The uncertainty of the future of work naturally raises a number of questions. It is no wonder Argentina put it on the agenda as one of three priorities to be discussed at the G20 summit in Buenos Aires. Will its impact be the same across the globe? What jobs will be most affected? What new skillsets will be required? But above all, how can governments prepare and what role can Multilateral Development Banks play?
All four leading regional development banks recently came together in Washington to present some key perspectives regarding the jobs of the future, which can be found in the study The Future of Work: Regional Perspectives. Here are a few worth considering:
On the one hand, Emerging Europe, Developing Asia, Africa, and Latin America and the Caribbean are witnessing how robotics, automation, and artificial intelligence are lowering costs and increasing productivity, providing an opportunity for accelerated growth. Countries like Estonia have taken the lead in digital technology, youth in Nigeria and Ethiopia are harnessing technology to boost yields in agriculture, in Vietnam and Bangladesh Information and Communication Technologies (ICT) is boosting the service industry and across Latin America and the Caribbean smartphone adoption is expected to reach beyond 70% by 2020.
On the other hand, as a result of this new wave of technological advances—known as the Fourth Industrial Revolution—, a series of myths emerge that it is important to clarify:
Myth #1: All regions will be impacted in the same way.
The truth is that technology will be adopted at varying speeds, depending on the region’s economic development and demographic trends. An aging population in Emerging Europe will face different challenges than Africa where 12 to 15 million young people enter the job market each year.
Myth #2 Mass unemployment is unavoidable.
The truth is that the jobless rate will be lower than originally expected. Mass unemployment is unlikely to become a reality. But the shifts in job opportunities will certainly require flexibility and access to new training tools, which may in turn be provided by technology itself.
Myth #3 Automation will replace all human jobs and tasks.
The truth is that automation only takes place where it is both technically and economically feasible. A human workforce will still be required in most sectors, particularly those such as health and education.
At the same time, it would be foolish to ignore the genuine threats of unemployment and increased income inequality that the rapid expansion of new technology will generate.
Above all, as Multilateral Development Banks, the question we need to be asking is how can governments ease the transition? What can governments do to ensure that the largest number of people possible benefit from this transition?
A new role for governments and MDBs
Policymakers can take four actions to ease the adoption of technology while mitigating potentially adverse effects on jobs and incomes.
- Assist workers by investing in education to bridge the skills gap so that employers have access to a workforce with the skills they need.
- Prepare workers for the jobs of the future by ensuring they stay ahead of machines and providing them with life-long training opportunities that will allow them to adapt to an ever-changing job market.
- Provide safety nets by strengthening social protection, healthcare and pensions and including informal workers and those in the “sharing economy.”
- Design and implement better tax and income redistribution policies. These can include taxes on robots or tools such as the universal basic income.
Multilateral Development Banks certainly have their own role to play, not only by acting as think tanks for initiatives on how to capitalize on new technologies and mitigate their negative effects, but also in coordinating global or regional policy responses, strengthening partnerships between policymakers and employers to jointly identify and address challenges.
Our products and services will need to adapt. A recent IDB health project in the Dominican Republic which uses drones to link remote rural clinics with hospital laboratories is a prime example of this. Change will also take place within our workforce. Outsourcing the IDB’s human resources department from Washington to Costa Rica to ensure efficiency and reduce costs was certainly a step in the right direction.
It is important that we take the time to seriously identify the opportunities and risks the 21st century global job market presents so that together we can help shape the future of work. In the meantime, we must also remain relevant for our customer base and at the forefront of innovation.
Whether we succeed or not is up to all of us.