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Digitization is unlikely to destroy jobs, but may increase inequalities

Melanie Arntz's picture
The authors, guest bloggers, work in the Labour Markets, Human Resources and Social Policy Research Department at the Mannheim Centre for European Economic Research (ZEW).
The estimated share of ‘jobs at risk’ must not be equated with actual or expected employment losses from technological advances. Photo: Dominic Chavez / World Bank.

In recent years, there has been a revival of public concerns that automation and digitization might result in a jobless future. This debate has been particularly fueled by Carl Benedikt Frey and Michael A. Osborne, who argue that 47% of jobs in the US are ‘at risk of computerization.' 

These alarming figures spurred a series of studies that find similarly high shares of workers at risk of automation for other European countries. By focusing on the level of occupations, these studies typically neglect the fact that occupations involve bundles of tasks, many of which are hard to automate. As a result, these studies potentially overestimate the share of workers at risk of automation.

Improve workforce development systems in 5 (not so simple) steps

Viviana Roseth's picture
Nurses listen during a training program to learn more about child and adolescent mental health in Monrovia, Liberia


In the last decade, policy attention to better develop the knowledge and skills of the workforce has increased for several reasons. First, global youth unemployment rates, three times higher than the unemployment rate for those over 25 years old, have raised concerns about social stability as well as sustained and long-term economic growth. Second, many who argue that youth unemployment is partially caused by a mismatch between graduates’ skills and the skills that employers need, also believe that revitalizing vocational education and training can help address the problem. Third, a skilled workforce that can easily adapt to technological change is likely a fundamental component for countries to remain competitive in the global economy.

Job tasks drive development

Dev Nathan's picture
Dev Nathan, guest blogger, is Professor at the Institute for Human Development, New Delhi
 
 © Stephan Gladieu / World Bank
Nebiba Mohammed, 28, works at the Shints textile factory plants, 45 minutes outside of the Addis Ababa city center. Photo: © Stephan Gladieu / World Bank  

Economics usually distinguishes between different sectors as low-tech (e.g. garments), medium-tech (e.g. automobiles), or high-tech (e.g. IT products). But the splintering of production within global value chains (GVCs) shows a need for a finer differentiation of production segments by tasks based on their knowledge levels. This is because development is not so much a matter of the sector in which jobs are being carried out, as of the knowledge content of the activity itself.

A tale of twin demographics: Youth in cities

Nicole Goldin's picture
60% of urban populations will be under the age of 18 by 2030.  How can we harness youth potential as a growth engine for cities? Photo: Arne Hoel/ World Bank

This week thousands of policy-makers, experts, NGOs and urban-minded citizens of all stripes are convening in Quito, Ecuador to discuss the New Urban Agenda at Habitat III – a significant global convening that occurs every 20 years. And, in a couple weeks, amid the costumes and candy, ghosts and goblins of Halloween, the world will mark UN World Cities Day on October 31st. For good reason, youth are part of the conversation.  In today’s global landscape, two demographic patterns should stand out:  rapid urbanization and large youth populations.  These patterns are especially robust across developing nations.  Already the worlds’ cities host half of its citizens, and Asia and Africa are expected to account for 90% of urban growth. While growing, cities have also become younger – many of the world’s nearly four billion people under the age of 30 live in urban areas, and according to UN-HABITAT, it is estimated that 60% of urban populations will be under the age of 18 by 2030.

Middle class jobs are thriving in Central and Eastern Europe

Roma Keister's picture
Photo: Tomislav Georgiev / World Bank

Exponential increases in automation, computerization and digitization is having a profound impact on many people’s jobs. Branko Milanovic’s recent work on global inequality has shown extent to which the lower-middle class jobs in developed countries are being replaced by technology. In particular, economists argue that middle-skilled, routine-intensive jobs are being hollowed-out. And indeed, in Western European countries and the US there has been a decrease in the intensity of routine tasks – both manual and cognitive. However, in Central and Eastern European (CEE) countries, the amount of routine cognitive work has been on the rise. And the pay for these workers has increased faster than for high skilled workers. Why is this happening, when in the most advanced economies the opposite is happening?

Tourism energizes South Africa’s job market

Christopher Rooney's picture
Christopher Rooney, guest blogger, is a junior researcher at the Development Policy Research Unit at the University of Cape Town
Tourism in South Africa is seen as a driver for growth because of its linkages with other parts of the economy. Photo: Trevor Samson / World Bank

There is strong evidence that suggests that the South African tourism industry can help create a large number of secure, inclusive jobs. Despite the global financial crisis and a sector which competes on a global level, it created 48,000 jobs since 2008. Furthermore, many of these jobs are low-skilled, located in towns where there is not much other economic activity and have a higher-than-average representation of women and the youth. In addition, there are also opportunities for employees to increase their skills and their wages, so they do not remain in a low-wage, low productivity wage cycle permanently.

Moving from informal to formal sector and what it means for policymakers

Monami Dasgupta's picture
Moving workers from lower to higher productivity and work that provides better paying jobs can help poor families escape poverty. Photo: World Bank

Monami Dasgupta, guest blogger, is a Research Analyst at IFMR Finance Foundation

Some people are self-employed in the informal sector because they want to avoid registration and taxation. But many people work in the informal sector through necessity, not choice. Today, there are two features of the informal sector that are well-recognized. Firstly, much of the informal economy contributes greatly to the formal economy. Secondly, women constitute the majority of precarious, under-paid, informal workers.

The economic and social consequences of robotization

Harm Bandholz's picture
Harm Bandholz, guest blogger, is the Chief US Economist for the UniCredit Group
Worker in an industrial factory in India. Photo: World Bank

Robots are just one of the latest stages of technological progress. The number of robots being used by businesses to boost productivity has increased rapidly in recent years. And there is no reason to believe that this pace of robotization will begin to slow any time soon.

Jobs and mobile phones in Africa

Safia Khan's picture

Safia Khan, guest blogger, is a researcher at Research ICT Africa

In much of Africa there has been a rapid uptake of mobile phones. Their ability to contribute to increased welfare outcomes such increased gender equality and the alleviation of extreme poverty has been widely discussed. But, analysis of the impacts of such information and communication technology (ICT) on the labor market outcomes of those in developing countries, is almost non-existent.

Our top picks for summer reading on jobs and development

Nicholas Charles Lord's picture
The town of Mafraq in the north of Jordan had 90,000 inhabitants before the Syrian crisis, with the influx of refugees its population has swelled to 200,000. Photo: William Stebbins / World Bank

We have curated the following articles and papers for summer reading. They highlight the ongoing coverage of the impact of technology and jobs, the need for new sets of skills relevant to the digital economy, the need for refugees to find work quickly and the global imperative for creating good jobs in Africa.

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