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.
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.
7 thoughts on “Will Technology Support Global Growth?
by Dambisa Moyo”
Governing implies planning and this article really reminds the leaders in the rest of the world to clearly envision the future for their nationals!
And world leaders also need to keep some island of refuge in case of total destruction or disaffection of most the lands in the Western World.
While doing it not leaving the rest of the World so far behind in terms of infrastructure, but thinking about a clean green infrastructure and industrialization that will give our children a place where they also can take refuge in their time of trouble.
I’m nigerian whose role model is Dambisa Moyo..
Dr. Dambisa Moyo, Precisely. There is no motivation in the stock ownership class to create even distribution of resources. To compound the issue, googol-illions of resources are being squandered at a time when an intelligent specie would be conserving petro-equity. At least we will make for an interesting layer of rocks even if we can not muster the courage to name it until after we are gone… The Anthropocene!
Hello!! Dr. Dambisa , Definitely you’re right about all this, almost all Asians countries benefited from the breakthrough of tech in any other nations for developing their counties, by installing industrials manufactures to speed up growth to their people also fixing their infrastructures. African countries are not benefited from the tech as much at all, comparatives to other nations. We still never build a roads, dams or small mechanical agriculture since Adam and Eve, only in a few spots. We should follow Asian style that’s the only way Africa will develop 1st stop wars, work in the infrastructures definitely and automatically we will see growth across Africa and spread culture of integrated economy between states with in Africa. I don’t think tech help us much as long we don’t know how to use well.
Thanks
Thank you for this.
Your holistic approach too these issues is so refreshing and somewhat vindicating to me.
Sure, technology, if adapted to our African civilization, will certainly accelerate sustainable development and change lifestyles. Currently, I work 200 meters from my house in Nairobi and my 2 employees all live within 500 meters from the office. This saves us 5 hours each in commuting, enables extension of working hours to meet deadlines and, very importantly, our children come in and out of the office and we are fully aware of what is happening in our homes.
On the threat of automation-driven unemployment, even of the unskilled, my observations, current and future, are more hopeful.
I remember Kenyan Pres. Moi on the early 90’s, who, fearing that word processors would cause unemployment among typists, went about banning them. The move was overtaken by events and, in retrospect, I have yet to hear of a secretary or typist retrenched on that account… instead, they all upgraded into office assistants, documentation specialists and so on. That jolt kicked others further up, acquiring business administration degrees on and off-line. The more laid-back ones simply oozed into the information age along with everyone else. Secretarial colleges transformed into computer colleges, mainly MS Office and auxiliaries such as Sage and AutoCAD. Even my Mum, a retired primary school teacher who turns 80 next year, sends texts messages to her children on 3 continents.
Though the mechanisms of the typists-office assistant metamorphosis are not clear, it seems that the erosion of low-tech jobs would be more than compensated by news created by online activities such as transactions and communications which have the ability to avail the rarer skills to a wider consumer base.
On Bomakazi, a self-replicating agro-based shelter program on the design table for the past 2 years, despite limiting the bottom wage to US $ 15 daily, 16 m self-servicing mortgage homesteads and 47 m sustainable, upgradeable jobs will still be created in Kenya in 40 years. It gets to the point where job creation is higher than available labor and, with spill-over into the rest of Africa, labor import options dim.
Therefore, the low-tech jobs become a burden on society and automation is required to, say, pick ripe tomatoes of groom organic milk goats in a domestic setting.
The scenario is still unfolding, so let’s shepherd it and see what happens in Africa.
Thank you. Two comments:
1.
Good question: Are African countries with their young population more vulnerable to the annihilation of jobs through ongoing digitalization?
I am not so sure. Western countries have built up sophisticated social-welfare and pension schemes relying on traditional jobs. A complete system change will be much more difficult to be done than in “lean” countries (Dayo Olopade) with less institutionalized vested interests and higher growth rates.
On individual level, I unemployed 40y or 50y old people are not better off than young ones. The younger the higher the capacity to adapt to new technologies. Additionally, a much bigger informal sector in lean countries helps a lot. (Ironically, in Europe we are trying to crush the informal sector completely!)
2.
I doubt that public policy alone has the capacity to anticipate the technological transformation to the extent that “smart regulations” will bring benefits to the broader public. I rather think we need multiple starting points. One important one seems to me the “operating system” of organizations, specifically in the private sector. I see a huge “lever” in that, as I have pointed out a couple of days ago here in my blogpost A quest for a Europeans humanistic management movement.
While doing the work not leaving the rest of the World so far behind when it comes to infrastructure, but planning on a clean green infrastructure and industrialization that may give our children a place where they may also take refuge of their time of difficulties.
Reply.