Connections Transport & ICT Will the Digital Revolution Help or 103148 Hurt Employment? Adaptation a Key to Realizing Job Gains Siddhartha Raja and Mavis Ampah What will technological change deliver in the coming decades? Higher unemployment? Or a wealth of new job opportunities? And what can we do to determine the outcome? Technological change in any given society is never smooth and always negotiated. Although both perils and opportunities await, the ultimate result depends on our choices today. 600 million Governments, businesses, and individuals have shown that adapting to changing circumstances can alter the consequences of apparently “inevitable” changes. And developing countries can be profoundly affected by The estimated global number of new changes seemingly limited to the advanced economies; jobs required by 2030 for the global they must adapt to what is actually a global employment rate to keep pace with technological playing field. The World Bank’s recently population growth issued World Development Report 2016: Digital Dividends focuses on strengthening the “analog complements” of the digital economy, including adapting skills to get the most out of the digital revolution (See Connections Note 2016-1). Countries whose governments can facilitate innovation, strengthen education and skill building, and build up the social safety net may be the most likely to benefit from the coming changes. If one is to believe some of the technology news portant but commonly overlooked considerations nowadays, the robots are coming to take our jobs, about technological change and work. and there is little we can do about it. In this narra- tive, the future of work seems to be a shrinking pie The Erratic Course of Technological and part of a deepening in economic inequality. Change But other news says that smart digital tools and The adoption of technological innovations is typi- machines are already helping to create tremendous cally erratic. Many dismissed the mobile telephone opportunity. For example, more than 10 million in the 1980s as a mere luxury or toy; today it is an people—many from the developing world—are important part of life for more than half the world’s working online, often for hourly rates well above population. That development contrasts with the the average in their home countries. And smarter evolution of electric cars, which Thomas Edison and cheaper machines will allow us all to do more was designing as early as 1903 but are only now satisfying and productive work. emerging as a commercial reality. And many tech- Can we reconcile these two visions of the future nologies end up working in ways that their inven- and maximize benefits? Doing so depends on add- tors never considered because technology must ing to these starkly competing narratives three im- mix with social, political, and economic realities—as reflected in the intense ongoing debates about the future of the Internet. FEBRUARY 2016 NOTE 2016 - 2 In sum, technology does not just appear in our in China and possibly less investment in Africa and lives. It is invented, modified, sold, and bought. other emerging markets. And so it is with robots, driverless cars, and arti- ficial intelligence; rather than being preordained, India and China alone will have about a half billion their appearance in our lives will be the outcome young people joining the work force in the next 15 of interactions across a society’s culture, politics, years, and 11 million young Africans are expected and business. Governments, firms, and individuals to join the labor market every year for the next will need to make choices that will determine how decade. If they cannot find work, their frustrations technology will affect employment rates and other could undermine national and regional stability deep social challenges, even if the path and the and undo decades of progress in reducing poverty. outcome are unpredictable. Sustainable development will require investments in technology, in line with the UN Sustainable De- velopment Goals, especially 8 and 9c. Not doing so Technological Change Is A Creature of would perpetuate existing digital divides and be a Decisions missed opportunity to address inequality. Policy and action must focus on how government, business, and individuals will use technology rather A Better Narrative than on technological change as an autonomous For global employment rates merely to remain force. About 125 million children around the world stable as population grows between now and will become of school-going age this year. They will 2030, the world economy will need to create some need new skills to create, manipulate, and use new 600 million new jobs in the next 15 years—most of and emerging technologies if they are to be com- them in Asia and sub-Saharan Africa, according to petitive and obtain good jobs. Reforming educa- the World Bank’s 2013 World Development Report. tion and investing in skills will be critical. Governments need to act now, in partnership with the private sector, to invest more in skills, in im- Businesses’ adaptability to new technology is proving business environments, and in strengthen- equally critical. Companies that have evolved, ing the social safety net to protect the vulnerable. such as IBM (now known more for services than machines) and Apple (better known today for its Smart technologies will create new opportunities smart phones and watches than for its computers), for prosperity. Rather than being wary of automa- have survived and thrived. Just like their workers, tion or robots—or waiting for chance—we should these companies had to learn and evolve. And new make strategic choices today. If policy does not companies have tremendous potential to expand prepare now, the risks to sustained and shared and create opportunity: eBay, Uber, and Upwork prosperity will only increase. (an online work platform) have created economic opportunities for many people worldwide. Giving these businesses the climate and support to grow, For more information on this topic: or the ability to fail in an orderly fashion, will make Jobs, technology, and disruptive change a difference. http://blogs.worldbank.org/ic4d/jobs-technology-and- disruptive-change No One Is Immune Older workers need lifetime skills development http://blogs.worldbank.org/jobs/older-workers-need-lifetime- Ongoing debates are overlooking how technologi- skills-development cal change will affect developing countries, and Improve computer skills to improve job prospects http://blogs.worldbank.org/jobs/improve-computer-skills- especially the poor in those countries. Globaliza- improve-job-prospects tion means that decisions to invest in technology Are We Heading Towards a Jobless Future? in advanced economies will affect opportunities in https://blogs.worldbank.org/ic4d/are-we-heading-towards- the developing world. For example, if robots take jobless-future over more of manufacturing in high-income coun- World Bank, World Development Report 2016: Digital Dividends tries, it could mean less demand for assembly work http://www.worldbank.org/en/publication/wdr2016 Connections is a weekly series of knowledge notes from the World Bank Group’s Transport & Information and Communication Technology (ICT) Global Practice. Covering projects, experiences, and front-line developments, the series is produced by Nancy Vandycke and Shokraneh Minovi. The notes are available at http://www.worldbank.org/transport/connections. FEBRUARY 2016 NOTE 2016 - 2