Tech­nol­ogy will dis­rupt labour – WEF

Growth, in­equal­ity among risk ar­eas

The Star Late Edition - - BUSINESS REPORT - Siseko Njobeni

ECO­NOMIC growth and re­form, in­equal­ity, man­ag­ing tech­no­log­i­cal dis­rup­tion and ac­cel­er­at­ing ac­tion on cli­mate change were among key risk ar­eas in need of ur­gent ac­tion, ac­cord­ing to the World Eco­nomic Fo­rum’s (WEF’s) Global Risks Re­port 2017.

The re­port, launched yes­ter­day, comes as global lead­ers in govern­ment, busi­ness and civic so­ci­ety pre­pare to de­scend on the small town of Davos in the Swiss Alps for next week’s WEF meet­ing.

In a state­ment ahead of the re­lease of the re­port, the WEF warned about trends such as ris­ing in­come in­equal­ity, so­ci­etal po­lar­i­sa­tion and tech­no­log­i­cal dis­rup­tion. It said: “86 per­cent of man­u­fac­tur­ing job losses in the US be­tween 1997 and 2007 were due to au­to­ma­tion, com­pared to less than 14 per­cent due to trade.

“Most as­sess­ments sug­gest that tech­nol­ogy’s dis­rup­tive ef­fect on labour mar­kets will ac­cel­er­ate across non-man­u­fac­tur­ing sec­tors… as rapid ad­vances in ro­bot­ics, sen­sors and ma­chine learn­ing en­able cap­i­tal to re­place labour… Tech­nol­ogy has al­ways cre­ated jobs as well as (de­stroyed) them, but there is ev­i­dence that the en­gine of tech­no­log­i­cal job cre­ation is sput­ter­ing,” the WEF said in the re­port.

It said, driven by the con­ver­gence be­tween dig­i­tal, bi­o­log­i­cal and phys­i­cal tech­nolo­gies, the Fourth In­dus­trial Rev­o­lu­tion cre­ated new global risks and ex­ac­er­bated ex­ist­ing risks. Klaus Sch­wab, the founder and ex­ec­u­tive chair­man of the WEF, said the re­port ex­plored “grav­ity cen­tres” that would shape global risks.

“First, con­tin­ued slow growth com­bined with high debt and de­mo­graphic change cre­ates an en­vi­ron­ment that favours fi­nan­cial crises and grow­ing in­equal­ity.

“At the same time, per­va­sive cor­rup­tion, short ter­mism and un­equal dis­tri­bu­tion of the ben­e­fits of growth sug­gest that the cap­i­tal­ist eco­nomic model may not be de­liv­er­ing for peo­ple. The tran­si­tion to­wards a more multi-po­lar world or­der is putting global co-op­er­a­tion un­der strain,” said Sch­wab.

He said the threat of a less co-op­er­a­tive, more in­ward-look­ing world also cre­ated the op­por­tu­nity to ad­dress global risks and the trends that drove them. “This will re­quire re­spon­sive and re­spon­si­ble lead­er­ship with a deeper com­mit­ment to in­clu­sive devel­op­ment and eq­ui­table growth, both na­tion­ally and glob­ally.”

Ac­cord­ing to the WEF, the UK’s vote to leave the EU and US Pres­i­dent-elect Don­ald Trump’s vic­tory re­in­forced per­cep­tions of a grow­ing back­lash against el­e­ments of the do­mes­tic and in­ter­na­tional sta­tus quo.

“The im­pli­ca­tions of re­sults such as these are po­ten­tially far-reach­ing – some peo­ple ques­tion whether the West has reached a tip­ping point and might now em­bark on a pe­riod of de­glob­al­i­sa­tion. But the un­cer­tainty and in­sta­bil­ity that char­ac­terised 2016 are not Western phe­nom­ena alone. We saw vari­a­tions of them in coun­tries across the world, in­clud­ing Brazil, the Philip­pines and Turkey,” it said.

That dis­con­tent with the cur­rent or­der had be­come “an elec­tion-win­ning propo­si­tion” and in­creased the ur­gency of un­der­stand­ing and re­spond­ing to global risks, the WEF said.

Mean­while, the re­port said South Africa, Rus­sia, Bu­rundi and Gam­bia’s with­drawal from the In­ter­na­tional Crim­i­nal Court was a wor­ry­ing sign of a de­te­ri­o­rat­ing com­mit­ment to global co-op­er­a­tion which has seen coun­tries step back from mech­a­nisms set up to un­der­pin in­ter­na­tional se­cu­rity.

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