The Digital Factory is Next to Us

Do-ha Kim, Communications Committee Member

Translated by Michelle Jang

Reviewed by Joe DiGangi

Korea Institute of Labor Safety and Health

The term, ‘4th Industrial Revolution,’ is no longer unfamiliar. Big tech companies that lead the global market economy, such as Facebook, Amazon, Google, Microsoft, and Apple, are competing with each other to introduce their new technologies. Looking at technologies such as AI, metaverse, autonomous driving, and augmented reality (AR) that have permeated our daily lives, we can sense that the era of digital capitalism has arrived.

Discussions about labor in the era of digital capitalism are largely divided into two categories: 1) A perspective that focuses on the positive aspects, such as how labor convenience has increased as digital technology overcomes limitations of time and space, how individual creativity has increased, and how it has become a medium for smooth communication; and 2) A concern that digital technology will cause the ‘end of factories’ and the ‘end of manual labor,’ and replace or reduce human jobs.

However, it is important to discuss another aspect of labor in the era of digital capitalism which is different from the two perspectives above. Some people talk about creative labor, and others about the disappearance of jobs, but digital technology has paradoxically brought about the explosion and proliferation of a new type of ‘digital factory.’ There are not only a few programmers and planners, but also workers in digital factories such as Google’s subcontractors, Amazon’s warehouse workers, Facebook’s content managers, and Berlin’s crowd workers. These ‘digital factories’ are largely the same as the way factories have worked in the past, and much of the labor that goes on there is invisible.

Factories of the digital world, similar yet different from industrial era factories

In his book, ‘The Digital Factory,’ Moritz Altenried defines a digital factory as a real or virtual space that controls and subsumes labor through digital technology. Traditional factories were physical, tangible spaces made up of concrete and numerous machines, and workers gathered in such spaces to provide labor. On the other hand, in the ‘digital factory,’ there may or may not be a physical factory as a space where labor is gathered. English-speaking Filipino and Indian workers are often mobilized from their home countries to manage the content of global big tech companies, and wherever there is internet access, these workplaces become places for workers who promote corporate products through blogs and social media.

However, there are many similarities between digital factories and traditional factories. Workers in digital factories also perform repetitive and boring tasks that are standardized and compartmentalized. Algorithms and digital technologies reduce worker training time, further fragment tasks, and accelerate deskilling. Google hired subcontractors to perform simple, repetitive tasks to scan books, and Tesla hired workers to perform digital labeling tasks to implement autonomous driving technology. Tesla is even suspected of laying off a large portion of its existing workforce in order to complete these tasks with lower-wage workers. As in traditional factories, workers who perform these tasks are given quotas.

Capital’s desire to regulate and control labor remains the same in the era of digital capitalism. However, while control was carried out in a visible manner in traditional factories, it is carried out in a more subtle and invisible manner in the era of digital capitalism. In traditional factories, controlling human labor required another labor force, and whether you like it or not, factory work was ‘passive’ and ‘stable (in terms of having a basic salary), which itself was a means of controlling labor. However, most platform workers sign a contract for subcontracting rather than an employment contract with a fixed basic salary. In subcontracting, labor is seemingly provided voluntarily and actively, but the speed and intensity of labor are directly linked to wages, which can replace direct control over labor in the form of wage. In addition, this system controls all workers by using algorithms known only to the company to provide better quality work to the ‘good workers’ they select. By hiding control in this way, capital tries to avoid many of its responsibilities, such as labor relations laws.

Digital technology is also used to blatantly control workers. In large logistics centers, everything is computerized. Managers can track and manage workers’ workload, current location, and work performance in real time. Although it is decorated with cutting-edge technology, it is ultimately nothing more than a ‘digital’ veneer on traditional labor management methods.

Korean digital factory workers

There are also digital factory workers in South Korea. ‘Content moderators’ are those who block and delete harmful or illegal content on content platforms. Many domestic companies, such as Kakao, Nate, and AfreecaTV, directly or indirectly employ content moderators. They monitor articles, comments, videos etc. in real time posted by users on portal sites, video platforms, etc. and take measures such as deleting posts that do not meet the standards according to the manual, and impose sanctions such as warnings and suspensions on users. These measures are carried out 24 hours a day. In actual factories, there are times when the machines do not operate, but the digital factories where content moderators work are constantly running.

The companies that run the sites sometimes hire them directly, but most of them handle the work through subcontractors. This shows that even in the era of digital capitalism there are still problems with irregular workers. Sometimes, it is easy to avoid labor laws by working under a subcontract rather than a labor contract. In South Korea, there was a significant lower court ruling that recognized content moderators who work from home as workers in the ‘Natepan Monitoring Agent’ unfair dismissal case (2021Guhap72352).

For delivery riders, all roads are factories

The most common platform workers in South Korea are delivery riders. On the surface, riders appear to provide labor ‘voluntarily,’ but the reality is different. The company generates and manages riders’ location information, real-time travel distance, delivery time, and delivery records, and trains an algorithm, which is then used to assign orders to riders. However, this assignment algorithm is not disclosed at all, so riders do not know how the dispatch algorithm is designed or in what cases they are penalized. They have no choice but to blindly do whatever the platform tells them to do. In addition, the company cleverly controls the time zones and regions where riders work through ‘promotions’ that set goals and provide additional rewards to riders who achieve them.

In the end, they are controlled, managed, and subordinated in the process of performing their work, just like other workers. The difference is that the control is through digital technology, and the control and subordination are carried out secretly without being revealed. Former Chairman of the Riders Union, Park Jeong-hoon, said, “For riders, all roads are factories,” which is a good analogy for the essence of the digital factory.

For the second year in a row, delivery platform companies have been ranked as the number one source of workers’ compensation claims. This shows that it is time to develop labor safety policies not only for occupational injuries and illnesses in the construction and manufacturing industries, but also for the new labor environment in the era of digital capitalism.

Logistics Center, a digital factory mixing digital and pre-modern controls

There are Amazon logistics centers in the US and Coupang logistics centers in South Korea. Coupang claims to be a logistics company, but it is basically an IT company. Everything in their logistics centers is digitized and processed by computer systems and algorithms. Everything includes workers and the way they are managed.

The ‘picking’ task is a clear example of labor control based on algorithms. The workers, who collect and package products ordered by customers from among the displayed products, are given a personal digital assistant (PDA) and a basket to put the products in. The PDA screen shows the location, photos, and number of items to be picked up. The algorithm suggests the optimal route, and they pick the items in the order suggested by the algorithm. Even if the workers think there is a better route than the order suggested by the algorithm, they cannot perform the task based on their own judgment. They must simply follow the route suggested by the algorithm.

Workers are monitored by Units Per Hour (UPH), which measures the speed of work per hour. If work slows down, they are interviewed by a manager or are urged to do so via broadcast. In the past, one manager managed dozens of workers, but with digital technology, one manager can manage the work processes of hundreds or thousands of workers.

In addition, the extensive use of blacklists by Market Kurly, Coupang, and others dramatically illustrates that logistics centers are ‘digital factories’ where digital and traditional controls are mixed.

For labor rights in the era of digital capitalism

As we enter the era of digital capitalism, the industrial structure and workplaces have changed, but the factories that support capitalism are still intact. The problems of irregular employment, discrimination in the workplace, worker surveillance, and health issues are still the same, and new problems of the era have just emerged.

Behind every innovation, there is a lot of invisible labor. In the era of digital capitalism, the rights of workers working in digital factories need to be rewritten, and new laws are needed to properly protect them.