MSM New Year’s lecture: ‘Is technological innovation making society more unequal?’

‘Millions of jobs will be made redundant in 2016 and beyond as a result of new technological innovations in robotics, automation, data analytics, artificial intelligence, and the like’, was one of the messages of MSM’s New Year’s Lecture 2016 given by MSM Dean Professor Wim Naudé on 6 January 2016 in Maastricht.

Speaking about the impacts of technology on labour markets through skill-biases and job polarization, Naudé stressed that the impact of technological innovations were not neutral, created winners and losers, and that it required better governance and better understanding of the governance-entrepreneurship nexus, including the roles of social security and self-employment to buffer the adjustments that many economies will be going through in the near future. ‘Even emerging and developing countries will not escape this – technology is by its nature and through the greater globalization of the world economy more mobile than before, and increasingly capable of replacing cheap labour, traditionally the basis of comparative advantage for many poorer countries” he explained.

As a result of current technologies predominantly replacing mid-skilled workers in middle-wage jobs in Europe and the United States it has contributed to growing inequality in these regions. However, technology is not the only cause of inequality nor is it without remedy. Weaker corporate governance, policy capture and a weakening of labour unions have all contributed to workers getting a smaller share of GDP, and owners of capital a larger share. It has been particularly at the top 0.1% of the income distribution where incomes have grown fastest, he outlined.

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After the lecture, the audience took the opportunity to engage in a lively exchange with Prof. Naudé. The event ended with an informal reception to celebrate the New Year and to catch up after the holiday season.

Professor Naudé’s lecture was based on his contributions to UNIDO’s Industrial Development Report 2016 that was launched in December 2015, and which deals with the implications of technology on inclusive development. An extended working paper on this topic can be read here.