World Bank Report 2019: The Changing Nature of Work
World Development Report (WDR) 2019: The Changing Nature of Work finds that fears over the future of work: that robot will take away jobs from people, appear to be unfounded as innovation has already transformed living standards and the work is constantly reshaped by technological progress. New ways of production are adopted by firms, markets expand and societies evolve. Technology brings opportunity, paves the ways to create new jobs, increase productivity, and deliver effective public services. Digital transformation makes firms grow rapidly expanding their boundaries and reshaping traditional production patterns. Greater investments in people’s health and education are urgent in a rapidly evolving labour market increasingly shaped by technology.
World Bank President Jim Yong Kim said, “The nature of work is not only changing – it’s changing rapidly”:
- Younger generation will have to be equipped the with the skills needed no matter what future jobs look like – skills such as problem-solving and critical thinking, as well as interpersonal skills like empathy and collaboration.
- There is stoking fears of a jobs meltdown due to rapidly rising number of robots operating worldwide.
- Technology is laying down a path to create jobs, increase productivity and deliver effective public services.
- Digital technology spurs rapid innovation and growth, disrupting old production patterns and blurring the boundaries of firms.
- New business models, such as digital platforms, evolve at dizzying speed from local start-ups to global behemoths – often with few tangible assets or employees.
- New platform marketplaces are connecting people more quickly than ever before.
- New markets and jobs are driving demand for employees with teamwork, communication and problem-solving skills.
- Technological change is eliminating repetitive “codifiable” jobs but replacing them with new types of employment: in Europe alone, there will be estimated 23 million new jobs this century.
- Technology is changing not just how people work but also the terms on which they work, creating more non-traditional jobs and short-term “gigs.”
- This is making some work more accessible and flexible, but raises concerns about income instability and the lack of social protection.
- Enhanced social protection with new ways of protecting people, regardless of employment status, are needed for adjusting to the changing nature of work.
- Governments will have to take better care of their citizens with a universal guaranteed minimum level of social protection.
- Full social inclusion will be costly, but it can be achieved with reforms in labour market regulation in some countries and, globally, a long overdue overhaul of taxation policy.
- As digital firms, with relatively few tangible assets, increase and grow, withholding taxes are also becoming more relevant.
- Current taxation patterns reveal large discrepancies, especially between poorer and richer countries.
- High-income countries collect a much larger share of their national output in direct taxes, while middle and low-income countries rely more on consumption and trade taxes.
- International tax system as such will have to be updated taking into account the globalized digital economy with the boundaries of firms transcending borders and physical assets.