What can developing countries do to prepare for the automation shift?

By Sophie Edwards 06 October 2016

A man learns computer skills in China. Photo by: Li Wenyong / World Bank / CC BY-NC-ND

Up to 85 percent of jobs in some developing countries could be threatened by automation, according to research from the World Bank. That troubling prediction has experts debating what the development community can do to leverage the best of technology, while mitigating some of its harsher side effects for the world’s poorest.

The proportion of jobs threatened by automation could be as high as 85 percent in Ethiopia, 69 percent in India, and 77 percent in China, said World Bank President Jim Yong Kim in a speech at the Brookings Institution on Monday.

“The traditional economic path from productive agriculture to light manufacturing and then to large scale industrialization may not be possible for all developing countries. In large parts of Africa it is likely that technology could fundamentally disrupt this pattern,” Kim said.

This worrying trend was up for discussion during the World Bank annual meetings Wednesday during a panel on “Technology, Innovation, and Inclusive Growth,” convened by International Monetary Fund Managing Director Christine Lagarde. Speakers weighed in on what policymakers, innovators, funders and businesses should do to ensure the ongoing digital revolution does not leave people in developing countries behind and out of work.

Here are some of the key takeaways from the discussion:

1. Invest in digital infrastructure and training and do it fast.

According to John Chambers, chairman of technology giant Cisco Systems, advances in digital technology have the potential to grow GDP in developing countries by between 1 to 3 percent and increase average median incomes across the board.  

However, Chambers warned that people living in developing countries will get “left behind” and the “digital divide will become much wider” if there isn’t major investment in digital infrastructure and education and training on how to use that infrastructure. These investments need to happen quickly to keep pace with the rate of change. “It’s going to change fast and we have to keep up regardless of the country,” Chambers said.

He called for governments, businesses and international finance institutions, such as the IMF, to join forces and finance digital investments and training in a pilot country to show what’s possible.

2. Educate people so they can take part in the digital economy.

Leila Janah, CEO and founder of Samasoruce, believes some of the jobs lost to automation can be replaced by new roles working within those industries. Samasource employs low-income workers in East Africa and India to perform digital work for major companies like Google. For example, Samasource currently employs 500 people to tag images to help train self-driving car technologies.

In order to work in such roles, Janah said people need access to fast, low-cost internet and training. She also points to a growing trend where traditionally low-skill jobs, such as drivers and cleaners, are becoming digitized and part of the “gig economy,” a new class of service industry jobs — exemplified by car sharing services such as Lyft and Uber — in which workers are hired through a digital platform acting as a marketplace, making internet access and know-how crucial.

“A lot of work which was previously in the informal sector is now becoming digitized but no governments are preparing workers for this ‘gig economy.’ The government is 10 years behind on this and it hurts low income people who in many cases only recently obtained fast access to the internet,” Janah said.

3. Invest in social businesses and entrepreneurship.

By removing roadblocks to establishing small and medium-sized enterprises, developing countries can foster a startup-friendly environment that will help them capitalize on technological advancement, according to Chambers.

For Janah, investment needs to move away from traditional private sector companies and flow into the burgeoning social enterprise sector, where she sees huge potential for new business models, such as Samasource, which blend nonprofit and for-profit approaches and “impact source” their employees from low-income communities.

“There is so much investment in private sector companies … owned by elite members of society, but not enough investment in companies which go out and actually hire people at the bottom of the pyramid,” she said.  

4. Reform legal and tax systems.

According to Janah, reforming the legal and tax systems that govern technology and innovation will be key to ensuring developing countries get an equitable share of the wealth that is created.  

Technology is “amoral,” Janah said. It needs to be “guided” by regulations and laws that ensure the prosperity technological advances create is shared equitably by society.

Technology is creating a “new economy,” Janah said, in which it is possible for individuals to make billions by creating apps and platforms that employ far fewer people that wealth-building investments of the industrial age. The laws and systems around this new economy need to change to reflect this new reality too, Janah said. She proposed re-examining existing tax laws, so that inventors are taxed more for these “new sorts of redistribution.”

Janah believes there is willingness among tech entrepreneurs to redistribute wealth more equitably. She points to the example of Mark Zuckerberg, the founder of Facebook, who recently pledged to give away his fortune, as evidence there is an appetite among inventors for such redistribution.

5.  Embed equality and inclusion into the fabric of technological innovation.

For Janah, a successful entrepreneur and business woman, the lack of women working in Silicon Valley has huge implications for the likelihood that new technologies will be dispersed in an equitable way throughout the world.

She called for equity to be a core principal of any policies developed to guide how tech innovation is governed.

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About the author

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Sophie Edwards

Sophie Edwards is a reporter for Devex based out of Washington D.C. and London where she covers global development news, careers and lifestyle issues. She has previously worked for NGOs, the World Bank and spent a number of years as a journalist for a regional newspaper in the U.K. She has an MA from the Institute of Development Studies and a BA from Cambridge University.


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