‘No one left behind’ in the fourth industrial revolution: this is the commitment made by various international organizations including the United Nations and the International Labour Organization. The United Nations 2030 Agenda for Sustainable Development commits to the principles of universality and equality, two fundamental ideas that should be redefined in the context of the digital revolution. How can these principles be ensured in the midst of the profound change produced by technological progress?
The Sustainable Development Goals aim to stimulate sustainable economic development through increased productivity and technological innovation. Specifically, objective number eight, ‘decent work and economic growth’ has defined different targets related to promoting innovation, optimizing productivity, and including young people into the emerging labor market. In this context, it is essential that access to technological innovation is as equitable as possible, in order to avoid the awakening of a potential rejection from those who view themselves as marginalized from said progress.
Rafael Dómenech, Head of Economic Analysis at BBVA research and Javier Andres, Professor of Economics at the University of Valencia, are the authors of the study 'Public Policies in the Age of Digital Disruption,' an article that analyzes the different challenges and opportunities facing society during the current technological transition and how to use different public policy approaches to effectively address these challenges.
Equity and efficiency, synonyms in digital transformation
According to the authors, it is essential to understand that the social impact of new technology will depend on how new challenges are managed. Furthermore, they argue that in this process of change, there is no dichotomy between equity and efficiency. Those societies that are able to create a state of well-being that works efficiently will take better advantage of the new technologies’ potential to create wealth. This is the only recipe for reducing levels of inequality and at the same time ensuring greater intergenerational equality.
There are risks associated with this transformation: unemployment, job polarization, and career instability are examples Dómenech and Andrés cover in their analysis. To avoid these risks, the authors posit that it is essential to foster innovation and growth by removing barriers to job creation and investment. In parallel, reducing uncertainty and increasing legal assurances in the context of labor relations are fundamental. In the new labor market landscape, a balance between flexibility and security will have to be found for workers in new professions and in the new working environments that emerge.
Public policy is the fundamental tool for coordinating the different, multi-faceted interests that are at play in the digital revolution.
Using public policy to optimize the outcome of the fourth revolution
The goal of public policy is to regulate the surplus of production that can result from the digital revolution and ensure no one unduly takes advantage of said surplus.
Education. Education should ensure that human capital is complementary to (and not replaceable by) technology. To this end, soft skills have secured a position as a fundamental area for training, teaching people to work in teams, to lead, and manage other activities. Given the modern era's speed of change, we will have to constantly undertake training or updating of skills, as tasks are automated or deemed obsolete with technological advances.
Work. We have to create the conditions that foster an opportunity-generating job market for those people who have already skilled up for the new digital landscape. Technology itself might help us avoid mismatches between work force supply and demand: big data, according to Domenech and Andrés, is a tool that is capable of building a more efficient job market, one that optimizes profiling for positions and finding the most suitable candidates.
Market competition. Guaranteeing market competitiveness is imperative so that the surplus production delivered by technology reaches everyone and avoids becoming subject to monopolistic interests that block it.
Still, public policy that is successfully implemented in these areas will inevitably have to confront what the authors call the ‘transition cost’— those specific cases where people, countries, or entire sectors need public help in order to weather the technological transition. For example, some occupations may end up obsolete and workers in these areas will have to be re-skilled for other work. To cope with the transition, public policy that redistributes wealth and proposes wealth-balancing fiscal measures will need to be established.
Technology should help us optimize production and work hours, as well as promoting work-life balance and not become an impediment to our personal space. These changes to the way we work and live should enable more sustainable development. Nevertheless, according to the study’s thesis, maintaining optimism in the face of the digital revolution reality requires that we do not lose site of the importance of public policy, a key element in managing the challenges that come hand-in-hand with the current revolution.