Summary of Training V: Digital Economy & Emerging Technologies – Ananya Singh

This was the fifth training session of the NetMission Academy 2020 and yesterday we’d amongst us Mr. Arthur Gwagwa (Senior Research Associate, Strathmore law school, Nairobi), Hon. Charles Mok (Hong Kong Legislative Councillor representing the Information Technology Functional Constituency), and Dr. Yik Chan Chin (Lecturer in Media and Communication, Xi’an Jiaotong-Liverpool University) as our Guests.

The training, following our conventional format, began with the working group’s presentation. The presentation briefly underlined what digital economy, gig economy, sharing economy, and platform economy meant while also outlining the functioning of IoT, AI, and Blockchain Technology. The working group also featured a case study on how AI and other emerging technologies would impact employment in the long run. While talking about the “future of work”, we presented statistical data to emphasize how automation may destroy human jobs. According to Frey and Osborne (2013), around 50% of jobs in the United States (between 30% and 40% in the United Kingdom) could be “held” by computers or algorithms within ten to twenty years. Similarly, the World Economic Forum 2018 predicted that by 2022, 50% of the companies anticipate some form of a reduction in their full-time workforce due to automation and the World Bank, in 2016, said that ⅔ jobs in developing countries are susceptible to automation. In the Asian Context, less developed Asian economies are at greater risk of seeing more jobs automated out of existence by AI than their richer peers, which have larger knowledge worker sectors that can be ‘augmented’ by AI and have greater resources to invest in reskilling affected workers. ADB (2019) analysis of a dozen Asian economies between 2005 and 2015 found that rising demand more than compensated for jobs lost to automation. The adoption of robotics and other connected systems stimulated higher productivity and economic growth, creating 134 million new jobs, compared with the 101 million lost to new technologies. AI will affect one in every five jobs in Asia, eliminating one in eight (MIT Technology Review Insights).

We also underlined that the following categories of people will be vulnerable:

  1. Low Skilled Workers (As per WDR, In many developing countries, the share of employment in high-skill occupations has increased from 2000 to 2015)
  2. Workers engaged in the informal economy
  3. Economies which rely majorly on low skilled workers
  4. Individuals with low education attainment. Some researchers show a correlation between lower educational attainment and automatability (e.g. PWC for the UK)
  5. Individuals without access to ICT

We also talked about the following anticipated trends:

  1. Emphasis on soft skills
  2. The rise of the “gig economy” workers and the evolution of the traditional workplace (MIT Technology Review)
  3. Importance of Lifelong learning
  4. Education and skilling at the forefront.
  5. Transformation in the nature of work, across domains.

We then underscored what measures could be taken to combat this situation of “technological unemployment”, some of which include but are not limited to investment in human capital, development of soft skills, and better social protection. In short, digital technologies are reshaping business models and firms’ organization, and making “soft skills”, such as information-processing, self-direction, problem-solving and communication, become more important.

We were then divided into 3 breakout groups, each group led by one Guest. I was moderating the 2nd group with Edmon. We addressed the following policy questions:

  1. What is the future of “human work”? How should we deal with job obsolescence?
  2. What role should the government play in the wake of the heightened role of emerging technologies in our quickly transforming the digital world? How much regulation in what form will be sustainable and will not stifle growth and innovation?
  3. The only problem more serious than having a few people control currency is having absolutely nobody controls currency. How would you persuade or dissuade a policymaker about cryptocurrency and/or blockchain as a futuristic innovation?
  4. How do we tackle with AI-ensued biases? How do we make sure AI uses data ethically and responsibly?

A brief summary of our breakout session and Q&A session is as follows:

Technology is paving the way for big data, cloud, Internet of things, robots, automation, video, collaboration platforms, and others. Companies can no longer afford the luxury of waiting to see what happens. There is the growing participation of Millennials who are not just bringing new approaches, ideas, values or styles of work, but will be the huge generation to enter the workforce with technological fluency.

Globalization has indeed eased the concern of location. With no boundary for the organizations to work in this world, the language spoken, currency transacted and physical location are starting to matter less. Economic history suggests following a period of disruption brought about by new technologies, the economy will eventually manage to create adequate jobs for their workforce. While certain sectors may use less labor, there are others with more new openings.

In the 1920s, cars replaced horse coaches that saw the coachmen lose jobs. However, it created new and often better-paid jobs like automobile manufacturing, car repairs, traveling, road building, etc which did not exist then.

So, how do you think you can stay relevant in this era of clicks and swipes, pins and passwords?

At a time when technologies such as artificial intelligence (AI) are feared to render millions of humans jobless, a recent report from McKinsey Global Institute (MGI) says that the digital economy has the potential to unlock productivity and would create 60-65 million new jobs by 2025.

The digital economy will produce goods and services with less labor, thus lowering employment and wages. However, it raises productivity that should lower prices with new products emerging from higher final demand thus creating new jobs with possibly better wages. Hence, the initial disruption should be compensated.

Meanwhile, the challenges for both the policies and workers with a fast-growing digital economy are the timing. Labor-saving digital technologies raise unemployment fast due to slow new job opportunities emerging. It is because it takes time to create new markets, assets transferred across sectors, business know-how built up and new skills developed.

To expedite job creation, investment in data and digital infrastructure must be large. The share of GDP invested in ICT must increase fast. Business adoption of advanced digital technologies must be raised quickly. Education policy must be comprehensive with a full range of plans from immediate until long term, focusing on digital capability, innovation and creativity to ensure business and economy can soar high.

About the writer

Ananya Singh (NetMission Ambassador of class 2019/20, India)
Bachelor’s Degree in Economics, BJB Autonomous College