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The Global South Will Be Hit Hard

Friday, Feb 16, 2018
by Humanitarian Institute and Nik Dawson

01 Tech

Special series: The Perils of Progress. Full white paper here. Author: Nik Dawson

Are you and your organisation prepared to respond to the tech revolution? Learn more.

As the majority of low and medium skilled workers live in developing countries, the Global South is at the greatest risk from the technological revolution.

Cheap labour, improved logistics, and internet connectivity enabled offshoring of manufacturing in advanced economies. This ‘deindustrialisation’ helped lift incomes and living standards in the developing countries that assumed this outsourced labour. It also guided the transition of advanced economies toward more service-based labour (as previously discussed).

Therefore the fundamental concerns for developing economies are the same as advanced economies, they’re just more protracted. The central issue is still the rate of skill acquisition.

At the current rate, the projections look bleak. A World Bank report found that two-thirds of all jobs in the developing world face significant automation. Interestingly, the majority of these are likely to be middle-skilled, middle-paying occupations (for e.g. clerks, plant and machine operators).

Low-skilled jobs are still at significant risk of displacement.

However, the more immediate concern for low-skilled workers is where the medium-skilled workers look for their next job. If they’re not equipped for the new demands of the knowledge economy, medium-skilled workers move down the skill curve and the low-skilled labour supply increases. This heightens the bargaining power of employers, wages are pressured down, and inequality widens.

In some ways, we’re seeing this today with the movement towards the ‘on demand’ economy.

AI Blog2

Due to abundant supply of low and moderately skilled labour, employers dictate wages and only pay for discrete periods of work. Think: Uber or your favourite food delivery service.

The effect of growing displacement of medium-skilled labour is referred to as ‘employment polarisation’.

This is where labour supply becomes concentrated at either ends of the skill spectrum. The main issue with this are the obstructions to upward social mobility. If employment polarisation worsens, there are fewer opportunities for people to climb the skill ladder, as the medium-skilled rung is weakened or transformed.

This process of turnover, accelerated by automation through intelligent machines, could lead to sustained periods of underemployment or unemployment.

Not all workers will have the training or skills to fulfil the new jobs created by AI.

Developing countries are particularly at risk, given higher numbers of low-skilled and medium skilled workers, fewer training opportunities, and less comprehensive safety nets. This has not historically been a recipe for peace.

The extent of labour displacement, however, will be determined by people’s abilities to upskill and prepare for the demands of the knowledge economy.

Are you and your organisation prepared to respond?

Workshop overview

Our world is being transformed by two big forces: the technological revolution and the rise in inequality.

Are they linked? There’s good reason to believe they are.

Technological advances are already profoundly impacting the way we live and work. The hype of Artificial Intelligence (AI) is enthralling the public. Evoking hopes of productivity and fears of inequality - arguably the most common concern raised about emerging tech.

Without a knowledgeable and mobilised social sector, technology and the rising demand for high skilled labour will leave many people behind.

This workshop expands your insights and skills in understanding the trends, implications and opportunities of emerging technology’s impact on inequality.

Be a part of something VERY special that empowers cross discipline leaders to collaborate and strategically respond to the opportunities and challenges of tech for society.

Limited tickets available. Register today.

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