Human Development

World Development Report 2019: The Changing Nature of Work

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The World Development Report (WDR) 2019 examines how technological advances are disrupting the
nature of work. These changes are characterized by five elements:

  • Technology is disrupting the nature of firms such that platform-based businesses like Amazon and
    Airbnb are out-competing traditional brick-and-mortar companies like retail stores and hotels.
    Platform companies create a network effect that connects customers, producers, and providers, while facilitating interactions through multisided business models.
  • Technology is reshaping the skills needed for work. While the demand for less-advanced skills is
    declining, it is rising for advanced cognitive, socio-behavioral, and adaptable skills. Therefore, it is
    not just that new jobs are replacing old jobs, but that existing jobs increasingly require a different
    skill set.
  • Threats to jobs from technology are exaggerated and not uniform across income groups. Although
    advanced economies have shed industrial jobs, industrial employment is rising in some developing
    countries (for example, parts of East Asia) and stable in others.
  • In many developing countries, about two-thirds of the workers remain in low-productivity jobs,
    often in informal sector firms whose access to technology is poor. Informality has remained
    remarkably stable despite economic growth and the changing nature of work. Addressing informality and the absence of social protection for workers is a pressing concern for emerging economies.
  • Technology, especially social media, affects perceptions of rising inequality that are often not
    corroborated by the data on income inequality. Increased exposure through digital communications to higher quality of life, different lifestyles, and opportunities heightens these feelings, creates frustrations, and can lead to migration or societal fragmentation.

For societies to benefit from technology’s potential, WDR 2019 has three policy recommendations:

  • Invest in human capital: particularly early childhood education, to develop higher order cognitive
    and socio-behavioral skills in addition to foundational skills.
  • Strengthen social protection: a solid guaranteed social minimum and strengthened social insurance, complemented by reforms in labor market rules in some emerging economies.
  • Create fiscal space for investments in human capital development and social protection: strengthen
    underused tax instruments, combined with eliminating tax avoidance and improving tax

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