At the risk of being cliche, say there is industry Widgetry that makes widgets. Now suppose that someone invents a technology that makes workers twice as productive (twice as many widgets per day per worker). Now, how does that industry take advantage of this? To save some time, I am simply going to assert that this requires at least some of the workers be fired. The dynamic of exactly how many workers depends on whether or not the business wants to sell more widgets by reducing the price, or just keep the extra profits, but either way the result is more or less the same.
Now, if that company simply keeps the extra profit, market forces might lead to other companies being formed that sells a similar item for less, taking advantage of the new technology, thus hiring some of the those same forces. However, again, I will assert that at least some percentage of that workforce must never work in that industry again, because otherwise there is no economic gain from the increased productivity.
There is a very serious problem here, because the rest of the economy is already balanced. There is in principle nowhere for these workers to go. Worse even is that they no longer demand as much due to their reduced income, which may lead to additional layoffs or wage reductions in other industries, making the employment opportunities even tighter. Those workers are simply forgotten by the economy, because they are obsolete for all practical purposes.
What is their only hope? I contend that the only thing that would prevent permanent unemployment is the development of an entirely new type of product that does not directly compete with the product they used to make. From a consumer's point of view, buying two of essentially the same thing is less useful than buying two completely different things. However, new product development is never guaranteed to follow advances in productivity.
