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Investing in knowledge
Published in Al-Ahram Weekly on 14 - 03 - 2019

Self-service check-in machines are becoming a familiar scene in airports around the world and a sign of modernity. Passengers use the machines to pay for tickets, reserve seats and label luggage. However, what many of them may not realise is that these machines could also be destroying jobs.
Lant Pritchett, director of research on improving systems of education at the Blavatnik School of Government at Oxford University in the UK, said that “enormously scarce talent” in the developed world has invested in creating technology to overcome the problems of costly labour, adding that policies that close off borders have limited the supply of labour and rendered it more expensive.
“Technology does not have to happen; it is happening because of price distortions,” he told participants at the 25th annual conference of the Economic Research Forum, a think tank, under the title “Knowledge, Research Networks, and Development Policy”.
There is no denying the difference technology has made to all aspects of life, often changing the way business is conducted.
Albert Zeufack, World Bank chief economist for Africa, spoke at the conference on how technology has become all-pervasive and showing that a typical day in the life of the Internet in 2015 included 803 million purchases on Amazon, 186 million Instagram messages, and 207 billion e-mails. He showed data from the 2019 World Bank's “World Development Report” that showed that business nowadays is done differently.
Whereas it took Ikea, a Swedish furniture retailer, 40 years to open around 400 shops around the world, it took Taobao, a Chinese online-shopping platform, only 15 years to find nine million online merchants covering 220 countries, Zeufack showed. In 2018, people on Airbnb booked more than double the number of rooms booked through the Marriott and Hilton Hotel chains put together, he said.
Zeufack showed how knowledge is being leveraged to benefit people, adding that 11 million Rwandans now have access to healthcare in digital form through a mobile-based healthcare scheme that includes artificial intelligence symptom-checking and live telephone consultations with trained nurses and doctors. Prescriptions can also be sent to patients' phones.
In Nigeria, farmers have better access to tractors thanks to an application similar to that used for ride-hailing apps, he said.
Global economic growth could accelerate by two to three per cent extra through the adaptation of new technologies, according to Shahroukh Fardoust, research professor at the Institute of the Theory and Practice of International Relations at the College of William and Mary in Virginia in the US.
New technologies, such as the Internet of things, robotics, and cloud computing could be as game-changing as the steam engine in the 18th century, he told the conference.
While technology is creating jobs that did not exist before for technical and higher-skilled labour such as computer programmers, jobs that need medium skills such as those in the manufacturing sector are being lost to automation, Fardoust told Al-Ahram Weekly.
Lower-level jobs such as garbage collector or other basic services would not be affected, but wages would be stagnant, he said. Moreover, there could be competition for these low-skilled jobs by those whose jobs have been replaced by automation.
New technologies coupled with a huge youth population could translate into a new growth model for the MENA region according to Hassan Ali, dean of the School of Business at Nile University in Cairo. The youth in the MENA region, deployed through proper public policies, could be “the new oil of the region”, he told the conference.
Around 30 per cent of the population of the Middle East is aged between 15 and 29, and they are ready for change, Ali said, pointing out that the MENA region is ranked second in the world by number of daily Youtube video views at more than 310 million.
By 2020, projections suggest that there will be around two zettabytes of data in the Middle East, greater than the estimated number of grains of sand covering the entire Arabian desert, he said.
Already, Ali told the Weekly, many young people are working in what he called “the cloud labour market”. They may be physically located in Egypt, but they may be producing software for companies anywhere around the globe, he explained. “Technology has enabled young people to go beyond physical boundaries,” he pointed out.
“Just as exploration, extraction, and building refineries are essential primary costs to produce and sell oil, a holistic change in the education system is essential to use and improve human capital productivity,” Ali said.
The new growth model, he said, should be one that turns the surplus of unemployed and misemployed people into productive human capital through innovation, technology and entrepreneurship. This could happen if there was proper planning and coordination between the government, the private sector and civil society, Ali added.
Other conference speakers highlighted the importance of training and innovation. Rohinton Medhora, president of the Centre for International Governance Innovation in Waterloo, Canada, showed how countries in the MENA region perform poorly on the Global Innovation Index of the World Intellectual Property Organisation (WIPO) that ranks 126 countries. Except for the United Arab Emirates, which ranks 38, most of the countries in the region are not doing well, he showed.
Innovation was important to compete in a world that is increasingly dominated by what Medhora called “the intangible economy”. These intangibles include software development, patents, copyrights and research and development and design.
Over the last two decades, tangibles and intangibles have traded places, he told the conference. The share of intangibles' investment in GDP is larger than investment in tangibles in the developed countries, Medhora said. Meanwhile, poorer countries still invest in tangibles, he added.
The divide today is between the digitally rich and the digitally poor, not the developing and the developed countries, he argued. According to Medhora, that needs to change, and countries need to create, protect and valorise their intellectual property.
The challenge for public policy in the MENA region was how to harness technology for the public benefit, Fardoust said. Governments must invest in infrastructure, for example by making broadband accessible to all the population. Access should be enabled by providing subsidies for the poorer segments of the population because broadband could carry a prohibitive fee.
He stressed that governments should provide a social safety net so that those that fall behind can survive. Regulation is another aspect that public policy should take care of because otherwise some firms, given the nature of technology, could form monopolies, he warned.
With technology changing by the minute, it was difficult to predict what might happen, Fardoust said, adding that in 1995-1996 no one knew the Internet was coming.
“There is no going back, and we cannot throw away what is liberating us and is part and parcel of our lives today,” he said. Governments must be on top of these developments, he stressed, adding they should aim to draw the maximum benefits from them.


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