Technological revolution has given rise to a digital economy, in which the ICT infrastructure expansion, and internet and mobile phones access empowered people to harness their creativity and ingenuity and allowed much more information to be shared than any other means of communication ever has.
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 $5tn. In 2023, the corresponding figures reached $31tn and $7tn respectively. Global high-technology exports have increased from $2.tn in 2014 to $3.5tn. In 2016, global exports of ICT were $493 billion. In 2020, it reached $676bn, about 15% of the global service exports.
With all these changes, the nature of the service sector of an economy and its contents have changed. With the extension of the internet to households, it has become possible for individuals to provide business-process services from their homes. This often involves specialized white-collar skills such as computer programming, copywriting, and back-office legal tasks.
These tasks, generally from firms in developed countries, are carried out by people in developing countries such as Bangladesh, India, and the Philippines. Much of this business is mediated by companies that coordinate freelancers with small and medium-size firms that require business services. Coordination companies collect a commission from the freelancer, but often charge no fee to those offering the jobs.
Another trend with the potential to reshape work is the sharing economy. It is now also possible to match demand and supply peer-to-peer. Alternatives to taxis allow people to use their own cars to provide ride services, blurring the distinction between professional drivers and those who have a spare seat in their private car. Technology is also allowing traditional taxi drivers to work more efficiently finding customers via online services such as Uber, Careem, or GrabTaxi. The same principle is being used by auto rickshaw drivers in India via mGaadi. Other companies allow people to rent out accommodation in their private homes (such as Airbnb).
These arrangements allow people to make better use of capital assets such as cars or homes. But they can also replace more traditional jobs if they compete with conventional hotels and transport services, such as taxi drivers and hotel staff, who are generally low skilled and poorly paid. There are also new challenges to regulating services, ensuring consistent quality, and protecting consumers. In some ways the professionalization of work is reversing.
Technological revolution is neither passive nor benign, when it comes to having impacts on work and workers
Digital technology has made it easier to start a business. When individuals have identified a good idea they have more tools at their disposal to support their entrepreneurial efforts. Global investments in start-ups venture capital were $70bn 2024 and there are more than 150 million start-ups globally.
These (often young) people see entrepreneurship a viable alternative to traditional jobs and as a means to pursue their dreams. Start-ups are taking root in both developed and developing countries. Asia is embracing them quite rapidly. Young people see a lot of opportunities there, bolstered by financial technology and big data.
Yet start-ups face challenges. First time start-up failure is about 20%. Access to capital is one, ideas that are sustainable another. In developing countries weaker legal institutions pose a problem. And long-term viability is their largest challenge.
Some fear job losses through automation. Indeed, many jobs are already disappearing, eg the work of telemarketers, order clerks, loan officers, photographic process workers etc. Broad swatches of middle management risk being eliminated. Some estimates indicate that by 2025, almost 50% of today’s occupations could become redundant.
But others argue that because of technological revolution and changing nature of the economy, new activities would emerge. And computers are far from being able to use creativity, intuitions, persuasion and imaginative problem solving -- in a nutshell, human ingenuity. New jobs will require creativity, intelligence, social skills and the ability to exploit AI. Some argue that “children who are not born yet, their jobs have not been created yet.”
There has never been a better time to be a worker with special skills and the right education, because these people can use technology to create and capture value. But there has never been a worse time to be a worker with only ordinary skills and abilities, because computers, robots and digital technologies are acquiring those skills and abilities at an extraordinary rate.
There are risks in terms of work and workers through unintended consequences of technological revolution. It is a question of balance between opportunities and risks. Furthermore, there will be winners and losers from the phenomenon and that would be a crucial driver of inequalities in a society.
Technological revolution is neither passive nor benign, when it comes to having impacts on work and workers. It would require managing the process through strategies, policies, and institutions, both nationally and globally, in a balanced way so that the benefits are optimized in human lives. The role of policy in equalizing the life chances of people to have decent work has never been more important.
Dr Selim Jahan is Former Director, Human Development Report Office and Poverty Division, United Nations Development Program, New York, USA.