Technology will disrupt labour – WEF
Growth, inequality among risk areas
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.