A deepening wealth divide fuelled by globalization is leading to a looming inequality crisis, one that will be exacerbated by technological innovations such as artificial intelligence and associated job displacement
Fuelling inclusive growth through redeployment, reskilling, active social policy and reshaping of education will be the key ways to mitigate gaps between the haves and the have-nots
Dalian, People’s Republic of China, 28 June 2017 – As the Fourth Industrial Revolution starts to permeate all aspects of our lives, ensuring that economic growth is inclusive and participatory will be the only way to avert a looming inequality crisis. Science and technology are not ends and means in themselves, and neither is economic progress – that was the consensus of an expert panel gathered to discuss inclusive growth on the second day of the 11th Annual Meeting of the New Champions in Dalian.
“Globalization and national economies just haven’t played out in the way they should have,” observed Tharman Shanmugaratnam, Deputy Prime Minister and Coordinating Minister for Economic and Social Policies of Singapore, “The source of the problem, we know from middle class stagnation, is weak productivity growth.”
Contrary to conventional theory, noted Shanmugaratnam, economic growth has widened the gap between the haves and the have-nots, causing a deepening divide that has serious social and political ramifications – as evidenced by feelings of disenfranchisement expressed in the US election and Brexit vote in the UK.
“When we talk about inclusive growth, what that means to me is equality,” noted Marc R. Benioff, Chairman and Chief Executive Officer of Salesforce, USA. “We include everyone, we treat them equally, give them equal opportunities, and we pay them equally … Some studies show it is going take 170 years before we have gender equality; this should be a sign that we have throughout our organizations these very serious problems that need to be addressed today.”
While there was agreement among panellists that technological innovation, especially artificial intelligence, will have a dramatic and disruptive effect on society and inevitably lead to job displacement, Jean Liu, President of Xiaoju Science and Technology, People’s Republic of China, noted that firms have to take a lead role on initiating more-inclusive work environments.
“The sharing economy promotes access, inclusivity,” said Liu, a Co-Chair of the meeting, and the head of Didi Chuxing, China’s largest mobile transport platform, “Didi has 50% women employees, and executives, and we encourage women to work from home one day a week,” she pointed out.
Confessing that he is not “anti-tech” – and indeed is pushing for more disruption and entrepreneurship – Tyler Cowen, Professor of Economics at George Mason University, USA, noted that beyond the hype around Silicon Valley heroes, real work is needed to make a tangible impact on GDP.
“If we look at most of the Western world, for at least 15 years, real wages for the middle class have been stagnant or in a few cases even falling. This is the most important fact of our times,” explained Cowen, “So if you are reading that we are receiving a new technological cornucopia of new products, basically that cannot be true; it would be showing up in the real wages of most people.”
To mitigate future disruptions and stimulate more inclusive growth, Shanmugaratnam called for more active social strategies, a focus on reskilling and the need to “reshape education” to match existing realities.
The World Economic Forum’s 11th Annual Meeting of the New Champions is taking place on 27-29 June in Dalian, People’s Republic of China. Convening under the theme Achieving Inclusive Growth in the Fourth Industrial Revolution, nearly 2,000 business leaders, policy-makers and experts from over 80 countries will explore more than 200 sessions over the three days of the meeting.
The World Economic Forum, committed to improving the state of the world, is the International Organization for Public-Private Cooperation. The Forum engages the foremost political, business and other leaders of society to shape global, regional and industry agendas. (www.weforum.org).