By Ratnakar Adhikari, Executive Director of the Enhanced Integrated Framework Executive Secretariat, World Trade Organizationand Fabrice Lehmann, Associate, Enhanced Integrated Framework (EIF)
The fourth industrial revolution is charting a new and uncertain course for the world economy. Least developed countries must prepare for the opportunities and risks that it brings. It is characterised by the confluence of new technologies, fusing the digital, physical and biological spheres.
Rapid technological change is expected to have a profound impact on economic and social development in countries at all levels of income. Opportunities include harnessing the possibilities of digitalisation for sustainable development and social empowerment. Risks involve marginalisation and a widening chasm between poor nations and their emerging and industrialised partners.
ByMark Graham, Professor of Internet Geography, Oxford Internet Institute, University of Oxford; Turing Fellow, The Alan Turing Institute; and Research Affiliate, School of Geography and the Environment, University of Oxford
Billions of people at the world’s economic ‘’margins’’ are experiencing a moment of changing connectivity. In Manila, Manchester, Mogadishu, the banlieues of Marseille and everywhere in between, the world is becoming digital, digitised and digitally mediated at an astonishing pace. Most of the world’s wealthy have long been digitally connected, but the world’s poor and economically marginal have not been enrolled in digital networks until relatively recently. In only five years (2012–2017), over one billion people became new Internet users (ITU 2016). In 2017, Internet users became a majority of the world’s population. The networking of humanity is thus no longer confined to a few economically prosperous parts of the world. For the first time in history, we are creating a truly global and accessible communication network.
Not all factories are the same. Today, their differences are bigger, more impressive and carry far-reaching implications for development in developing economies. Since the 1970s, industrial production has been organised in complex, multi-country networks of suppliers and providers. The conventional expectation was that this trend would be conducive to growing homogeneity, with converging techniques of production, salaries, standards and business organisation in the “world factory” system. However, as things do not often go “by the book”, manufacturing today encompasses far different realities. China has become the world’s leading manufacturing country. Early industrialisers have built complex value chains, delocalising non-core manufacturing activities to developing economies with relatively lower labour costs and growing domestic markets. The result: manufacturing is a collection of deeply different systems. And differences exist even within the same sector. Just look at the textiles industrial parks in Ethiopia that manufacture for and export fast fashion brands, such as Spain’s Zara. Or look at the robot-powered, fully automated smart factory of Adidas in Germany, which has been making customised mass production of textiles a reality in Europe since 2016. Consider the artisanal, luxury, on-demand, tailor-made production of Lamborghinis in Emilia Romagna, the highly automated export-oriented Audi production in Mexico, and the vertically integrated, only partially automated, domestic market-oriented BYD electric vehicle factory in Shenzhen, China. Continue reading “The future of manufacturing and development: three things to remember”
By Atul Mehta, Director, IFC, Telecom, Media & Technology, Fintech, Venture Capital & Funds; Ceyla Pazarbasioglu, Senior Director, World Bank Group, Finance, Competitiveness and Innovation Global Practice; and Jose Luis Irigoyen, Senior Director, World Bank, Transport and Digital Development Global Practice
If we wish to create a future built on shared prosperity, digital technology will be critical.
In fact, as technology innovation accelerates, it may be the best path to inclusive growth. Extending Internet access in developing countries to levels seen in developed countries could enhance productivity by as much as 25%, according to Deloitte. The resulting economic activity could generate USD 2.2 trillion in additional GDP and more than 140 million new jobs.
At the World Bank Group, we have been putting quite a lot of thought into understanding what it takes to create a successful and inclusive digital economy, in light of our mission to end extreme poverty and boost shared prosperity. Technology can be a force for good — by promoting economic inclusion, efficiency, and innovation. But it can also cause upheaval — by displacing jobs or imperiling the security of personal and government data, and even critical infrastructure. And it can widen the digital divide — increasing the gap between those who benefit from technology and those who are excluded and risk falling further behind. That’s why technology’s risks and opportunities must be carefully managed. Continue reading “How to Build Inclusive Digital Economies”