IMF urges caution on technology, sees it as a long-term challenge to global economies
Adesola Afolabi was a businessamlive reporter and Head of Financial desk.
The IMF has cautioned global economies to not only confront immediate threats but consider long term challenges such as the impact of technology on jobs.
Christine Lagarde, the IMF managing director, said advances in artificial intelligence and automation all promise to raise productivity and growth, but she asked “what happens next?” adding that “As workers lose jobs, inequality could worsen and in turn our social fabric may fray even further.”
She explained that the first step to solving the problem is understanding its size. “Our new G-20 paper on the future of work shows that many nations are not getting an accurate picture of how technology is changing the workforce.
In her article, Lagarde said “Labour market statistics are hampered by a lack of information about the scope of the gig economy. Meanwhile estimates of our productivity, the value added to the economy from our work often overlook the way technology is increasing efficiency.
“Think of your digital watch, for example. The word watch does not fully capture its value. In 2018 your watch can also be a cellphone, a movie theater, a navigation tool, and a supercomputer. Our statistics sometimes miss this reality.”
She noted that better measurements are only part of the puzzle. “Any new data will be wasted without bold actions that help citizens deal with the consequences of automation and the disruptions that come from new technologies.
“These actions include modernizing social safety nets, reforming education systems to provide for lifelong learning and committing to major investments in digital infrastructure. Singapore, which is participating in this year’s G-20, is a good model.
“Over the last decade Singapore has made infrastructure a priority and today they possess the most advanced digital infrastructure of any nation in the world,” she said.
Although Lagarde said there is no doubt that each country has different gaps to fill, “one thing is clear for all countries it is time to prepare for the technological disruption that will only accelerate in the years ahead.”
Lagarde believes that global economies can manage all the challenges facing the global economy and even turn them into advantages but only if we recognize that this moment of growth will not last forever.