education with blockchain

A report from the ACE has shown how blockchain technology can help individuals in an increasingly insecure global labor market. Sponsored by the United States Department of Education, the report was published on June 8, drawing its conclusions based upon research conducted from November 2019 through February 2020.

Before the novel coronavirus pandemic, its authors note that as of December 2019, data from the Federal Reserve indicated that four in 10 recent college graduates were underemployed and that the average time spent in a job had dwindled to an average of 4.2 years.

In these difficult conditions for labor, the authors argue that what could help graduates and the workforce would be more control over the multiple credentials they need to keep track of as they move through ever more dynamic and unpredictable employment.

“Blockchain technology, in particular,” they write, holds the promise of creating “more efficient, durable connections between education and work. Blockchain’s unique attributes of a tamper proof, shared ledger could optimize human capital and promote competitiveness and social mobility.”

The report’s authors use the term “human capital data” to refer to individuals’ academic and work history, which is then reflected in their credentials and allows them to “conduct transactions” with various “education, employer, and workforce stakeholders.”

Read also: Will Blockchain Interoperability be the Key to Successful Projects?

How blockchain technology cures labor market woes?

At the moment, the report argues, historical conventions, policies, and technologies are limiting individuals’ control and access over their human capital data, meaning they “lack agency” over their own records.

Combining self-sovereign identity-related standards with blockchain-based CVs and portfolios is one way of providing “various stakeholders” — i.e. college registrars, hiring managers, students, and workers — with a reliable and real-time record of individuals’ knowledge and skills.

The report’s authors identify three major themes from their research that reflect the opportunities they see in using “DLT to advance social equity.”

These are “personal data agency, lifelong learning, and the power of connected ecosystems.”

As per the report, there are 71 efforts internationally that are currently looking into using blockchain technologies in education. Many of these remain at the proof-of-concept or pilot stages of testing.

Read also: World Economic Forum Looks to Deploy Blockchain in Real World

The authors sum up their research into the field by arguing that given the “speed and granularity” which is needed by individuals in order to document, verify, and share their “human capital information,” a “sustainable, transparent and auditable” technology such as blockchain may be a “determining factor” that can “supercharge” their “competitive advantage” in the global economy.

As well as being flexible and adaptable in real-time, blockchain can, crucially, provide for individualized ownership of one’s data. The report’s authors view this as imperative, especially for “vulnerable populations”:

“As a society and economy, we must […] support improved opportunity to learn for all, preserve evidence of all quality learning, ensure equitable use of learning data, and empower learners and workers to use their data to pursue a prosperous life and promote economic growth. In the consensus-driven spirit of blockchain, we can achieve these aspirations together.”

From the foregoing,  it is very likely that blockchain technology will radically change the rules of the game. So the real question is not if, but when?

What do you think about ACE’s report on blockchain technology? Share your thoughts in the comments below! 

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