Nicholas Rosellini: 4th World Internet Conference

Dec 3, 2017

Nicholas Rosellini

UN Resident Coordinator and UNDP Resident Representative

I am honoured to participate in today’s forum and share a UN perspective on the digital economy and its impact on global development.

Without doubt, the changes brought about by the digital economy on people’s lives will be the most far-reaching in many generations. The digital economy has long passed its origins in technology and economic productivity to be a social and economic revolution, comparable with the scale and significance of the agricultural and industrial revolutions. It has already had, and will continue to have, significant impact on global development and the way we live and work.

At the same time, in 2015 world leaders adopted the 2030 Agenda for Sustainable Development, a comprehensive, universal plan of action that pledges to leave no one behind.

What impact will technological change have on our prospects to achieve the Sustainable Development Goals? Will the new digital economy help or hinder efforts to eliminate poverty, improve access to social services, protect the environment etc.?

Compared to past revolutions, the transformation led by the digital economy is faster and broader. In only the past two decades, the digital economy has spread to encompass almost all aspects of economic and social life. In China, the growth rate of digital economy hit 16.6% in 2016, more than double overall GDP growth.

The digital economy has many proven benefits, which I do not need to repeat. But in the process of merging the virtual and physical worlds, and combining online and offline activities, come new problems. These problems must be considered and addressed in the context of global development challenges.  

For instance, social stability is an important foundation for development. The digital economy is transforming traditional economies, improving the overall efficiency of how societies operate, and creating many new job opportunities. However, at the same time, jobs within traditional industries are disappearing or have been replaced.

The internet, along with advances in robotic technology and artificial intelligence, will fundamentally transform our workforce. A report released by McKinsey Global Institute last week has found that 400 to 800 million people will lose their jobs because of automation and machine learning. Those at highest risk will be workers employed in low-skill repetitive jobs. As these are usually low-wage jobs, it will be the most disadvantaged in our society who are most affected by future technological progress. And, unlike in previous economic transformations, in future, higher-level professional jobs will also be replaced by AI. We must predict and respond to these challenges, in order to minimise the negative impact of this transition in our workforce.

Looking ahead, people will face the dual challenge of acquiring professional and digital skills, or may face the risk of being excluded from the workforce. In this way, education will no longer be limited to concrete knowledge and skills, but more importantly will need to include how people acquire broader competencies to adapt to the changing world. Future learning will be lifetime learning, through various channels including online training that, for example, 16% of netizens in China are undertaking. Both skills and competencies will determine the extent of people’s participation in the digital economy, and therefore will be an influencing factor in wealth distribution and social equality in the future.  In this regard, poorer countries, regions and populations may lack the relevant skills or resources to access the facilities and equipment for such competency-based learning. All of this could exclude them from participating in the digital economy.

In the social sector, the digital economy can allow traditional public services, such as transportation, healthcare, education and housing, to be both more accessible and more affordable. Although still developing, the digital economy has the scope to create markets where more cutting-edge high-quality services become affordable by the general public. Such changes could dramatically promote the level of human development, because many digital oriented services have direct impact on people’s well-being. For example, NASA recently developed robotic technology that improves the detection of breast cancer.

However, the change won’t happen overnight - just as air travel and car ownership used to be only available to middle and upper classes a half century ago. Most important will be to secure accessibility to such services during the transition.

The digital economy has significant potential to contribute to the achievement of the Sustainable Development Goals, for example in areas such as quality education, decent work and economic growth, and industry and innovation.

Fundamentally it will be able to advance human development by enlarging life choices and expanding opportunities. In fact, as President Xi Jinping has called for: ‘a common community in cyberspace for a better future for mankind’.

To ensure that this emerging economy promotes sustainable development, and to promote a more even distribution of the digital dividends – that is, the broader development benefits from using these technologies - the priority should be strategies that target reform of policies, laws, regulations and institutions to appropriately respond to the rapid growth of the digital economy and the consequent social and economic impact. These challenges require coordination and joint action among governments, civil society and private sector.

In support of this priority, there are three practical steps worthwhile exploring: the idea of a Universal Basic Income, to address the impact on labour markets; investing more in lifetime education to build people’s competencies and to adapt workers’ skills to meet changing demand; and developing long-term strategies that can build up regulatory and taxation framework, that also can ensure institutions are accountable appropriate for the new economy that is emerging.

Looking ahead, we need to adapt to the changes from digital economy but understand in the process gain comes with pain. The digital economy brings enormous opportunities but also risks. We need strong partnerships in society to plan ahead and eliminate or mitigate such risks and ensure no one is left behind. 

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