We live in a period of rapid technological advancement. The age of intelligent machines promises to offer a better future for all. To realize the pledge, however, smarter policies are needed. As technology reshapes economies, policies will need to be more responsive to change. This should be done in order to capture potential increases in productivity and economic growth while also addressing increasing inequality.
In this write-up, you will get to see the role of AI, the challenges we will face and the steps to overcome those issues. If you are working on a paper on the same topic, you can seek paper help from various online resources. These involve various websites, Google Scholar, blog posts, etc.
Progress of AI, Upcoming Industrial Revolution and Globalization
As artificial intelligence, advanced robotics, and cyber-physical systems take the digital revolution to the next stage, technological change will continue to reshape development. We are already a part of the “Fourth Industrial Revolution.” And globalization has been on par as well, appropriately termed as “Globalization 4.0.” It has been mostly online-based.
But, as of late, technological change has not helped in boosting economical growth and productivity. As per some reports, it has resulted in economic inequality, and has generated fear about unemployment.
However, advancement in technology has the potential to lift productivity and economic growth. For instance, Project Management software, ERP, Cloud Management software help meet deadlines, keep track of the work, coordination, etc. On the other hand, Machine Learning, AI and Data Science are bound to open up new job sectors in the coming days. Thus, the students and engineers must have the necessary skills to be part of the taskforce.
However, technological change is disruptive by nature and necessitates challenging transformations. Policies are extremely important. Regrettably, they have been slow to respond to change’s challenges. Better results are possible with improved and more sensitive policies.
Productivity and Investment Has Taken a Hit
Productivity is the primary driver of long-term economic development. The main driver of productivity growth is technology-enabled innovation. Surprisingly, as emerging technologies have grown in popularity, productivity growth has slowed. Over the last two decades, industrialized economies have averaged less than half the rate of the previous 15 years.
Firms at the technical frontier have seen significant productivity gains, but the effect on overall productivity has been limited. Winners-take-all results have continued to arise as a result of emerging innovations. Market supremacy has risen, market dynamics have become less competitive, and business dynamism has dwindled.
Many global economies have also seen a decline in investment. Despite historically low interest rates, investment has remained slow, raising concerns about the possibility of “secular stagnation.” Frail productivity growth and investment have reinforced each other, and related changes in market structures and dynamics have connected them.
Consequences of Automation
Technology is having a major impact on the labor market. Labor demand is moving away from routine low- to middle-level skills and toward higher-level and more advanced analytical, technological, and managerial skills as a result of automation and digital advances.
However, on the supply side, educating staff in skills that complement emerging technology has lagged, impeding the spread of innovation across economies. Technology has been gaining ground in education and training.
The majority of major economies are confronted with the issue of ageing populations. Many of them are also seeing a plateau in labor force participation rates and basic education attainment of the people. These developments place an even greater emphasis on productivity and the technological advances that drive it to produce economic growth.
Inequality and Challenge in Economic Convergence
Inequality has been increasing in most major economies, such as the United States, experiencing an especially rapid rise. New innovations that benefit capital and higher-level skills have lowered labor’s share of income and raised wage disparity. The new technologies have also been linked to more centralized market systems and dominant firms’ high economic rents.
The distribution of labor and capital income has become more unequal as income has moved from labor to capital. Increased social tensions and political divisiveness have resulted from rising inequality and mounting work anxiety. Nationalist and protectionist rhetoric is on the rise, with a backlash against foreign trade, along with technological change.
Although income inequality has risen within many countries, it has decreased between countries as faster-growing emerging economies close the income gap with developed economies. This economic convergence faces new challenges as a result of technological advancements.
Manufacturing-led growth has been the main driver of convergence in emerging economies, owing to their comparative advantage in labor-intensive manufacturing due to large pools of low-skilled, low-wage jobs. With the automation of low-skill jobs, such competitive advantage is eroding, necessitating the creation of alternative growth paths that are compatible with technological change.
How We Can Take Advantage of the Technological Advancements?
We can fully harness the potential of the new technologies if the innovators and the policymakers work together closely. Reforms must strive to enhance the enabling climate for companies and employees, giving them greater access to opportunities provided by technological change. Policies must also be adopted to mitigate new challenges and issues along the way.
Refurbishment of Competition Policies
As the world of business is transformed by technological change, market policies and institutions must keep up. The competition policies should be updated for the digital era for two particular reasons. This is to ensure that markets continue to provide an open and fair playing field for companies, and check the rise of monopolistic structures.
New regulatory concerns concerning data, the digital economy’s lifeblood, must be addressed. Business resilience would be crucial for adapting to disruptions and systemic shifts brought about by digital transformation.
Encouragement of Wider Economic Impacts
The innovation ecosystem should continue to push the technical envelope while also encouraging broader economic benefits from new developments. With expertise as an intangible commodity being a more essential driver of economic growth, research and development processes and patent regimes should be strengthened. This would help in facilitating wider diffusion of innovations incorporating new knowledge.
Need for Proper Education and Training
Education and training are extremely important to understand the upcoming technology. One needs to be proficient in programming (Python, Java), Big Data, Cloud Computing, AI, etc. As per the statistics, 84% of the businesses mention that AI will enable them to sustain competitive advantage. As you can imagine, new sectors will open up and people having advanced skillset will be hired.
Furthermore, people need to be enlightened regarding the challenges. These involve income inequality, convincing stakeholders and educating the government or concerned authorities regarding the application of the technology. If you are writing a paper on technology, you should mention this point. And you can cite cases like the distribution of the Covid-19 vaccines, the policies that were taken to curb privacy violation by telecom companies, etc.
Investment in education and training must be expanded and redirected to concentrate on the skills required for potential jobs. Programs for staff upskilling and lifelong learning, must be scaled up as the old career path of “learn-work-retire” gives way to one of continuous learning. The secret to winning the race with technology is to compete with machines rather than against them.
Change in Labor Market Policies
Labor market strategies can become more forward-looking, focusing on enhancing workers’ ability to change jobs rather than protecting current jobs. Social security programs, which have historically been focused on structured long-term employer-employee relationships, should be modified to reflect the changing nature of the labor market. The changing nature of work necessitates a realignment of social contracts.
Reform in Tax Systems
The consequences of the transformations occurring in business and employment and the current income distribution patterns should be addressed. This should be carried out when evaluating tax structures in light of the new tax challenges of the digital economy. Taxes on labor, capital, and income are all on the table for future change.
As per some research, we need to consider income supplements other than full-time jobs. Because of the workforce repercussions of new technology, many people will be unable to provide for their families in the future by daily jobs.
One choice is to engage in voluntary work. Even if job opportunities are small, many people volunteer for a variety of public-spirited organizations. They assist others, educate the next generation, and support those who are less fortunate in society.
Hopefully, you have an insight into the challenges of the technological change, and the policies to overcome it. If you wish to explore further, for the sake of writing your paper, you should visit the samples section of the academic service providers. If you wonder, “Who can write my assignment and help me with citations?” you can seek professional assistance.
Author Bio: Claiton Ferro is an AI expert and he has been associated with several reputed companies over the past few years. At present, he is associated with MyAssignmenthelp.com, where he supervises the Machine Learning assignments written by the experts.