Learning Activity #1

An Interactive Map of the Worlds Wealth  The world map depicted by Ferreras (2016) is interactive.  Click on the various categories to see how the map changes shapes.

Compare the map of the World Median Ages and the map of Wealth Distribution.  Draw as many conclusions about this information as you can and then think about what that means for the business leader today.  How would they select products, markets, leaders and managers to work for the company?  Support your ideas, reasoning and conclusions with the course material.

https://www.huffingtonpost.ca/2016/07/23/world-map-wealth_n_11145122.html

 

07/23/2016 11:39 EDT | Updated 07/25/2016 11:00 EDT

A World Mapped According To Wealth Looks Very Different

·

·

·

· Jesse FerrerasThe Huffington Post Canada

 

Any map of the world shows what it looks like by land size.

They simply don’t capture how much power individual countries wield, financially or otherwise.

Enter Max Galka. The New York-based data visualizer has designed an interactive map showing precisely how the world would change if it were shaped by factors besides land.

Galka last year published the above map of the world and allowed users to rearrange its geography according to factors including GDP, wealth, population and the number of billionaires.

It was recently the subject of reporting by the World Economic Forum (WEF).

The forum noted that adjusting the map to reflect GDP gives a stunning image of the size of the United States economy. China’s economy also looms large.

But the truly stunning map takes account of global wealth. The U.S. has $83.7 trillion worth of wealth, accounting for 31.7 per cent around the world. So the U.S. looks enormous in the map, as does Japan, compared to its actual size.

Galka obtained his population and wealth data from Credit Suisse’s 2014 Global Wealth Report, while info about GDP, debt and births came from The World Factbook.

Billionaire info, meanwhile, was derived from the Wealth-X/UBS Billionaire Census.

It’s a fascinating look at how much wealth you can find in certain countries … and how little elsewhere.

 

Week 3: Leadership Challenges – Globalization

Globalization has had a historical impact on the business community leaving in its wake several challenges for a business leader.  Going forward in the next few weeks, we will examine in depth the leadership challenges that result from cross-culture management and customer expectations.  Take a few minutes to read the following article on management trends in the 21st century.

 

The Five Most Prominent Management Trends of the 21st Century

 

 

Theme #1: How has globalization effected the business environment?

 

“In Globalization 1.0, which began around 1492, the world went from size large to size medium. In Globalization 2.0, the era that introduced us to multinational companies, it went from size medium to size small. And then around 2000 came Globalization 3.0, in which the world went from being small to tiny.”                           

Thomas Friedman

Globalization is the biggest byproduct of the technology revolution. It has shaped the world marketplace and has helped people work faster.

Theme One explores how globalization has affected and will affect the way we conduct business.

 

Watch: https://www.youtube.com/watch?v=E4-MyLj-LdE

https://www.youtube.com/watch?v=U8oHyk2kyI4

 

 

The Positives and Negatives of Globalization

 

As stated and summarised above, globalization is a modern concept referring to the development of a particular commodity, to make possible international influence or operation. This can be reflected in either a positive, or negative way.

If you were to rummage through your wardrobe or set of draws, guaranteed 90% of the time you could pick up any one shirt and identify another country specified on that loosely hung tag at the rim. Generally stating, and most often something like ‘Made in China’. What’s more than that, before it reached your average retail store, where you would’ve found that authentic blue shirt, it could have very well been made with Chinese cotton, sewed by Thai hands, shipped across the Pacific on a French freighter crewed by Spaniards, to a Los Angeles harbor. This is fine example of what globalization is and means to the world, many could interpret this as a positive or negative thing.

 

For years there has been ongoing debates on whether ‘globalization’ is a good or bad thing. However, what we are certain of, is that globalization is still occurring and will continue to occur until the end of time. The following list of positives and negatives below, are not in order to confirm your opinion or belief, but to obtain a good sense of the bigger picture.

 

Positives of Globalization

·            As Western society is becoming more knowledgeable of the issues taking place in developing countries, there is greater opportunity for the people in those countries to economically succeed and increase their standard of living.

·            `Increase in competition, forces companies to lower their prices. This benefits the end consumers.

·            Increase in media coverage draws the attention of the world to human right violations. This leads to improvement in human rights.

•       Global competition encourages creativity and innovation and keeps prices for commodities/services in check.

•       Developing countries are able to reap the benefits of current technology without undergoing many of the growing pains associated with development of these technologies.

•       Governments are able to better work together towards common goals now that there is an advantage in cooperation, an improved ability to interact and coordinate, and a global awareness of issues.

•       There is a greater access to foreign culture in the form of movies, music, food, clothing, and more. In short, the world has more choices.

Negative of Globalization

·            The benefits of globalization is not universal. The rich are getting richer and the poor are becoming poorer.

•       Outsourcing, while it provides jobs to a population in one country, takes away those jobs from another country, leaving many without opportunities.

•       Although different cultures are able to interact and share there ideas and innovations, everything is beginning to meld, and their becomes a loss of tradition and culture.

•       There may be a greater chance of disease spreading worldwide, as well as invasive species that could prove devastating in non-native ecosystems.

•       There is little international regulation, an unfortunate fact that could have dire consequences for the safety of people and the environment.

•       Fast food chains, such as Mcdonalds and Burger King, are spreading in the developing world. Meaning more consumption of junk foods from these joints resulting in an adverse impact on people’s health.

 

May 6, 2015, 03:06pm Mike Collins Contributor

 

The Pros And Cons Of Globalization

A story in the Washington Post said “20 years ago globalization was pitched as a strategy that would raise all boats in poor and rich countries alike. In the U.S. and Europe consumers would have their pick of inexpensive items made by people thousands of miles away whose pay was much lower than theirs. And in time trade barriers would drop to support even more multinationals expansion and economic gains while geo political cooperation would flourish.”

There is no question that globalization has been a good thing for many developing countries who now have access to our markets and can export cheap goods. Globalization has also been good for Multi-national corporations and Wall Street. But globalization has not been good for working people (blue or white collar) and has led to the continuing deindustrialization of America.

Globalization is a complicated issue. It is necessary to evaluate the pros and cons before drawing any conclusions.

Pros

Supporters of globalization argue that it has the potential to make this world a better place to live in and solve some of the deep-seated problems like unemployment and poverty.

1. Free trade is supposed to reduce barriers such as tariffs, value added taxes, subsidies, and other barriers between nations. This is not true. There are still many barriers to free trade. The Washington Post story says “the problem is that the big G20 countries added more than 1,200 restrictive export and import measures since 2008

2. The proponents say globalization represents free trade which promotes global economic growth; creates jobs, makes companies more competitive, and lowers prices for consumers.

3. Competition between countries is supposed to drive prices down. In many cases this is not working because countries manipulate their currency to get a price advantage.

4. It also provides poor countries, through infusions of foreign capital and technology, with the chance to develop economically and by spreading prosperity, creates the conditions in which democracy and respect for human rights may flourish. This is an ethereal goal which hasn’t been achieved in most countries

 

5. According to supporters globalization and democracy should go hand in hand. It should be pure business with no colonialist designs.

6. There is now a worldwide market for companies and consumers who have access to products of different countries. True

7. Gradually there is a world power that is being created instead of compartmentalized power sectors. Politics is merging and decisions that are being taken are actually beneficial for people all over the world. This is simply a romanticized view of what is actually happening. True

8. There is more influx of information between two countries, which do not have anything in common between them. True

9. There is cultural intermingling and each country is learning more about other cultures. True

10. Since we share financial interests, corporations and governments are trying to sort out ecological problems for each other. – True, they are talking more than trying.

11. Socially we have become more open and tolerant towards each other and people who live in the other part of the world are not considered aliens. True in many cases.

12. Most people see speedy travel, mass communications and quick dissemination of information through the Internet as benefits of globalization. True

13. Labor can move from country to country to market their skills. True, but this can cause problems with the existing labor and downward pressure on wages.

14. Sharing technology with developing nations will help them progress. True for small countries but stealing our technologies and IP have become a big problem with our larger competitors like China.

15. Transnational companies investing in installing plants in other countries provide employment for the people in those countries often getting them out of poverty. True

16. Globalization has given countries the ability to agree to free trade agreements like NAFTA, South Korea Korus, and The TPP. True but these agreements have cost the U.S. many jobs and always increase our trade deficit

Cons

• The general complaint about globalization is that it has made the rich richer while making the non-rich poorer. “It is wonderful for managers, owners and investors, but hell on workers and nature.”

• Globalization is supposed to be about free trade where all barriers are eliminated but there are still many barriers. For instance161 countries have value added taxes (VATs) on imports which are as high as 21.6% in Europe. The U.S. does not have VAT.

• The biggest problem for developed countries is that jobs are lost and transferred to lower cost countries.” According to conservative estimates by Robert Scott of the Economic Policy Institute, granting China most favored nation status drained away 3.2 million jobs, including 2.4 million manufacturing jobs. He pegs the net losses due to our trade deficit with Japan ($78.3 billion in 2013) at 896,000 jobs, as well as an additional 682,900 jobs from the Mexico –U.S. trade-deficit run-up from 1994 through 2010.”

• Workers in developed countries like the US face pay-cut demands from employers who threaten to export jobs. This has created a culture of fear for many middle class workers who have little leverage in this global game

• Large multi-national corporations have the ability to exploit tax havens in other countries to avoid paying taxes.

• Multinational corporations are accused of social injustice, unfair working conditions (including slave labor wages, living and working conditions), as well as lack of concern for environment, mismanagement of natural resources, and ecological damage.

• Multinational corporations, which were previously restricted to commercial activities, are increasingly influencing political decisions. Many think there is a threat of corporations ruling the world because they are gaining power, due to globalization.

• Building products overseas in countries like China puts our technologies at risk of being copied or stolen, which is in fact happening rapidly

• The anti-globalists also claim that globalization is not working for the majority of the world. “During the most recent period of rapid growth in global trade and investment, 1960 to 1998, inequality worsened both internationally and within countries. The UN Development Program reports that the richest 20 percent of the world’s population consume 86 percent of the world’s resources while the poorest 80 percent consume just 14 percent. “

• Some experts think that globalization is also leading to the incursion of communicable diseases. Deadly diseases like HIV/AIDS are being spread by travelers to the remotest corners of the globe.

• Globalization has led to exploitation of labor. Prisoners and child workers are used to work in inhumane conditions. Safety standards are ignored to produce cheap goods. There is also an increase in human trafficking.

• Social welfare schemes or “safety nets” are under great pressure in developed countries because of deficits, job losses, and other economic ramifications of globalization.

Globalization is an economic tsunami that is sweeping the planet. We can’t stop it but there are many things we can do to slow it down and make it more equitable.

What is missing?

Leadership – We need politicians who are willing to confront the cheaters. One of our biggest problems is that 7 of our trading partners manipulate their currencies to gain unfair price advantage which increases their exports and decreases their imports. This is illegal under WTO rules so there is a sound legal basis to put some kind of tax on their exports until they quit cheating.

Balanced Trade – Most of our trading partners can balance their trade budgets and even run a surplus. We have not made any effort to balance our trade budget and have run a deficit for more than 30 years resulting in an $11 trillion deficit. The trade deficit is the single biggest job killer in our economy, particularly manufacturing jobs. We need the government to develop a plan to begin to balance our trade deficit even though this is not a political priority in either party.

Trade Agreements – Both the NAFTA and the South Korean Korus trade agreements might have been good for Wall Street and the multi-national corporations but they eliminated jobs in America and expanded our trade deficit. The upcoming Trans Pacific Trade Agreement will do the same thing and Congress should not fast track this bad agreement for a dozen reasons.

Enforcing the rules – China ignores trade rules and WTO laws with reckless abandon. Besides currency manipulation they subsidize their state owned companies to target our markets, and provide funding to their state owned companies that dump their products in America. They also steal our technologies, sell counterfeit versions of our products, and impose tariffs and other barriers anytime they want – as we do nothing to stop them. China does not deserve to be on our most favored nation list and we need to tax their exports to us until they stop these illegal activities.

What is good for third world countries, like Kenya, or countries with tremendous growth, like China, has not been good for American workers. Globalization is deindustrializing America as we continue to outsource both manufacturing blue collar and white collar jobs. Supporters of globalization have made the case that it is good because it has brought low priced imported goods, but they have not matched the decline of wages in the middle class and will not offset the loss of many family wage jobs

Globalization is like being overwhelmed by a snow avalanche. You can’t stop it – you can only swim in the snow and hope to stay on top. I would like to make the argument that the US should try a lot harder to swim in the snow and stay on top. We can’t stop globalization but there are many policies and strategies we can use to make it more equitable. We can enforce the trade laws, force the competition to play by the same rules, and stop giving our competitors the tools (technology and R& D) to ultimately win the global war.

 

In The New Globalized Diet, Wheat, Soy And Palm Oil Rule

March 4, 20143:50 AM ET DAN CHARLES

 

These days you can fly to far corners of the world and eat pretty much the same food you can get back home. There’s pizza in China and sushi in Ethiopia.

A new scientific study shows that something similar is true of the crops that farmers grow. Increasingly, there’s a standard global diet, and the human race is depending more and more on a handful of major crops for much of its food.

At the same time, all over the world, people are eating a bigger variety of foods. But until now, no one had crunched the numbers to see whether global diets were overall getting less — or more — diverse.

“We wanted to know, really, how many crops feed the world, and what’s happening with them,” says Colin Khoury, a visiting researcher at the International Center for Tropical Agriculture, or CIAT, in Cali, Colombia.

Khoury and his collaborators went through 50 years of data collected by the United Nations’ Food and Agriculture Organization. And they uncovered two big trends.

 

The first: “Hey, actually, there’s places where diets are diversifying, where they’re adding crops,” says Khoury.

In parts of Asia, such as China, rice is a declining portion of the average person’s diet as they add other foods that are now more available. In the U.S., meanwhile, people are eating more imported foods, like mangoes and coconut water.

But here’s the second discovery: Those bigger menus of food also are getting more and more similar to each other, from Nanjing to Nairobi. Everybody is relying more and more heavily on a few dozen global megafoods.

Many of those foods are part of what you’d call a standard Western diet, including wheat, potatoes and dairy. But other megacrops come from the tropics, such as palm oil. “It’s grown on a large scale in Malaysia and Indonesia, but it’s become a global commodity in diets essentially everywhere,” says Khoury.

 

Smaller crops, meanwhile, are getting pushed aside. Sorghum and millet, for instance, are grown quite widely around the world, but they’re losing out to corn and soybeans. Other small crops that you only find in certain areas could disappear altogether.

“In the Andes, aside from the potato, most of the rest of the traditional roots and tubers, crops like oca and maca, are declining in the amount of production and the amount of consumption,” says Khoury.

A lot of things are driving this trend, he says. There’s a rise in international trade, but also “people moving to cities, having more access to supermarkets, to fast food, having less time to cook, not having gardens.”

The trend toward greater dependence on fewer crops continues, Khoury says. And so do the risks. It’s dangerous to depend on just a few crops, because any one of them could be hit by some disaster, such as disease.

But governments and international organizations can still help to safeguard diversity in food sources. They can act to preserve the many genetic varieties of megacrops that still exist, and also preserve and encourage cultivation of minor crops, he says.

Rachel Laudan, a historian at the University of Texas and author of Cuisine and Empire: Cooking in World History, says it’s important to remember that what drives the rise and fall of crops is demand for them after they’ve been transformed into something mouth-watering. “They’re only interesting if they’ve been processed in some way,” she says.

Think of all the things people do with wheat, she says. “You can get bread. You can get flatbread. You can get cakes. You can get pie. You can get beer!”

That’s what turned wheat into a megacrop. Root crops, by contrast, were difficult to store, transport or process into interesting foods.

We could still turn some of these minor crops into attractive foods if there’s enough interest in them, she says. In fact, interest may be reviving.

Consumers in the U.S. and Europe are snapping up little-known tropical fruits and so-called ancient grains, like farro and quinoa. Perhaps some of those minor crops can get their own spot on the global menu.

 

The future of work in the developing world

Laurence Chandy Tuesday, January 31, 2017

 

The twin forces of technological change and globalization are reshaping the global economy in multiple and important ways. Nowhere are their effects more pronounced than in labor markets. Considerable attention is now being devoted to analyzing and anticipating changing patterns of employment and wages in advanced economies. Thus far, less focus has been given to understanding the implications for emerging economies.

The 2016 Brookings Blum Roundtable was convened to take on that agenda. How are the factors driving change in global labor markets playing out differently in developing economies? What are the jobs of the future and how will the terms of employment differ? What skills will those job demand and how will those skills be acquired? And finally, what are the implications of these changes for development prospects and for society?

This essay provides a brief account of the roundtable conversation. It is followed by six essays, authored by leading experts on this topic, that were commissioned to inform the roundtable discussion.

AN ERA OF CHANGE

The effects of technology—especially digital innovation—and globalization on labor markets are three-fold.

The first effect is disruption as jobs relocate to take advantage of lower costs, evolve to entail different tasks, or undergo wholesale change with the elimination of old jobs and the emergence of new ones. Disruption is a permanent feature of any dynamic economy, the upshot of markets responding to changing conditions. While the effects of disruption can be devastating for any particular individual or community, its effects for workers as a whole are positive if old jobs are replaced with new ones that are safer, less physically arduous, more stimulating, and provide greater autonomy. This has been the case for the median worker in rich economies throughout modern history up until recently, but less true for developing economies.[1] Today’s patterns of disruption are more discriminating, creating new groups of winners and losers, and can no longer be blithely assumed as a net positive. In addition, disruption is believed to be growing in intensity.

 

The second effect is a diminishing role of labor. Technology has made capital goods cheaper and encouraged their substitution for workers. The result has been a shrinking share of national income accruing as wages as opposed to profits across rich and poor economies. Some analysts view this phenomenon in combination with accelerating disruption as inevitably leading toward large-scale technological unemployment. This is an especially alarming prospect in the developing world where demographics are expected to increase the size of the global work age population by half a billion people by 2030. Another possible consequence is to reinforce the trend toward widening inequality.

 

The third effect is to decentralize economic activity away from corporations to which individuals provide their labor, toward the crowd in which workers participate as micro-entrepreneurs. This phenomenon is a facet of both the digital economy and globalization with the unbundling and contracting out of ancillary services from firms such as accounting and marketing. It is associated with changes in the terms of employment, both positive, such as increased flexibility, and negative, including the decline of unions and weakened workers’ bargaining power, the erosion of norms on pay equity, and reduced job security. These effects are most apparent in rich economies where the formal sector dominates.

While there is good evidence for each of the three effects, their speed and scale is surrounded with uncertainty. For instance, estimates on the share of jobs that are at risk of automation over the medium term vary from 9 to 47 percent for OECD economies; fewer estimates exist for the developing world meaning the possible range is arguably even greater. In another example, a year ago the World Bank reported evidence of the hollowing out of labor markets in the developing world, mirroring the pattern observed in industrialized economies. More recent analysis reveals no such pattern.[2]

BREAKING FREE OF A WESTERN LENS

One of the challenges in discussing the future of jobs in the developing world is that the jobs agenda and the semantics and metrics that go with it principally reflect a rich economy setting. Without recognition of this, such discussions can easily become divorced from reality.

In the West, being employed means generating an income; those that are not employed are assumed to be either idle or not in a position to take on a paid job. By contrast, individuals recorded as being employed in the developing world typically represent only a small portion of those that are economically active, with the majority instead engaged in low productivity activities in the informal sector. Thus, whereas raising employment in the rich world means moving people into paid employment, in the developing world it entails moving people into more productive—and likely better paid—lines of work.

This has important consequences. In industrialized economies the spread of automation implies the risk of redundancy for many workers. In developing economies, many workers are engaged in economic activities that are already some distance from the technology frontier—in other words, they could feasibly be done with greater technology and efficiency—and are paid accordingly. Automation needn’t imply the loss of that work, but rather the possibility of a further diminishing income. Thus, estimates of the share of jobs at risk of being eliminated in rich and poor economies have different consequences, though both are undoubtedly worrisome.

These differences can also result in labor market conditions in the developing world being mistakenly glorified. For instance, subsistence living in the developing world can be unhelpfully classified as entrepreneurship, implying a degree of choice and value that is clearly lacking. By the same token, subsistence living and informal work share some characteristics with the gig economy in rich economies, despite obvious and important differences.

DISTINGUISHING A JOBS AGENDA FROM A DEVELOPMENT AGENDA

Despite these challenges, the jobs agenda is increasingly becoming recognized as a priority within developing economies and the international development community. Demand for better jobs and anxiety about the sustainability of livelihoods consistently poll among the top issues in surveys of public opinion, including the vast My World exercise conducted to inform the contents of the Sustainable Development Goals.

At the same time, the development community has struggled to articulate how a jobs agenda differs from support for economic development more generally. This is understandable. Job opportunities in any economy are in part a function of a country’s level of income with poor countries constrained by low domestic demand and investment.

That’s why linking poor economies with consumers and investors in rich countries can be such a powerful force in expanding the range of opportunities for workers—and it is precisely this economic integration that underpins the dramatic economic convergence and poverty reduction in the developing world over the past quarter-century. New technologies have the promise to further expand these linkages, including platforms that couple workers with overseas firms, and, in the near future, instant translation services powered by artificial intelligence. The ability of poor economies to take advantage of these opportunities rests on equipping their workers with sufficient education and skills, as well as access to technology and digital infrastructure.

Even for countries that share the same level of income, the number and quality of jobs can vary significantly with the sectoral composition of their economies. For policymakers seeking to steer their economies toward more labor-intensive sectors, this can present a moving target. Whereas 20 years ago, manufacturing was lauded for its ability to absorb large numbers of relatively unskilled workers and to provide a stepping stone for economies seeking to develop capabilities and move into increasingly productive activities, today service-driven economies with a digital focus such as the Philippines and India may present the most promising and sustainable example to follow.

Just as low income in an economy constrains the number of good jobs that are available, it is also associated with various other adverse characteristics of labor markets including greater job insecurity, limited social protections and high information costs. A credible jobs agenda requires recognizing the constraint of low income and the extent to which it is binding for different labor issues. For instance, the biggest barrier to firms moving into the formal sector is arguably their low productivity and this cannot be divorced from a country’s level of development. By contrast, new technologies can be transformative in reducing information costs in even the poorest economies.

SKILLS FOR THE FUTURE

Education has consistently been associated with high rates of return in both rich and poor economies, but the precise mechanism by which education generates those returns remains somewhat contested. Some view education principally in terms of the imparting of skills while others emphasize its ability to sort individuals by their innate capabilities. The recent emergence of evidence of dismal learning outcomes in schools across large parts of the developing world could be interpreted as swinging the debate more in favor of the latter explanation. That is problematic for a future where the skills demanded of most, if not all, workers are seen as increasingly complex and quickly evolving implying the need for lifelong learning.

Another area of contention is the skills that should be given emphasis in training tomorrow’s workers. If that determination is made narrowly on the basis of the pattern of job creation and elimination, it likely leads to an emphasis on STEM skills. If instead it is made on the basis of the increasing speed of disruption and the changing organization of economic activity toward micro-entrepreneurship, then this raises the importance of soft skills and business skills to help workers adapt to a changing marketplace and to make optimal choices. Workers themselves appear to see the wisdom in this assessment: the most popular course on the online education platform, Coursera, is on “learning to learn.”

Digital technology is ushering in broader changes in the education sector, by threatening to depose those institutions that deliver inadequate outcomes and replace them with ones better suited to the changing global economy. However, we remain a long way from building an ecosystem that can address workers’ needs in assessing capabilities, imparting skills, accrediting skills acquired, and guiding each individual’s trajectory through a path of lifelong learning. A particular institutional gap exists in establishing a credible and secure repository to record each individual’s portfolio of qualifications and capabilities.

As the institutions that dominate the education sector change, this inevitably leads to questions about the role of government in the sector. The enormous positive externalities associated with education would suggest an important role. However, this need not necessarily be as a service provider, but more in shaping policy and providing finance for education. The greatest externalities likely occur for early childhood interventions—an area where government’s role has historically been too limited.

THE FUTURE OF JOB MATCHING PLATFORMS

Another area where digital technology is altering the institutions that shape labor markets is in the process of matching workers with vacancies. This is an exciting area of innovation and invention in the developing world. By linking workers and firms to the information they need, digital job matching platforms can both help markets clear more quickly and induce dynamic responses, including in the content of education programs and in the investment decisions of firms and workers. For example, when Apple adopted the new programming language, Swift, hundreds of freelancers on the digital job platform, Upwork, responded rapidly by training themselves to take advantage of new work opportunities.

A central objective for job matching platforms is to accelerate this feedback loop. That will likely require greater linkages with other actors including those involved in education provision and skill certification. Such partnerships hold enormous potential for transforming labor markets but have yet to be harnessed at scale.

A bolder challenge still is to assist those workers for which matching platforms consistently fail to find job opportunities. Solutions for these individuals may require partnering with NGOs or government, and more complex interventions such as supporting worker relocation.

THE CONSEQUENCES OF A WEAK LABOR MOVEMENT

While changes in the nature of work associated with the changing global economy are most prominent in advanced economies, there are nevertheless some important patterns shaping the developing world. Perhaps the most prevalent is the absence of a well-defined labor movement in many developing economies and a consequently limited role for collective bargaining. This is notable given what a prominent role these played in securing political goals and improvements in quality of life in the advanced economies during their own process of economic development. Moreover, the effects of technology and globalization appear to be reinforcing this pattern. There is already some early evidence of gig work in the developing world resulting in workers’ rights being less effectively upheld.[3]

There are a number of creative efforts underway to mitigate the negative consequences of these circumstances. For instance, some job matching platforms identify one of their core services to workers as helping them to optimally price their work. However, any attempt to strengthen workers’ bargaining power in an atomized work environment is unlikely to achieve the kind of results won by organized labor. For this reason, some entities focus today on promoting alternative ownership structures to avoid pitting workers against each other and against capital owners.

For most workers in the developing world, a secure job remains only an aspiration. Should the pattern toward decentralized economic activity continue unabated, that possibility may diminish further, even as economies develop and workers enjoy greater earnings. That would fundamentally redefine our idea of what “middle-class” status represents.

RETHINKING THE ROLE OF GOVERNMENT

The prospect of greater disruption, a diminished role for labor, and the decentralization of economic activity places a greater onus on the adequacy of safety nets. While safety nets are at different stages of maturity across different countries, those in the developing world have some advantages over those in rich nations in adapting to the needs of a changing global economy. These include programs being less fragmented and more harmonized, and avoiding the constraints that come when benefits are tied too closely to employment.

Compensation forms a central part of most public safety nets, which in its most comprehensive form means a universal basic income. The UBI concept has sparked excited debates in the West over the past year, so it is striking that the most extensive pilot, and one designed with rigorous evaluation in mind, is taking place in Kenya, and that the country arguably most poised to enact a UBI on a national scale is India. Other aspects of safety nets that require more innovative and effective solutions are those focused on retraining and relocating dislocated workers.

The redesign of social safety nets can be understood as one important component of a broader rebalancing required in the social contract between government and citizens, employers and employees, and the winners and losers of the changing global economy. The role of government is not just limited to helping those most vulnerable to change, but shaping change itself, whether by guiding the direction of technology through public investments in research and development, putting in place regulations that foster competitive markets and that are supportive of collective bargaining, and providing digital infrastructure for all.

Perhaps the most fundamental changes government can help usher in concern culture and norms that constrain worker opportunities in the modern global economy. This includes addressing discrimination in hiring and the workplace, removing the negative stigma associated with certain types of jobs, and altering how work is defined to more fully encapsulate all the productive activities by which people define themselves, such as bringing up children and civil participation.