African Development Bank
African Development BankAsian Development BankEuropean Bank for Reconstruction and DevelopmentInter-American Development Bank
AfDB, ADB, EBRD, IDB (African Development Bank, AsianCopyright 2018AfricanDevelopmentDevelopment Bank, European Bank for Reconstruction andDevelopmentBank,Development, Inter-American Development Bank). 2018.Reconstruction, Inter-American Development Bank (jointlyThe Future of Work: Regional Perspectives.referred as the BankforWashington, DC.This work is licensed under a Creative Commons IGO 3.0Cataloging-in-Publication data provided by theAttribution-NonCommercial-NoDerivatives (CC-IGO BY-NC-NDInter-American Development Bank3.0 IGO) license (https://creativecommons.org/licenses/by-nc-Felipe Herrera Librarynd/3.0/igo/legalcode) and may be reproduced with attributionThe future of work: regional perspectives / African Developmentto the Co-publishers and for any non-commercial purpose. NoBank, Asian Development Bank, European Bank for Reconstructionderivative work is allowed. Any dispute related to the use of theand Development, Inter-American Development Bank. p. cm. —works of the Co-publishers that cannot be settled amicably shall(IDB Monograph; 605) Includes bibliographic references. 1. Work-be submitted to arbitration pursuant to the UNCITRAL rules. TheForecasting. 2. Labor market-Effect of technological innovationsuse of the Co-publishers’ names for any purpose other than foron. 3. Labor market-Effect of automation on. 4. Employmentattribution, and the use of Co-publishers’ logos shall be subjectforecasting. I. African Development Bank. II. Asian Developmentto a separate written license agreement between the Co-Bank. III. European Bank for Reconstruction and Development.publishers and the user and is not authorized as part of this CC-IV. Inter-American Development Bank. Labor Markets Division. V.IGO license. Note that link provided above includes additionalInter-American Development Bank. Office of Strategic Planningterms and conditions of the license.and Development Effectiveness. VI. Serie.IDB-MG-605
Terms, names boundaries, colors and denominations used inPhotographythis report or any of its maps to refer to geographical or otherterritories, political and economic groupings and units, doAFRICAN DEVELOPMENT BANKnot constitute and should not be construed as constituting Photography: Shutterstockan express or implied position, endorsement, acceptance orexpression of opinion by the co-publishers or its membersASIAN DEVELOPMENT BANKconcerning the status of any country, territory, grouping Photography: Asian Development Bank.and unit, or delimitation of its borders, or sovereignty. ADBrecognizes “China” as the People’s Republic of China, “Korea”EUROPEAN BANK FORas the Republic of Korea, and “Vietnam” as Viet Nam. InRECONSTRUCTION AND DEVELOPMENTaddition, ADB recognizes “Russia” as the Russian Federation. Photography: European Bank for ReconstructionThe opinions expressed in this publication are those ofand Development, Dermot Doorly, iStock Photos.the authors and do not necessarily reflect the views of theCo-publishers, their Board of Directors, Board of Governors,INTER-AMERICAN DEVELOPMENT BANKor the countries they represent. ADB does not guarantee the Photography: iStock Photosaccuracy of the data included in this publication and acceptsno responsibility for any consequence of their use. The mentionof specific companies or products of manufacturers doesnot imply that they are endorsed or recommended by ADB inpreference to others of a similar nature that are not mentioned.
AcknowledgmentsThe Future of Work: Regional Perspectives is a jointChapter 4: Elisabetta Gentile, Rana Hasan, and Sameereffort of the African Development Bank (AfDB), theKhatiwadaAsian Development Bank (ADB), the European Bank forReconstruction and Development (EBRD), and the Inter-Chapter 5: Dulce Baptista, Mariano Bosch, Manuel GarcíaAmerican Development Bank (IDB), endorsed by theirHuitron, Daniel Jaar Michea, Carlos Ospino, Carmen Pagés,presidents.Laura Ripani, and Graciana RucciThe principal authors of each individual chapter are asThis study was made possible by the leadership and generalfollows:coordination of Kapil Kapoor (AfDB), Jiro Tominaga (ADB),Alexia Latortue (EBRD), Carmen Pagés (IDB), and PabloChapter 1: Nikola Milushev and Carmen PagésPereira Dos Santos (IDB). Editorial production of this volumewas led by Andrés Gómez-Peña and Nancy Morrison.Chapter 2: Kapil Kapoor, Hassanatu Mansaray, LauraGraphic design and layout was led by Lina María Botero inSennett, Oscar Pitti Rivera, Antonio Ocana Marin, and thecollaboration with Carlos Bernal. Marcelo Cabrol, managerAfrican Centre for Economic Transformationof the IDB’s Social Sector, and Luis Miguel Castilla, managerof the IDB’s Office of Strategic Planning and DevelopmentChapter 3: Bandini Chhichhia, Sergei Guriev, Alexia Latortue,Effectiveness, provided valuable guidance and adviceNikola Milushev, Alexander Plekhanov, and Valerijs Rezvijsthroughout the life of this project.
ContentsForewordviChapter 1The Future of Work in Emerging and Developing Economies1Chapter 2The Future of Work in Africa29Chapter 3The Future of Work in Developing Asia49Chapter 4The Future of Work in Emerging Europe, Central Asia,and Southern and Eastern Mediterranean71Chapter 5The Future of Work in Latin America and the Caribbean89
vi ForewordForewordThe “Future of Work” is currently one of the mostThis study, The Future of Work: Regional Perspectives,popular terms searched on Google. Many technologicalfocuses on the likely repercussions of this major trendbreakthroughs are rapidly shifting the frontier betweenin developing and emerging economies in Africa; Asia;activities performed by humans and the ones performedEastern Europe, Central Asia, and Southern and Easternby machines, transforming the world of work.Mediterranean; and Latin America and the Caribbean. It is aMany studies and initiatives are examining whatjoint effort of the four main regional development banks: thethese changes mean for our work, our incomes, ourAfrican Development Bank, the Asian Development Bank,children’s futures, our companies, and our governments.the European Bank for Reconstruction and Development,Most of them do so from the perspective of advancedand the Inter-American Development Bank.economies. Much less work has been done from theThis study highlights the opportunities that changesperspective of developing and emerging economies. Yetin the dynamics of work might create for our regions.differences in the spread of technology, economic andTechnological progress could allow the countries wedemographic structures, education levels, and migrationwork with to grow faster and attain higher standards ofpatterns greatly affect the way in which these changesliving more rapidly than ever before. In fact, we argue thatmight affect developing and emerging countries.the biggest risk for many countries would be to miss out
The Future of Work: Regional Perspectives viion this revolution. What matters is how well countriesKapil Kapoorprepare to take advantage of these changes to maximizeDirector, Strategy and Operational Policiesthe opportunities, while addressing the likely risks andAFRICAN DEVELOPMENT BANKchallenges. Appropriate responses at the level of theindividual, the enterprise, and the government are needed.Yasuyuki SawadaThis study explores some of these responses.Chief Economist and Director, General EconomicWe are delighted to present this report to the policymakers, companies, and individuals of our memberResearch and Regional Cooperation DepartmentASIAN DEVELOPMENT BANKcountries. We hope that, armed with the knowledgepresented here, and with the support of our institutions,Alexia Latortuewe can, together, foster a better future of work for all theManaging Director, Corporate Strategypeoples of our regions.EUROPEAN BANK FOR RECONSTRUCTIONAND DEVELOPMENTMarcelo CabrolManager, Social SectorINTER-AMERICAN DEVELOPMENT BANK
8 Chapter 1
The Future of Work: Regional Perspectives 1Chapter 1The Future ofWork in Emergingand DevelopingEconomiesTechnological progress provides a golden opportunity foremerging and developing economies to grow faster andattain higher levels of prosperity in a shorter span of time.However, there are fears that technologies could potentiallydisplace human labor, widen income inequality, and furtherincrease the share of informal or contingent work. Whileanxiety about technological change has existed since thedawn of the industrial age, until recently new economicactivities more than compensated for technology-inducedunemployment. Current disruptive technology changes,however, raise concerns that this time could be different.
2 Chapter 1The impact of technological change on the future of work will differ acrossemerging markets and developing economies depending on demographictrends, patterns of international trade, the prevalence of the informal economy,and other conditions. Ultimately, how these changes play out and whether thebenefits in terms of income, health, flexibility, or new jobs will outweigh the costswill depend on the policies that countries undertake to take advantage of thesetechnologies, mitigate their adverse effects, and share benefits among the wholepopulation. Fulfilling the promises of technological change while mitigatingthe associated risks calls for thorough public debate and collective action ofgovernments, regulators, the private sector, and international organizations.The Changing Nature of WorkRapid technological progress increases the potential of boosting economic growth andraising prosperity across the world. The confluence and rapid development of a wide rangeof new technologies, such as artificial intelligence, robotics, 3D printing, the Internet ofThings, biotechnology, and blockchain, is known as the Fourth Industrial Revolution (4IR)(see Box 1.1) Rapid technological progress can significantly boost economic growth at a timewhen productivity growth has slowed in many parts of the world (McKinsey Global Institute,2018). It can yield important efficiency gains within companies. It can also accelerate theprocess of structural transformation by which countries grow by shifting labor from lowproductivity activities, often in agriculture, to higher-productivity activities, mostly in themanufacturing and the service sectors. Such growth is essential to provide the resources tocontinue improving economic, social, and environmental outcomes, as well as to speed upthe convergence of incomes of emerging economies with developed countries.
The Future of Work: Regional Perspectives 3Box 1.1 The Fourth Industrial Revolution (4IR)A number of recent technological breakthroughs—especially in artificial intelligence (AI),machine learning, and robotics—are unleashing new capabilities and fundamentally changingthe nature of work. These new technologies are complementing as well as replacing workers.They hold the promise of higher productivity and greater safety. This technological revolutionis being referred as the Fourth Industrial Revolution (4IR).The 4IR technologies present challenges and opportunities. The key opportunitiesinclude improvements in productivity. Consumer surplus (savings) could increase as goodsare delivered more cheaply. This surplus, in turn, could drive demand for new services andthus encourage entrepreneurship (and new jobs).On the other hand, 4IR technologies are likely to eliminate many jobs, especially middleincome jobs, and further entrench inequality by disproportionately rewarding owners ofcapital and skills over owners of labor. The rapid changes that are being driven by thesetechnologies are also increasing uncertainty and making it harder for businesses and policymakers to plan.The impact of 4IR technologies has been a subject of study, particularly because of concernsabout job losses. As noted, 4IR technologies are likely to alter society in various ways: 3D printing is pointing to the end of the factory model of production and may heralda return to a form of cottage industries seen in the past. Industry boundaries are becoming blurred as technologies allow companies to moreeasily venture into other industries. For instance, Google is developing autonomouscars while Tesla, a car company, sees itself as an energy company. Traditional notions of work are being rethought, particularly with work beingincreasingly defined by what people do rather than where they do it. For example,a. One car in a sharingbusiness will continue to connect and collaborate remotely with freelancers andeconomy removes 22independent professionals through digital talent platforms.cars from the road—aThe digital platform is upending assumptions that have underpinned economicfact based on the currentpolicy. The sharing economy is moving from the concept of ownership to concept ofownership model in whichbuying a service. Car companies, for instance, are more unlikely to sell cars in thea car spends 93 percent offuture but rather offer a transport service.its lifetime idle.a
4 Chapter 1However, there are fears that technologies couldperiod with very different initial conditions. Differences inpotentially displace human labor, widen income inequality,demography, access to broadband, workforce skill levels, orand further increase the share of informal or contingent work.the availability of safety nets create important differences inNews of fully automated stores, warehouses, or automobilesthe velocity at which technological progress spreads acrossthat do not require the intervention of humans have ignitedregions as well as its effects on populations. While therefears that technology will create mass labor dislocation,is growing research about the future of work in developedincreasecontinueeconomies, relatively less has been discussed from thewidening inequality and polarizing the labor market intoperspective of developing and emerging countries (Chandy,good jobs (stable jobs with benefits)—those that develop or2017). This volume explores the benefits and risks broughtadopt technology—and precarious jobs. This prospect mightby this new technological wave from the perspective ofeven be more worrisome for many emerging and developingthe member countries of the four multilateral developmentcountries where labor forces are rapidly growing in relationbanks spanning Central, Eastern, and South-Eastern Europe,to the overall population, raising concerns that in the futureCentral Asia, and the Southern and Eastern Mediterranean;not enough jobs will be created to employ these bulgingAsia; Africa; and Latin America and the Caribbean. Theworking-age populations.chapters consider the specific interplay of ly, technological progress has not createddemographics, and economic and social policies in thesetechnological unemployment. If history is any guide, newregions, and focus on how these forces can shape the futuretechnologies have eliminated some jobs and substituted forof work.some tasks formerly performed by humans, but they havealso enabled the creation of many new jobs powered bygrowing incomes and the emergence of new occupations.The New World of Workin Historical ContextBut many people are asking whether this time will beAt least two developments characterize the new worlddifferent. Because technology is encroaching on many tasksof work. First, the confluence of new and rapidly evolvingthat were formerly though to be out of reach of machines,technological breakthroughs is increasing the potential forand because technological growth could itself be affectingautomation. Second, the way people are working is alsothe mechanisms by which income growth translates intorapidly evolving as technology is connecting people to jobsincreased demand for human work, history might notand income opportunities in new ways.repeat itself (Brynjolfsonn and McAfee, 2014; Susskind andSusskind, 2015).Anxiety about the impact of rapid technological progresson work and livelihoods has been a fact of life since the dawnAnother important question is the extent to which theof the industrial age. In the early nineteenth century, weavingeffects of this wave of technological change will differcraftsmen in England, the Luddites, set out to break machinesacross different regions of the world, which enter thistaking over their jobs. About a decade later, in 1817, David
The Future of Work: Regional Perspectives 5Ricardo wrote that the “discovery and use of machinery willcould be in low-pay occupations with no benefits andbe injurious to the laboring class, as some of their number willunstable working conditions. In addition, technology itselfbe thrown out of employment, and population will becomemay be affecting the way rising incomes create demand forredundant ” His writings sound remarkably current nearlyhuman labor, as machines could increasingly produce thetwo centuries later (Ricardo, 1817).excess demand for goods and services caused by risingA contemporary of Ricardo, Thomas Malthus, sounded theincomes (Susskind and Susskind, 2015).alarm on another trend: the demographic pressure on economicYet, while initial estimates suggested a large potentialwell-being (Malthus, 1798). Ever since the writings of Malthusfor automation, new estimates are less pessimistic. Initialand Ricardo, the interplay of technology and demography andestimates based on the potential of automating occupationstheir impact on employment, economic growth, and educationindicated that a large percentage of jobs could behave been at the forefront of the public debate.automated in the coming years, given current technologies.Successive waves of technological and demographicThis methodology indicated that 47 percent of all personschange have led to large-scale, often painful disruptions.employed in the United States were working in jobs thatYet new technology has always brought about newcould be performed by computers and algorithms within theeconomic activities that more than compensated for thenext 10 to 20 years (Frey and Osborne, 2017). Based on thelost occupations, on balance (Acemoglu and Restrepo,same methodology, World Bank estimates suggest an even2017). Technological progress has boosted productivity andhigher potential for automation in developing countries, onexpanded incomes, which in turn have raised the demandthe order of 60 percent to 70 percent (World Bank, 2016).for goods and services. This, in turn, has created entirelyRecent studies however, indicate that such figures maynew industries and jobs, providing employment for a rapidlyoverestimate the potential job losses due to automationgrowing world population and raising average incomes.because only certain tasks or activities within an occupationThese trends were particularly pronounced and widelyare at high risk of automation. Once this is accounted for,shared across the social spectrum in the twentieth century,only a relatively small percentage of jobs (on the orderwhen job creation was mostly concentrated in middle-classof 5 percent to 10 percent) can be fully automated givenoccupations.current technologies. Nonetheless, at least 30 percent ofDespite the evidence that in the past technologicalthe activities in another 60 percent of occupations could beprogress has never failed to generate new employment, manyautomated with technologies currently available (McKinseyvoice concerns that this time around could be different. Th eGlobal Institute, 2017b; Armtz, Gregory, and Zierahn, 2016).sheer pace of technological change allows less time for newThese figures suggest that while some occupations willjobs to emerge and could outpace the ability of large sectionsdisappear, many occupations will be largely transformed inof the workforce to re-educate and retrain (McKinsey Globalthe coming years. This is a proc
The Future of Work: Regional Perspectives is a joint effort of the African Development Bank (AfDB), the . such as artificial intelligence, robotics, 3D printing, the Internet of Things, biotechnology, and blockchain, is known as the Fourth Industrial Revolution (4IR) . The 4IR technologies present
Northern Bank & Trust Co. Patriot Community Bank People's United Bank Pilgrim Bank Radius Bank RTN Federal Credit Union Santander StonehamBank TD Bank The Cooperative Bank The Savings Bank The Village Bank Walpole Cooperative Bank Wellesley Bank Winchester Co-operative Bank Abington Bank Bank of Canton Blue Hills Bank Boston Private Bank & Trust
M/s G.M. Kapadia & Co., Chartered Accountants Bankers HDFC Bank Ltd. (Primary Banker) Axis Bank Ltd. Bank of Baroda Bandhan Bank Ltd. Citibank N.A. CSB Bank Ltd. DCB Bank Ltd. Deutsche Bank ESAF Small Finance Bank ICICI Bank Ltd. IDFC Bank Ltd. Indian Bank RBL Bank Ltd. Saraswat Co-op Bank Ltd. State Bank of India Suryoday Small Finance Bank Ltd.
10. HDFC Bank Limited 11. ICICI Bank Ltd 12. Indian Overseas Bank 13. ING Vysya Bank 14. Kotak Bank -Virtual card 15. Shivalik Bank 16. Standard Chartered Bank 17. State Bank of Bikaner and Jaipur 18. State Bank of India 19. State Bank of Mysore 20. State Bank of Travencore 21. Syndicate Bank 22. The Federal Bank Ltd 23. The Karur Vysya Bank Ltd
commerce bank eastern bank-east west bank everbank firstbank first hawaiian bank-first horizon bank firstmerit bank-first national of. nebraska first niagara flagstar bank f.n.b.corp. frost national bank fulton financial hancock bank iberiabank m b financial new york community banks old national, bank one west bank people's united bank raymond .
State Bank of India State Bank of Mysore State Bank of Patiala State Bank of Travancore Syndicate Bank Tamilnadu Mercantile Bank TNSC Bank UCO Bank Union Bank of India United Bank of India Vijaya Bank YES Bank . Instruction to follow during first time use of Karur Vysya
Access Bank Acleda Bank Agricultural Bank of China ANZ Arab International Bank Banco Sabadell Bank ABC Bank Alfalah Bank Islam Brunei Darussalam Bank of America Bank of Baroda Bank of China BankUnited Banorte Barclays BBVA Belsize BMCE Bank BMO Capital Markets BNL - BNP Paribas BNP Paribas BNY Mellon Bpifranc
Bank of Baroda. 31: Bank of Beirut (UK) Limited . 32: Bank of China. 33: Bank of Communications (UK) Limited. 34: Bank of Cyprus UK Limited. 35: Bank of East Asia Limited. 36: Bank of India. 37: Bank of Montreal . 38: Bank of New York Mellon (UK Group) 39: Bank of Nova Scotia, The . 40: Bank of Taiwan - Lon
Deka Bank Deutsche Girozentrale Deutsche Bank AG DNB Bank ASA DZ BANK AG Helaba (Landesbank Hessen-Thüringen) HSBC ICBC (London) plc ING Bank Intesa Sanpaolo Investec Bank plc KBC Bank KfW IPEX-Bank KommunalKredit Austria AG Landesbank Baden-Württemberg (LBBW) Macquarie Group mBank SA Mizuho Bank National Australia Bank National Bank of Abu Dhabi
