Jobs are key to ending poverty and development practitioners, policymakers, academics, and business leaders agree that measuring jobs is important. While data on the number of jobs being created is important, it only tells a small part of the story.
Jobs drive development. They are the surest pathway out of poverty and are crucial for inclusive growth. South Asia is the world’s fastest growing region; however, this progress has not always translated to jobs that are inclusive and productive.
We recently hosted our first Jobs and Development Conference, and one of the key topics we discussed was the role of governments in creating jobs. We had about 260 participants, and 68 papers were presented (more than 150 considered but not selected for presentation, a high rejection rate that attests to the quality of the papers that were presented).
One of the plenary sessions that I chaired focused on the role of governments in designing and implementing jobs strategies. The consensus has been that jobs will come if countries just fix markets and institutions to promote investment and economic growth. But this is a very simplistic view.
About one in three urban residents (over 900 million people) in developing markets live in informal settlements. Do these slums help lift people out of poverty by providing affordable entry points to access urban assets, services and livelihoods? Or do they confine people to enduring hardship and vulnerability in squalid and unsafe environments with little prospect of upward mobility?
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.
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.
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.
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.
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?
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.