Governments in developing countries need to act now to avoid technology's threat to jobs

Press release, 8 August 2017

Governments and businesses in the developing world can help protect people's jobs and livelihoods from the damaging effects of automation and rapid technological change. This can be done by refocusing their economic and social policies to make them more sustainable and fair, new analysis shows.

IIED's 'Automation and inequality: the changing world of work in the global South' shows that export manufacturing as a route to closing the gap between rich and poor countries will become less effective as technological changes take over increasing numbers of low-paid industrial jobs. This will particularly affect women's opportunities to work.

Although cheap labour will continue to have an advantage over automation in such areas as the manufacture of clothing and other textiles, this will not be indefinite.

Existing research shows that in other sectors, agricultural smallholders may lose out under increasingly automated agribusiness as distribution systems are changed. Digital technology will mostly benefit skilled workers at the expense of those less skilled.

Workers will lose protection and bargaining power under the on-demand 'gig economy', which will increasingly operate at the global scale. The growing insecurity of work in rich countries will have a serious impact in the developing world, if it continues to fuel nationalist politics leading to cuts to aid, lower tolerance to migration and growing protectionism.

But growing inequality is not inevitable, as 'Automation and inequality' shows. Governments in the developing world need to introduce reforms early on that will shift their economies' focus. By moving the dependence on manufacturing before these jobs are replaced and preparing for the changes that automation and other technological developments will bring, governments can help protect men and women's livelihoods. 

One option is for developing countries that have rich ecosystems – such as forests and rivers – to focus their sustainable development strategies on the inherent value of these resources. Costa Rica, for example, has done this through its reforestation programme, helping to develop sustainable tourism.

Support to smallholder farmers so they can benefit from changing technology to strengthen their incomes is also important.

Social policies have an important role to play in helping people adapt to changing job markets. Social protection schemes, such as public works programmes or social transfers, that offer income to poor people without limiting their ability to work in the informal sector, can help people adapt to a changing world of work.

Public works programmes can also play a valuable role in supporting communities to preserve the local environment. In India, this can be seen with the Mahatma Gandhi National Rural Employment Guarantee Act. The act provides for men and women living in poverty to claim 100 days of paid work a year through a publicly funded scheme, and supports provision of a range of small-scale infrastructure with environmental benefits.

It is equally vital for governments to invest in developing education systems that can ensure people have the skills they need to adapt to and flourish in the new and increasingly dynamic environment. Both advanced technological skills, even if for a small segment of the workforce, and high quality general education are key to ensuring people in poorer countries are not left behind.

Future and present workforces need to be able to develop marketable skills both in terms of knowledge, social and communication capacities to enable men and women to adapt to the rapidly changing labour market throughout their lives.

Andrew Norton, director of IIED and the report's author, said: "With the growing expansion of technological change – particularly automation – the gap between rich and poor countries must not be allowed to grow. Automation and other technological developments are both a warning and present opportunities. Now is the time for governments and businesses to act. They need to make sure that the men and women whose livelihoods are threatened by this change have the means to adjust and adapt."

Contact

For more information please contact Beth Herzfeld, IIED senior media officer, on +44 (0)7557 658 482 or email beth.herzfeld@iied.org

Notes to editors

  • 'Gig economy' describes work where previously stable full-time jobs have been broken down into task-by-task commissions that self-employed contractors take on through a company 'app, such as the Uber taxi system. There is also an expanding new 'global gig economy', which allows workers anywhere in the world with good internet access to bid for work on digital platforms performing services such as translation, transcription, programming, graphic design, writing or accountancy.
  • IIED is a policy and action research organisation. It promotes sustainable development to improve livelihoods and protect the environments on which these livelihoods are built. IIED specialises in linking local priorities to global challenges. Based in London, UK works in Africa, Asia, Latin America, the Middle East and the Pacific, with some of the world’s most vulnerable people to strengthen their voice in the decision-making arenas that affect them – from village councils to international conventions
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