October 12, 2018
Work is constantly reshaped by technological progress. New ways of production are adopted, markets expand, and societies evolve. But some changes provoke more attention than others, in part due to the vast uncertainty involved in making predictions about the future. The 2019 World Development Report studies how the nature of work is changing as a result of advances in technology today.
While technology improves overall living standards, the process can be disruptive. A new social contract is needed to smooth the transition and guard against rising inequality. As a first priority, significant investments in human capital throughout a person’s life are vital to this effort. If workers are to stay competitive against machines they need to be able to retool existing skills or be better trained from the start.
More information and better measurement of human capital is needed. How much human capital can a child born today expect to attain by the end of secondary school, given the risks of poor health and poor education that prevail in the country where she was born? The World Bank’s recently-launched Human Capital Project (HCP), seeks to answer this question through a new global benchmark—the Human Capital Index (HCI). The HCP is also comprised of a program of measurement and research to inform policy action, and a program of support for country strategies to accelerate investment in human capital.
In addition to investments in human capital, the changing nature of work demands updates to social protection systems. Traditional provisions of social protection based on steady wage employment, clear definitions of employers and employees, as well as a fixed point of retirement become increasingly obsolete. Improved private sector policies to encourage startup activity and competition can also help countries to compete in the digital age.
Governments will need additional revenues to fund the investments demanded by the changing nature of work. Governments can create fiscal space through a mix of additional revenues from existing taxes (increases in rates or widening of the tax base), the introduction of new taxes, and improvements in tax administration.
The 2019 World Development Report presents an analysis of these issues based upon the available evidence. And, for the first time, the World Bank is preparing that analysis in a transparent manner. The Report’s authors share the draft on a weekly basis so that you can follow along as they write and rewrite, responding to new information and ideas as they reach the team.