## More People, More Technology, More Jobs: How to Build Inclusive Growth

_IMF Blog, December 4, 2017_

## Source details

**Canonical URL:** [More People, More Technology, More Jobs: How to Build Inclusive Growth](https://www.imf.org/en/blogs/articles/2017/12/04/more-people-more-technology-more-jobs-how-to-build-inclusive-growth)

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## Bibliographic details
- Authors: Stefania Fabrizio, Andrea Presbitero
- Published: December 4, 2017

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### Overview and framing
- Authors: Stefania Fabrizio, Andrea F. Presbitero
- Date: December 4, 2017
- Central premise: Population growth and technological innovation do not necessarily have to widen inequality in developing countries; outcomes depend on current policy choices and on balancing short-term needs with long-term goals for sustainable and inclusive growth.

### Population dynamics and labor market challenges
- Demographics:
  - In Africa the under-25 generation represents 60 percent of the population.
- Labor supply and demand pressures:
  - Population growth potentially boosts the supply of low-skilled workers while automation simultaneously squeezes labor demand.
  - World Bank estimate cited: two-thirds of jobs in developing countries are susceptible to mechanization.
  - A McKinsey report indicates robots using current technologies could already carry out more than 50 percent of work activities in countries like Kenya and Colombia.
- Labor market polarization and premature deindustrialization:
  - Technological advancement may polarize the labor market into very low-skilled and high-skilled workers, increasing inequality.
  - Continuous skill upgrading in manufacturing has led to a decline in low-skilled manufacturing jobs, described as `premature deindustrialization'—developing countries are starting to deindustrialize earlier and at lower income levels than in the past.
- Constraints to inclusive growth:
  - Shortage of skilled workers.
  - Insufficient infrastructure such as electricity and roads.

### Opportunities from technology
- Positive impacts of technology on development:
  - Improved job matching through greater information.
  - Lower consumer prices and greater access to new markets and services due to lower connectivity costs.
- Case examples:
  - Kenya: access to the mobile money M-PESA increased per capita consumption levels and lifted 2 percent of Kenyan households out of poverty, especially households led by a woman.
  - Rwanda: a start-up uses drones to deliver medicines and blood in remote areas.
  - Tanzania: in 2013 a new tax payment system using mobile phones lowered the risk of carrying money to banks and reduced the cost of doing business by saving time spent queuing in banks.
  - Philippines (city of Batangas): supported by USAID, launched a similar mobile tax payment system in March 2014 to help businesses pay taxes via mobile devices.
- Technology and public services:
  - Technological change can improve transparency and efficiency in public service provision.

### Policy priorities and reforms
- Education and skills:
  - Invest in the quality of education, align education with labor market demands, and emphasize on-the-job training.
  - Evidence: an experiment in Afghanistan showed that setting up good quality village schools significantly increases enrollment and academic performance, especially for girls.
- Connectivity, migration, and investment:
  - Improve connectivity and technologically advanced transportation networks to broaden benefits of urbanization, create opportunities, and increase jobs.
  - More open migration policies and incentives for diaspora investment can foster diversification, diffusion of technology, and growth.
  - Ricardo Hausmann’s emphasis: growth potential depends on diffusion of know-how and technology; “it is easier to move brains than it is to move the relevant information into brains.”
- Industrial policy and spatial trade-offs:
  - Concentrating resources in one part of a country can boost innovation and create jobs but may widen income gaps between rich and poor areas and risk social and political unrest.
- Political economy and timing:
  - Some policies that generate higher long-term growth may not provide wide short-term benefits, reducing political incentives to implement them.
  - Key challenge: balance short-term imperatives with longer-term goals to achieve sustainable and inclusive growth.

### Key takeaways
- The long-term outcomes of population growth and automation hinge on today’s policy choices.
- Policies should prioritize:
  - Skill development and education quality.
  - Improved mobility and connectivity.
  - Migration frameworks and incentives for diaspora engagement.
  - Strategic infrastructure and targeted industrial policies that consider equity implications.
- Implementation requires managing trade-offs between efficiency and equity, and between short-term political constraints and long-term development goals.

*IMF Blog post: “More People, More Technology, More Jobs: How to Build Inclusive Growth” (Stefania Fabrizio, Andrea F. Presbitero; December 4, 2017).*

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## References

- [Towards 2030: Trends, Opportunities, Challenges, and Policies for Inclusive Growth](https://www.imf.org/external/POS_Meetings/SeminarDetails.aspx?SeminarId=266)

_Source: https://www.imf.org/en/blogs/articles/2017/12/04/more-people-more-technology-more-jobs-how-to-build-inclusive-growth_