The technological revolution and the changing world of work
In recent times, technological revolution has given rise to a digital economy, which includes internet (fixed and mobile broadband), cloud computing, smartphones, smart cities, the internet of things and internet of everything, Artificial intelligence (AI) and machine learning, big data analytics, blockchain and others. History has already witnessed four industrial revolutions associated with technology - the first one was driven by steam, the second by electricity, the third by digital revolution, and the fourth one by artificial intelligence.
The information and technology (ICT) infrastructure expansion, and the internet and mobile phones access empowers people to harness their creativity and ingenuity and allows much more information to be shared than any other means of communication has. The amount of digital data has doubled every three years since 2000, and today less than 2 per cent of stored information is offline. In 2024, there were 5.5 billion internet users, 8.9 billion mobile phone subscriptions. The impact of technology on the economy is undeniable. In recent years, the digital revolution has accelerated the global production of goods and services, particularly the digital trade. In 2014 the global trade in goods was $19 trillion and trade in services $5 trillion. In 2023, the corresponding figures reached $31 trillion and $7 trillion respectively. Global high-technology exports have increased from more from $2 trillion in 2014 to $4 trillion. In 2016, global exports of ICT services were $493 billion. In 2020, it reached $676 billion, 15 per cent of total global service exports.
People with the skills and resources to use technology and create value can thrive in today's digital world. But the digital economy presents skill-biased technical change: the idea that the net effect of new technologies reduces demand for less skilled workers while increasing demand for highly skilled ones. By definition, such change favours people with higher human capital, polarizing work opportunities. Globally, 133 million new high-skill jobs have emerged by 2022, but 75 million jobs might have been be displaced by automation and new technologies. Among the new roles that are expected to experience increasing demand are data scientists and analysts, e-commerce and social media specialists, training and development, innovation managers, AI and machine learning specialists, big data specialists, information security analysts, and process automation experts. By mid-2030s an estimated 30 per cent of jobs and 44 per cent workers with low-skills and education will be at potential risk of automation.
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In the digital economy the nature of work has changed with the introduction of new ways of working including flexible work, new ways of communicating, new products and new demands for skills. New technologies are also reinforcing and deepening previous trends in economic globalization, bringing workers and businesses into a global network through outsourcing and global value chains. These processes are reshaping work and testing national and international policies. In many areas of work, the labour market is now global. Multinational corporations have access to labour around the world, and workers must compete on a global scale for jobs. Digital technologies heighten the competition by removing geographical barriers between workers and work demands—in many cases it is not even necessary for a company to move physically or for a worker to migrate. The work connection can be made through the internet or mobile phones. That there is a global labour surplus makes competition among workers even fiercer.
Consumer demands have also evolved with expectations for low-priced consumer goods, for fresh and new products and for digital access to products from around the world. This has increased competition for companies to provide cheap, innovative products that cater to rapidly changing trends, all the more so as digital technologies allow companies immediate and constant access to information on consumer habits and interests. A flexible approach to production and cost cutting, including labour costs, has been the producer response. Low labour costs and flexible commitments to workers allow companies to quickly and efficiently respond to shifts in consumer needs and in the location of demand.
For workers these trends are aligning to create a world of work where creativity, skills, ingenuity and flexibility are critical. But even for those who are well positioned to compete in the emerging work system, security is lacking. Only one in four people worldwide works with a full-time, permanent contract; for those in wage and salaried employment, three out of five workers are in part-time or temporary work. With just 30 percent of the world's labour force covered by unemployment protection, a world of work that values flexibility may be a challenge to the stability of worker's lives.
The digital economy may be associated with high-tech industries, but it is also influencing a whole range of more informal activities from agriculture to street vending. Some may be directly related to mobile devices. In Ethiopia, farmers use mobile phones to check coffee prices. In some villages in Bangladesh, female entrepreneurs use their phones to provide paid services for neighbours. In India, farmers and fishers who track weather conditions and compare wholesale prices through mobile phones increased their profits 8 per cent, and better access to information resulted in a 4 per cent drop in prices for consumers. In countries as diverse as Malaysia, Mexico and Morocco, small and medium-size enterprises with Internet access averaged 11 per cent productivity gain by reducing transaction costs and barriers to market entry.
The internet and mobile technologies create new jobs directly through demand for labour from new technology-based enterprises and indirectly through demand from the wider ecosystem of companies created to support technology-based enterprises, such as network installation, maintenance providers and providers of skill-based services such as advertising and accounting. Mobile phones are extending the reach of agricultural extension services. One application developed in Kenya is iCow, which helps cattle farmers maximize breeding potential by tracking their animals' fertility cycles. Mobile services can match employees with vacancies. In South Africa the extension of mobile phone coverage is associated with a 15 percent increase in employment, mostly for women. Many job-matching companies allow jobseekers to have real-time information on vacancies, while helping employers extend recruitment systems to entry-level and low-skill jobs. Voice messages are particularly useful for recruiting jobseekers with difficulty reading and writing.
Selim Jahan is the Former Director of the Human Development Report Office and Poverty Division, United Nations Development Programme, New York, US
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.
