By Dr. Dambisa Moyo
At a time of rapid technological advancements and
innovation, what impact might these trends have for global
growth?
In particular, can technology help boost economic
growth across the developing world – home to 90 percent of
the world’s population – as a period of unprecedented
economic expansion begins to slow in some places and
regress in others?
On the one hand, technological shifts hold promise to
meaningfully, and positively, transform livelihoods by
enhancing the efficiency and ease of information transfer,
connectivity and communication.
Already there are measureable improvements in healthcare
access in parts of Asia and Africa, where households are
now able to receive text messages and other mobile based
notifications as to when doctors and healthcare workers will
be visiting their neighborhoods or vicinity. Also in the realm
of social development, there is notable evidence that
technological advances are breaking down traditional
hurdles to education access; not only increasing the sheer
quantity of those that have access to education, but also,
without relying on a single teacher, improving the quality of
education available to many millions of people.
Mobile phone penetration will continue to play an
immeasurable role, even in regions that have traditionally
been viewed as laggards in the adoption of new trends.
Today, roughly 82 percent of Asians (excluding India and
China) and 55 percent of Africans have a mobile phone.
Using mobile telephony, subsistence farmers, particularly in
remote areas, are able to collect and compare the market
prices they can earn for their goods and services without
having to transport their wares between towns in search of
the best price. Aside from mitigating risk, farmers are
afforded more transparent and real-time information that
better help them manage their investments and, over time,
improve their incomes. These trends point to a large
potential to improve productivity and, concomitantly, global
growth; whether through innovations in agriculture,
processing, health care, industry, or simply how business is
done.
Yet, despite these unambiguous “wins”, there remain
legitimate concerns on the net effects of technological
advances – particularly in respect to whether and how
automation will disrupt and erode (low skilled) jobs – the
hallmark of emerging markets.
The British economist John Maynard Keynes famously
predicted a 15-hour workweek by 2030 due to the
combination of seven-fold economic growth and “technical
improvements”. Today, just 15 years from his target date for
the three-hour workday, technological innovations continue
to increase productivity – but increasingly without the need
for human workers. Advances in robotics and artificial
intelligence have made it possible for blue collar and
unskilled jobs to be filled by robots, which are incapable of
“human error”, never tire and operate at a fraction of the
cost of human labor. A recent Oxford University study
suggests that 47 percent of jobs in the United States alone
could become automated in less than twenty years.
Across the developing world, where populations are skewed
to the young, and where, on average, 70 percent of the
population is less than 25 years old – this prospect is
particularly disconcerting. The ILO reports that there are
over 85 million young who are unemployed, many of them
with no discernable education or skills, and thus the most
vulnerable to the technological shifts that are already afoot.
For every gadget that enables us to process data and
information faster and more cheaply, there is a burgeoning
social and public policy challenge of rising unemployment
that has dire consequences for growth. Those lower on the
skill ladder will have more limited job opportunities, and
will only be employable at lower wages, contributing to a
widening income gap between poor and rich economies; but
also a worsening income gap within countries between those
who have capital for investment (where returns are higher)
and those who can only supply labor.
The management of, transition to, and adoption of, the
digital age will no doubt contribute to technological
unemployment as the private sector becomes less of an
engine of job creation. The onus therefore, will increasingly,
although not exclusively, fall on governments to pick up the
slack, and find new uses for labor. After all, by operating at
the frontier of innovation and global trends, the private
sector will continue to contribute to the creation of new
industries and opportunities that should offer employment
and support entrepreneurs in the 21st century tech-based
economies.
Ultimately, it is incumbent on public policy to manage and
anticipate the technological transformations that could
markedly improve the prospects and path of human
progress; but could also prove so disruptive as to worsen
the living standards across the world and create widespread
greater political and social instability across the globe. Source : Drucker Forum
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About the author:
Dr. Dambisa Moyo is a global economist and best-selling
author who serves on the board of directors of Barclays PLC,
SABMiller and Barrick Gold.
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