Disruption, Digital Economies, and the Sustainable Development Goals Nile University Mahmoud Mohieldin @wbg2030 Senior Vice President October 2018 worldbank.org/sdgs World Bank Group
Global Demographic Fragility and Urbanization transitions violence Megatrends and Market volatility Technological Challenges Climate change and commodity changes cycles Renewed debate Shifts in the about global economy globalization
Middle East & North Africa Life Middle East & North Africa expectancy at birth, total (years) Urban population (% of total) 74 66 73 64 72 62 71 60 70 69 58 68 56 67 54 66 52 65 64 50 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Demographic Transitions & Median Age Urbanization Source: World Development Indicators, World Bank
Technological changes
Boundaries of the firm Changes in industrial relations (capitalism without capital) Demand for skills The future of the informal economy Scenarios of robots replacing workers Expectations vs. perception vs. reality
Boundaries of the firm Source: WDR 2019
The “Capabilities Escalator”
Changes in industrial relations Source: Haskel, Jonathan, and Stian Westlake. “The Rise of the Intangible Economy.” Capitalism without Capital: the Rise of the Intangible Economy , Princeton University Press, 2018.
Demand for skills 47% of jobs in the US will disappear in the next 25 years, according to Oxford University Source: Presentation by Ben Pring, The Future of Labor & Work in a Post Bretton Woods World, September 2018 Source: 21 Jobs of the Future: A Guide to Getting – and Staying – Employed over the next 10 Years, Center for the Future of Work
The future of the informal economy • Adjusting to the next wave of jobs requires universal social protection. • Eight in 10 people in developing countries receive no social assistance • 6 in 10 work informally and consequently do not benefit from insurance. Source: WDR 2019
Scenarios of workers replacing robots… And the history of man vs. machine “The summary of Santana of Elizabeth I economic Joseph Jacquard Died 1603 Mexico Luddites science” Died 1834 Died 1876 1811-16 Published 1913
Expectations vs. Perception vs. Reality
Enterprise Government People & Civil Society Capability Capability Capability Algeria 119 84 105 Egypt 79 102 107 Jordan 26 46 48 Lebanon 72 118 74 Libya 129 114 102 Morocco 41 41 93 Saudi Arabia 20 22 41 Syria 135 135 133 Tunisia 63 56 60 UAE 1 2 17 Yemen 98 112 136 Source: KPMG Change Readiness Index, 2017
Source: Adapted from presentation on Digital Infrastructure in MENA; High Speed Internet and the Digital Economy, World Bank MENA Chief Economist Series, 2018
Fixed- Mobile-cellular International Percentage of Percentage of households telephone telephone internet households with Internet subscriptions subscriptions bandwidth per with computer access per 100 per 100 Internet user 90 inhabitants inhabitants (Bit/s) 90 80 140 40 200000 80 70 180000 35 70 120 60 160000 30 60 100 140000 50 25 50 120000 80 40 20 100000 40 60 30 80000 15 30 40 60000 20 10 20 40000 20 10 5 10 20000 0 0 0 0 0 Source: ICT Development Index, ITU, 2017
Percentage of Fixed (wired)-broadband Active mobile-broadband individuals using the subscriptions per 100 subscriptions per 100 Internet inhabitants inhabitants 90 35 90 80 80 30 70 70 25 60 60 20 50 50 40 40 15 30 30 10 20 20 5 10 10 0 0 0 Arab States Developing Europe Arab States Developing Europe Arab States Developing Europe Source: ICT Development Index, ITU, 2017
Mean years of schooling Secondary gross enrolment Tertiary gross enrolment ratio ratio 14 120 80 12 70 100 10 60 80 8 50 60 40 6 30 40 4 20 20 2 10 0 0 0 Arab States Developing Europe Arab States Developing Europe Arab States Developing Europe Source: ICT Development Index, ITU, 2017
Investing in Inclusive Growth The Common Characteristics of High, Sustained Growth: Source: The Growth Report, 2008 19
Investing in Inclusive Growth Dashboard for inclusive, sustainable, and multidimensional growth 20 Source: New Growth Models, World Economic Forum, 2014
Global Poverty Rate Projections to 2030
Harnessing the impact of technological changes requires a comprehensive policy framework Invest in Invest in human Invest in resilience (incl. capital infrastructure social protection) Finance STI Enablers Data Achieving the SDGs Adapted from: WDR 2019 Changing Nature of Work, World Bank, 2018
Investing in Human Capital The Human Capital Project “How much human capital will a child born today acquire by the end of secondary school, given the risks to health, education and social protection that prevail in the country where she was born?” Three main indicators, reflecting building blocks of the human capital: Survival – Will kids born today survive to 1. school age? School – How much school will they 2. complete and how much will they learn? Health – Will kids leave school in good 3. health and be ready for further learning and/or work?
Investing in Human Capital The Human Capital Index 25
Investing in Resilience Social protection and labor regulation can help manage labor market challenges Source: WDR 2019
Infrastructure Outlook: Africa Infrastructure Outlook: Asia 4E+11 2.3E+12 3.5E+11 2.1E+12 3E+11 1.9E+12 2.5E+11 1.7E+12 2E+11 1.5E+12 1.5E+11 1.3E+12 1E+11 2016 2018 2020 2022 2024 2026 2028 2030 Current trends Current trends Investment need Investment need Investment need inc. SDGs Investment need inc. SDGs Source: Global Infrastructure Hub, 2018
In low income countries, only 12 percent of people use the internet, but usage is growing. Source: SDG Atlas 2018
The digital economy can help achieve the Sustainable Development Goals (SDGs) and WBG’s twin goals The scale and speed of disruption is affecting Inclusive Digital Smart Education Energy Growth traditional sectors. Digital Smart Transport Agriculture Changing how we collect, store, access, Jobs analyze and present data. DIGITAL Digital eCommerce ECONOMY Health Improving production Competitive techniques to increase Economy efficiency, affordability, Digital and speed. Industry Cultur 4.0 e Transforming how we Efficiency interact with the world and deliver/ receive services. Digital economies require safeguards to ensure robust job markets, and possible downside risks 29
Finance How will we Data enable these investments? STI
The key components of financing sustainable development
Big picture of developing countries' total resource receipts FDI Net Inflows (% of GDP) Tax revenues Fintech 10 5 0 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Low & middle income World Middle East & North Africa
1. Embrace the promise of fintech. 2. Enable new technologies to enhance financial service provision. 3. Reinforce competition and commitment to open, free, and contestable markets. 4. Foster fintech to promote financial inclusion and develop financial markets. 12 5. Monitor developments closely to deepen understanding of evolving financial systems. Elements 6. Adapt regulatory framework and supervisory practices for of the Bali orderly development and stability of the financial system. 7. Safeguard the integrity of financial systems. Fintech 8. Modernize legal frameworks to provide an enabling legal Agenda landscape. 9. Ensure the stability of domestic monetary and financial systems. 10. Develop robust financial and data infrastructure to sustain fintech benefits. 11. Encourage international cooperation and information-sharing. 33 12. Enhance collective surveillance of the international monetary and financial system .
Data is the new oil
Data availability is a challenge, even for Canada Seventy-eight of 169 SDG targets describe potentially assessable outcomes for Canada 20 10 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Quantified SDG target Canadian national target Proxy target Not able to assess Source: “Counting who gets Left Behind” Brookings report, 2018
STI for SDGs
STI for SDGs E-health can serve some of Digital education creates the neediest patients in the classrooms at scale and world’s hardest to reach connects world-class places teachers to students who need them most Digital payments and Digital financial services monitoring enable off-grid, provide new opportunities renewable energy sources for SME savings, credit, to be deployed years in and insurance thereby advance of traditional spurring expansion approaches 37 Source: International Finance Corporation
worldbankgroup.org/sdgs Follow us on twitter @WBG2030 Mahmoud-Mohieldin on Mahmoud Mohieldin @wbg2030 Senior Vice President worldbank.org/sdgs World Bank Group
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