and sexual orientation.In Latin America the population,some 100 million boys and 68 mil- wage gap between indigenous ethnic groups lion girls.Around half are engaged in hazard- and the rest of the population is estimated at ous work. 38 percent. In 2012 about 21 million people worldwide Workplace or occupational violence-in the were in forced labour,trafficked for labour form of threats and physical or verbal abuse- and sexual exploitation or held in slavery-like also weakens the work-human development conditions-14 million were subject to labour link.In 2009 some 30 million EU workers exploitation and 4.5 million to sexual exploita- experienced work-related violence,such as tion.Women and girls accounted for a larger harassment,intimidation,bullying or physical share than men and boys.Forced labour is The link between violence-10 million in the workplace and thought to generate around $150 billion a year 20 million outside it. in illegal profits. work and human The link also weakens in conflict and post-con- After arms and drug trafficking,human development is flict situations.Work under such conditions trafficking is the most lucrative illicit business not automatic does not always have a definable content,and worldwide.Between 2007 and 2010 trafficked human development may entail simple survival. victims of 136 nationalities were detected in Some work in some conditions damages 118 countries,55-60 percent of them women. human development.Many people are in work Trafficking of illegal migrants has recently that restricts their life choices.Millions work in surged.Networks of traffickers take money abusive and exploitative conditions that violate from desperate migrants who try to cross seas their basic human rights and destroy their dig- and land illegally into other countries.In 2014 nity,such as child labourers,forced labourers some 3,500 people,maybe many more,lost and trafficked workers (figure 3).And millions their lives in the Mediterranean Sea when traf of domestic,migrant,sex and hazardous-indus- ficking boats heading towards Europe,mainly try workers face various risks. from Libya,capsized or sank. The world has around 168 million child Paid domestic work is an important means labourers,almost 11 percent of the child of income for millions of workers,the majority FIGURE3 Corrosive and exploitative work shatters human development Violation of human rights Exploitative wages Child labour Shattered Forced labour human Trafficked workers dignity Loss of freedom and autonomy Human insecurity Source:Human Development Report Office. 6 HUMAN DEVELOPMENT REPORT 2015
The link between work and human development is not automatic and sexual orientation. In Latin America the wage gap between indigenous ethnic groups and the rest of the population is estimated at 38 percent. Workplace or occupational violence—in the form of threats and physical or verbal abuse— also weakens the work–human development link. In 2009 some 30 million EU workers experienced work-related violence, such as harassment, intimidation, bullying or physical violence—10 million in the workplace and 20 million outside it. The link also weakens in conflict and post-conflict situations. Work under such conditions does not always have a definable content, and human development may entail simple survival. Some work in some conditions damages human development. Many people are in work that restricts their life choices. Millions work in abusive and exploitative conditions that violate their basic human rights and destroy their dignity, such as child labourers, forced labourers and trafficked workers (figure 3). And millions of domestic, migrant, sex and hazardous-industry workers face various risks. The world has around 168 million child labourers, almost 11 percent of the child population, some 100 million boys and 68 million girls. Around half are engaged in hazardous work. In 2012 about 21 million people worldwide were in forced labour, trafficked for labour and sexual exploitation or held in slavery-like conditions—14 million were subject to labour exploitation and 4.5 million to sexual exploitation. Women and girls accounted for a larger share than men and boys. Forced labour is thought to generate around $150 billion a year in illegal profits. After arms and drug trafficking, human trafficking is the most lucrative illicit business worldwide. Between 2007 and 2010 trafficked victims of 136 nationalities were detected in 118 countries, 55–60 percent of them women. Trafficking of illegal migrants has recently surged. Networks of traffickers take money from desperate migrants who try to cross seas and land illegally into other countries. In 2014 some 3,500 people, maybe many more, lost their lives in the Mediterranean Sea when trafficking boats heading towards Europe, mainly from Libya, capsized or sank. Paid domestic work is an important means of income for millions of workers, the majority FIGURE 3 Corrosive and exploitative work shatters human development Violation of human rights Exploitative wages Shattered human dignity Loss of freedom and autonomy Human insecurity Child labour Forced labour Trafficked workers Source: Human Development Report Office. 6 | HUMAN DEVELOPMENT REPORT 2015
of whom are women.With appropriate pro- FIGURE 4 tections in place,domestic work can empower people and help lift their families out of pov- Speed of adoption of new technologies in the United States erty.But abuse is common in paid domestic work,particularly for female migrant workers. Sometimes if the legal framework is inadequate Car or unenforced,employers use threats and Airplane coercion to pay low or even no wages.They Telephone can force paid domestic workers to work long Electricity hours-up to 18 hours a day without days off. Video recorder Working conditions are often poor,with little Radio food and no access to medical care.Paid do- Television mestic workers may also be subject to physical Personal computer or sexual abuse. Intemet Mining is one of the most hazardous occu- Cell phone pations in many countries.It accounts for only 0 20 40 60 80 1 percent of the global workforce(30 million Time to adopt technology (years) workers)but is responsible for 8 percent of fatal accidents at work and for many injuries and dis- Note:Adoption refers to time for penetration of 50 percent of the population. Source:Donay 2014. abling diseases,such as pneumoconiosis(black lung disease). Access to the digital revolution is uneven across regions,sexes,age groups and the urban- Globalization and the The world has rural divide.In 2015,81 percent of households technological revolution in developed countries had Internet access, around 168 million are fast changing how we compared with only 34 percent in developing child labourers and work and what we do country regions and 7 percent in the least de- 21 million people veloped countries. The context of work is changing,with impli- Globalization brings workers and businesses in forced labour cations for human development.Driving the together in global networks through out- transformation of work are globalization and sourcing and global value chains.Companies technological revolutions,particularly the relocate or subcontract (or a bit of both)some digital revolution.Globalization has fostered functions or noncore activities to other coun- global interdependence,with major impacts tries where costs are lower.For example,Apple on patterns of trade,investment,growth and employs only 63,000 of the more than 750,000 job creation and destruction-as well as on people around the world who design,sell,man- networks for creative and volunteer work.We ufacture and assemble its products. seem to be living through new and accelerated Many economic activities are now integrated technological revolutions. in global value chains that span countries,some- In the past 10 years global trade in goods times continents.This integration goes from raw and services almost doubled-reaching nearly materials and subcomponents to market access $24 trillion in 2014,up from $13 trillion in and after-sales services.Production is mainly of 2005.The digital components of these flows intermediate goods and services organized in have also been increasing. fragmented and internationally dispersed pro- The speed of adoption and penetration of duction processes,coordinated by multinational digital technologies is mind-boggling.In the companies and cutting across industries. United States it took more than 50 years be- In recent years knowledge has become fore half the population had a telephone.For central to production.Even in manufacturing cell phones it took only 10 years(figure 4).By the value of finished goods comes increasingly the end of 2015 the planet will have more than from embodied knowledge.In 2012 trade 7 billion mobile subscriptions and more than in knowledge-intensive goods,services and 3 billion Internet users. finance-worth nearly $13 trillion-grew Overview 7
The world has around 168 million child labourers and 21 million people in forced labour of whom are women. With appropriate protections in place, domestic work can empower people and help lift their families out of poverty. But abuse is common in paid domestic work, particularly for female migrant workers. Sometimes if the legal framework is inadequate or unenforced, employers use threats and coercion to pay low or even no wages. They can force paid domestic workers to work long hours—up to 18 hours a day without days off. Working conditions are often poor, with little food and no access to medical care. Paid domestic workers may also be subject to physical or sexual abuse. Mining is one of the most hazardous occupations in many countries. It accounts for only 1 percent of the global workforce (30 million workers) but is responsible for 8 percent of fatal accidents at work and for many injuries and disabling diseases, such as pneumoconiosis (black lung disease). Globalization and the technological revolution are fast changing how we work and what we do The context of work is changing, with implications for human development. Driving the transformation of work are globalization and technological revolutions, particularly the digital revolution. Globalization has fostered global interdependence, with major impacts on patterns of trade, investment, growth and job creation and destruction—as well as on networks for creative and volunteer work. We seem to be living through new and accelerated technological revolutions. In the past 10 years global trade in goods and services almost doubled—reaching nearly $24 trillion in 2014, up from $13 trillion in 2005. The digital components of these flows have also been increasing. The speed of adoption and penetration of digital technologies is mind-boggling. In the United States it took more than 50 years before half the population had a telephone. For cell phones it took only 10 years (figure 4). By the end of 2015 the planet will have more than 7 billion mobile subscriptions and more than 3 billion Internet users. Access to the digital revolution is uneven across regions, sexes, age groups and the urban– rural divide. In 2015, 81 percent of households in developed countries had Internet access, compared with only 34 percent in developing country regions and 7 percent in the least developed countries. Globalization brings workers and businesses together in global networks through outsourcing and global value chains. Companies relocate or subcontract (or a bit of both) some functions or noncore activities to other countries where costs are lower. For example, Apple employs only 63,000 of the more than 750,000 people around the world who design, sell, manufacture and assemble its products. Many economic activities are now integrated in global value chains that span countries, sometimes continents. This integration goes from raw materials and subcomponents to market access and after-sales services. Production is mainly of intermediate goods and services organized in fragmented and internationally dispersed production processes, coordinated by multinational companies and cutting across industries. In recent years knowledge has become central to production. Even in manufacturing the value of finished goods comes increasingly from embodied knowledge. In 2012 trade in knowledge-intensive goods, services and finance—worth nearly $13 trillion—grew FIGURE 4 Speed of adoption of new technologies in the United States 0 20 40 60 80 Cell phone Internet Personal computer Television Radio Video recorder Electricity Telephone Airplane Car Time to adopt technology (years) Note: Adoption refers to time for penetration of 50 percent of the population. Source: Donay 2014. Overview | 7
1.3 times faster than trade in labour-intensive Social entrepreneurs are also emerging as a goods,to account for a larger proportion in new workforce.They are cause-driven people total trade in goods and services. committed to addressing social problems,and The digital revolution has produced such they establish nonloss,nondividend companies new frontiers of work as the sharing economy (where all profits are reinvested back into the (GrabTaxi),business process outsourcing company)that aim to be financially self-sus- (UpWork),crowdworking(Mechanical Turk) tainable and to maximize social benefits and flexible working.It has also revolutionized creative work and empowered small producers and artisans. Globalizing work has Technological advances have not only generated gains for some transformed work;they are also engines and losses for others for new forms of creativity and innovation. Collaborative teams and visionaries have With outsourcing,assembly jobs in developed turned ideas into tangible goods and services. countries began moving to export processing Innovations in computers and electronics zones as developing countries adopted ex- were central to this growth:From 1990 to port-oriented industrialization.The impact 2012 their share in all new patents more than on job creation in large developing countries doubled,from more than 25 percent to nearly such as China and Mexico,as well as smaller 55 percent. countries such as Costa Rica,the Dominican The digital revolution has also changed vol- Republic and Sri Lanka,has been substantial unteering,which can now be done virtually and positive,often boostinglocal development, (online or digitally).UN Volunteers'online although the quality of the work and enforce- volunteering system helped 10,887 volunteers ment of labour standards have varied. (60 percent of them women)contribute their The global offshoring of service jobs started skills towards development work in 2014. to pick up in the 1990s as advances in informa- We seem to be Some of the technologies with the highest tion and communications technology allowed potential to change work include cloud tech- many support services to be performed offsite. living through new nology,3D printing,advanced robotics,energy For example,between 2000 and 2010 the and accelerated storage and the automation of knowledge work number of direct jobs in information and com- technological -which through intelligent software systems munications technology in India jumped from will transform the organization and productiv- 284,000 to more than 2 million.Services are revolutions ity of knowledge work and enable millions to also growing in the Russian Federation,Latin use intelligent digital assistants. America and Africa,in part matching compa- In the new world of work,workers need to be nies'interests in diversifying into different time more flexible and adaptable-and be ready to zones to enable 24-hour service.But outsourc- retrain,relocate and renegotiate working con- ing to developing countries has not benefitted ditions.They also need to dedicate more time all sectors and all workers. to searching for new opportunities. While outsourcing in general seems benefi- The people most linked to the new world cial to developing country regions,it has con- of work are millennials-roughly the cohort sequences for workers in developed countries. born since 1980.This group has come of age Estimates vary,and the long-term impacts at a time when digital technologies and ad- are less clear than the short-term effects,but vanced information and communication tech- job losses are greater in manufacturing than nologies penetrate all areas of life.They have services.Short-term job losses due to offshor- also become adults at a time when flexibility,ing have been found to range from 0 in some adaptability and unconventional work are in- countries to almost 55 percent of all job losses creasingly common. in Portugal. Many millennials are looking for work that Today,jobs that involve administrative sup- goes beyond creating profits,hoping to solve port,business and financial operations,and environmental and social problems as part of computer and mathematical tasks are most their livelihoods. likely to be outsourced.In Australia,Canada 8 HUMAN DEVELOPMENT REPORT 2015
We seem to be living through new and accelerated technological revolutions 1.3 times faster than trade in labour-intensive goods, to account for a larger proportion in total trade in goods and services. The digital revolution has produced such new frontiers of work as the sharing economy (GrabTaxi), business process outsourcing (UpWork), crowdworking (Mechanical Turk) and flexible working. It has also revolutionized creative work and empowered small producers and artisans. Technological advances have not only transformed work; they are also engines for new forms of creativity and innovation. Collaborative teams and visionaries have turned ideas into tangible goods and services. Innovations in computers and electronics were central to this growth: From 1990 to 2012 their share in all new patents more than doubled, from more than 25 percent to nearly 55 percent. The digital revolution has also changed volunteering, which can now be done virtually (online or digitally). UN Volunteers’ online volunteering system helped 10,887 volunteers (60 percent of them women) contribute their skills towards development work in 2014. Some of the technologies with the highest potential to change work include cloud technology, 3D printing, advanced robotics, energy storage and the automation of knowledge work —which through intelligent software systems will transform the organization and productivity of knowledge work and enable millions to use intelligent digital assistants. In the new world of work, workers need to be more flexible and adaptable—and be ready to retrain, relocate and renegotiate working conditions. They also need to dedicate more time to searching for new opportunities. The people most linked to the new world of work are millennials—roughly the cohort born since 1980. This group has come of age at a time when digital technologies and advanced information and communication technologies penetrate all areas of life. They have also become adults at a time when flexibility, adaptability and unconventional work are increasingly common. Many millennials are looking for work that goes beyond creating profits, hoping to solve environmental and social problems as part of their livelihoods. Social entrepreneurs are also emerging as a new workforce. They are cause-driven people committed to addressing social problems, and they establish nonloss, nondividend companies (where all profits are reinvested back into the company) that aim to be financially self-sustainable and to maximize social benefits. Globalizing work has generated gains for some and losses for others With outsourcing, assembly jobs in developed countries began moving to export processing zones as developing countries adopted export-oriented industrialization. The impact on job creation in large developing countries such as China and Mexico, as well as smaller countries such as Costa Rica, the Dominican Republic and Sri Lanka, has been substantial and positive, often boosting local development, although the quality of the work and enforcement of labour standards have varied. The global offshoring of service jobs started to pick up in the 1990s as advances in information and communications technology allowed many support services to be performed offsite. For example, between 2000 and 2010 the number of direct jobs in information and communications technology in India jumped from 284,000 to more than 2 million. Services are also growing in the Russian Federation, Latin America and Africa, in part matching companies’ interests in diversifying into different time zones to enable 24-hour service. But outsourcing to developing countries has not benefitted all sectors and all workers. While outsourcing in general seems beneficial to developing country regions, it has consequences for workers in developed countries. Estimates vary, and the long-term impacts are less clear than the short-term effects, but job losses are greater in manufacturing than services. Short-term job losses due to offshoring have been found to range from 0 in some countries to almost 55 percent of all job losses in Portugal. Today, jobs that involve administrative support, business and financial operations, and computer and mathematical tasks are most likely to be outsourced. In Australia, Canada 8 | HUMAN DEVELOPMENT REPORT 2015
and the United States 20-29 percent of all jobs the same for workers inside and outside global have the potential to be offshored,though it is value chains,raising questions about how the unlikely that all of them will be.Many jobs in increases in productivity are shared between this estimate are in medium-and high-skilled workers and capital. service professions that can be carried out at Market pressures transmitted through global lower cost abroad as education levels rise and value chains tend to be absorbed by workers information and communications technology -whether in wages(driven down by global infrastructures improve. competition),in increased informalization So,while there may be immense benefits in and contractual insecurity (through multiple access to new jobs in countries hosting offshore subcontracting chains)or in layoffs(during activities,individuals losing jobs may require downturns).Multinational corporations training and new skills for a more competitive increasingly rely on a disenfranchised work- environment.To ease the adjustment,pro-force,using a mix of fixed-term employees, grammes are needed to help people find new temporary workers,independent contractors, work,enhance their skills and maintain access project-based workers and outsourced workers to a basic income.Training can also enhance to provide production flexibility and manage the abilities of workers in developing countries costs.Participation in value chains provides to access the new jobs. some with secure,decent jobs and others with The integration of developing countries in more precarious work (even in the same coun- global value chains has increased opportunities try and sector),in a type of"labour dualism." for paid work and prompted a shift in labour force participation for women(many find jobs in the garment industry).In 2013,453 million Seizing the future in the digital workers (up from 296 million in 1995),in- revolution is not chance or fate- cluding 190 million women,were involved in it is a matter of skill and foresight global value chains. But such integration does not say much The types of work that people do and the about the quality of work and whether workers ways they do it are being transformed by new have expanded their human capabilities.There technologies.This change is not new,but it is are concerns about levels of labour protection reshaping the link between work and human and opportunities for skills upgrading. development and the types of policies and in- The global value chain system generates stitutions needed to foster positive outcomes winners and losers,within and across countries for people. and industries.The footloose nature of global The spread and penetration of digital tech- value chains can generate less job security and nologies are changing the world of work every- put even more pressure on governments and where,but the effects vary across countries. subcontractors to minimize costs.This in turn Some technological changes are cross-cutting, In recent years puts pressures on workers'wages and working such as information and communications conditions,particularly among the low skilled. technologies and the spread of mobile phones knowledge has Developing countries also face the risk of and other handheld devices.Still,countries become central becoming locked into low value-added nodes will continue to have divergent production and to production of global value chains that limit work oppor- employment structures and different uses for tunities,skill development and technology digital technologies,largely reflecting the rela- exposure. tive economic weights of agriculture,industry The transition to global value chains has and services,as well as the resources invested introduced new complexities for workers in de-in developing people's capabilities.Labour veloped and developing countries alike.There markets,the ratio of paid to unpaid work and are questions about how much workers gain by the predominant types of workplaces in each partaking in work contributing to global value country differ-so the impacts of digital tech- chains versus work outside them.There is some nologies on work will vary,too. evidence that productivity is higher in global The digital revolution may be associat- value chain-oriented work but that wages are ed with high-tech industries,but it is also Overview 9
In recent years knowledge has become central to production and the United States 20–29 percent of all jobs have the potential to be offshored, though it is unlikely that all of them will be. Many jobs in this estimate are in medium- and high-skilled service professions that can be carried out at lower cost abroad as education levels rise and information and communications technology infrastructures improve. So, while there may be immense benefits in access to new jobs in countries hosting offshore activities, individuals losing jobs may require training and new skills for a more competitive environment. To ease the adjustment, programmes are needed to help people find new work, enhance their skills and maintain access to a basic income. Training can also enhance the abilities of workers in developing countries to access the new jobs. The integration of developing countries in global value chains has increased opportunities for paid work and prompted a shift in labour force participation for women (many find jobs in the garment industry). In 2013, 453 million workers (up from 296 million in 1995), including 190 million women, were involved in global value chains. But such integration does not say much about the quality of work and whether workers have expanded their human capabilities. There are concerns about levels of labour protection and opportunities for skills upgrading. The global value chain system generates winners and losers, within and across countries and industries. The footloose nature of global value chains can generate less job security and put even more pressure on governments and subcontractors to minimize costs. This in turn puts pressures on workers’ wages and working conditions, particularly among the low skilled. Developing countries also face the risk of becoming locked into low value-added nodes of global value chains that limit work opportunities, skill development and technology exposure. The transition to global value chains has introduced new complexities for workers in developed and developing countries alike. There are questions about how much workers gain by partaking in work contributing to global value chains versus work outside them. There is some evidence that productivity is higher in global value chain–oriented work but that wages are the same for workers inside and outside global value chains, raising questions about how the increases in productivity are shared between workers and capital. Market pressures transmitted through global value chains tend to be absorbed by workers —whether in wages (driven down by global competition), in increased informalization and contractual insecurity (through multiple subcontracting chains) or in layoffs (during downturns). Multinational corporations increasingly rely on a disenfranchised workforce, using a mix of fixed-term employees, temporary workers, independent contractors, project-based workers and outsourced workers to provide production flexibility and manage costs. Participation in value chains provides some with secure, decent jobs and others with more precarious work (even in the same country and sector), in a type of “labour dualism.” Seizing the future in the digital revolution is not chance or fate— it is a matter of skill and foresight The types of work that people do and the ways they do it are being transformed by new technologies. This change is not new, but it is reshaping the link between work and human development and the types of policies and institutions needed to foster positive outcomes for people. The spread and penetration of digital technologies are changing the world of work everywhere, but the effects vary across countries. Some technological changes are cross-cutting, such as information and communications technologies and the spread of mobile phones and other handheld devices. Still, countries will continue to have divergent production and employment structures and different uses for digital technologies, largely reflecting the relative economic weights of agriculture, industry and services, as well as the resources invested in developing people’s capabilities. Labour markets, the ratio of paid to unpaid work and the predominant types of workplaces in each country differ—so the impacts of digital technologies on work will vary, too. The digital revolution may be associated with high-tech industries, but it is also Overview | 9
infuencing a whole range of more informal technological revolution presents skill-biased activities from agriculture to street vending. technical change:the idea that the net effect Some may be directly related to mobile devic- of new technologies reduces demand for less es.In Ethiopia farmers use mobile phones to skilled workers while increasing demand for check coffee prices.In Saudi Arabia farmers highly skilled ones.By definition,such change use wireless technology to distribute scarce favours people with higher human capital,po- irrigated water for wheat cultivation.In some larizing work opportunities. villages in Bangladesh,female entrepreneurs At the top will be good jobs for those with use their phones to provide paid services for high education and skills.For example,in neighbours. the automobile industry those who benefit Mobile phones now facilitate many aspects will be the engineers who design and test of work through a combination of voice calls,new vehicles.At the bottom there will still be SMS and mobile applications.There are ben- low-skill,low-productivity,low-wage service efits for many other types of activity-formal occupations such as office cleaning.But the and informal,paid and unpaid-from food middle areas will see a steady hollowing out There has never vendors in Cairo to street cleaners in Senegal to of many jobs in office cubicles and on factory care providers in London. floors.The biggest losers will thus be workers been a worse time Internet and mobile phone access empowers with less specialized,routine-work skills(fig- to be a worker with people to harness their creativity and inge-ure 5). only ordinary skills nuity.Much more is possible,particularly if Many cognitively complex jobs are beyond the abilities even of people with reasonable and abilities inequalities in access between men and wom- en and rural and urban areas are addressed. qualifications.Some industries could thus face If Internet access in developing countries skill shortages,so companies willing to pay high were the same as in developed countries, salaries for the best talent will look to the global an estimated $2.2 trillion in GDP could be market.And besides being polarized nationally, generated,with more than 140 million new workforces are being stratified internationally, jobs-44 million in Africa and 65 million with low-skilled workers coming mainly from in India.Long-term productivity in devel-national markets and high-skilled workers from oping countries could be boosted by up to global markets. 25 percent. Now is the time to be a worker with special The digital economy has enabled many wom- skills and the right education,because these en to access work that allows them to apply people can use technology to create and cap- their creativity and potential.In 2013 about ture value.But there has never been a worse 1.3 billion women were using the Internet. time to be a worker with only ordinary skills Some have moved to e-trading as entrepreneurs,and abilities,because computers,robots and and some are employed through crowdworking other digital technologies are acquiring these or e-services.But this new world of work puts a skills and abilities at an extraordinary speed. high premium on workers with skills and qual- An implied promise of the digital revolution ifications in science and technology,workers was that it would increase labour productivity less likely to be women. and thus would lead to higher pay.This does Older workers also have new work options, not seem to have happened on either front: as they continue to work either because they productivity has not grown at the rates expect- enjoy their work or because they cannot af- ed,and few of the gains have translated into ford to retire.Most of the older and younger higher wages.In many economies(for example, workers are in different labour markets (so the Netherlands)the gap between productivity there is no direct substitution)and the anxiety and wage growth has widened over the years, that young people will lose out because older and the situation is even more serious as av- people are encouraged to work may not be the erage wages mask the fact that as real pay for case. most workers stagnated,income for the highest Still,there are risks and promises as yet unful- earners soared. filled.We may in fact be at an inflexion point, The technological revolution has been ac- with both positive and negative impacts.The companied by rising inequality.Workers are 10 HUMAN DEVELOPMENT REPORT 2015
There has never been a worse time to be a worker with only ordinary skills and abilities influencing a whole range of more informal activities from agriculture to street vending. Some may be directly related to mobile devices. In Ethiopia farmers use mobile phones to check coffee prices. In Saudi Arabia farmers use wireless technology to distribute scarce irrigated water for wheat cultivation. In some villages in Bangladesh, female entrepreneurs use their phones to provide paid services for neighbours. Mobile phones now facilitate many aspects of work through a combination of voice calls, SMS and mobile applications. There are benefits for many other types of activity—formal and informal, paid and unpaid—from food vendors in Cairo to street cleaners in Senegal to care providers in London. Internet and mobile phone access empowers people to harness their creativity and ingenuity. Much more is possible, particularly if inequalities in access between men and women and rural and urban areas are addressed. If Internet access in developing countries were the same as in developed countries, an estimated $2.2 trillion in GDP could be generated, with more than 140 million new jobs—44 million in Africa and 65 million in India. Long-term productivity in developing countries could be boosted by up to 25 percent. The digital economy has enabled many women to access work that allows them to apply their creativity and potential. In 2013 about 1.3 billion women were using the Internet. Some have moved to e-trading as entrepreneurs, and some are employed through crowdworking or e-services. But this new world of work puts a high premium on workers with skills and qualifications in science and technology, workers less likely to be women. Older workers also have new work options, as they continue to work either because they enjoy their work or because they cannot afford to retire. Most of the older and younger workers are in different labour markets (so there is no direct substitution) and the anxiety that young people will lose out because older people are encouraged to work may not be the case. Still, there are risks and promises as yet unfulfilled. We may in fact be at an inflexion point, with both positive and negative impacts. The technological revolution presents skill-biased technical change: the idea that the net effect of new technologies reduces demand for less skilled workers while increasing demand for highly skilled ones. By definition, such change favours people with higher human capital, polarizing work opportunities. At the top will be good jobs for those with high education and skills. For example, in the automobile industry those who benefit will be the engineers who design and test new vehicles. At the bottom there will still be low-skill, low-productivity, low-wage service occupations such as office cleaning. But the middle areas will see a steady hollowing out of many jobs in office cubicles and on factory floors. The biggest losers will thus be workers with less specialized, routine-work skills (figure 5). Many cognitively complex jobs are beyond the abilities even of people with reasonable qualifications. Some industries could thus face skill shortages, so companies willing to pay high salaries for the best talent will look to the global market. And besides being polarized nationally, workforces are being stratified internationally, with low-skilled workers coming mainly from national markets and high-skilled workers from global markets. Now is the time to be a worker with special skills and the right education, because these people can use technology to create and capture value. But there has never been a worse time to be a worker with only ordinary skills and abilities, because computers, robots and other digital technologies are acquiring these skills and abilities at an extraordinary speed. An implied promise of the digital revolution was that it would increase labour productivity and thus would lead to higher pay. This does not seem to have happened on either front: productivity has not grown at the rates expected, and few of the gains have translated into higher wages. In many economies (for example, the Netherlands) the gap between productivity and wage growth has widened over the years, and the situation is even more serious as average wages mask the fact that as real pay for most workers stagnated, income for the highest earners soared. The technological revolution has been accompanied by rising inequality. Workers are 10 | HUMAN DEVELOPMENT REPORT 2015