Digital economy and the future of work
08 December 2016 - A Workshop on in Guadalajara,Mexico
>> Good morning, everyone.
>> MEGAN RICHARDS: Okay. Good morning, everyone. Welcome to this workshop which is on the Digital economy. I am Megan Richards. I am very pleased to moderate this. I think what we really want to do is have a very interactive and participative workshop. We have some wonderful speakers. They're all going to make brief presentations and then we'll have time for proper discussion and interaction with you. Two of our speakers are participating remotely. That's why their name plates are here. But they're not here physically. They're here remotely, but they're participating very actively. What I propose to you is divide the workshop into roughly two groups. One to speak more generally about the digital economy and then to concentrate more specifically on the implications for the future of work in a changing environment.
So it depends on whether you're an engineer or a lawyer as to whether you go from a specific to a general or a general to the specific. But in this case, I thought it was useful to go from the specific to the general and then we can identify some clear proposals for addressing some of these issues and finding possibly solutions to them.
So we have a wonderful list of speakers. I'm just going to identify them briefly. I'm not going to go into all the details because it was all available to you in advance. First we have Lillian Nalwoga. She's participating remotely. Then we will have ‑‑ if I'm looking right ‑‑ yes. Iline Noah and Antonio Garcia Zaballos. So those are the first four participants who are going to speak in the first half more generally about the digital economy and then we'll go to the second session and I have to keep track of the time.
So, Lillian, can I ask you to start and make a brief presentation now? You have about three minutes to make a presentation and then we'll go on to the next speaker. And Lillian, as I told you, is participating remotely.
>> LILLIAN NALWOGA: Thank you very much. Am I audible?
>> Megan Richards yes. We can hear you.
>> LILLIAN NALWOGA: I am Lillian Nalwoga happy to Connect with you remotely to talk about the digital economy and the future. As you have read, you read come my brief on the chapter and I all work with an ICT policy series in Uganda for the center for ICT policy in southern Africa. Just about what is happening in Africa, which is nonstop. By now today, you know about the Internet connection in Africa. We've had increase in users for over the last few years. According to the ITU since 2010, we have seen 15% increase in Internet access. In terms of mobile Connectivity, that's been a 35% increase. Currently, we have 80% of mobile internet users and what does this translate to? This means that we are seeing many people using Internet. Many people taking advantage of the opportunities that have provided by the Internet. This has led to a time that is referred to as techy youths. We have seen many youths in health, education, finance and culture and we are seeing countries like Kenya, South Africa, Uganda and many others catching up. As we shall see the speakers to come for these opportunities that are out there, but for the kids of Africa, we already had a number of challenges from infrastructure challenges. Africa is behind in terms of access, in terms of cost of connection with just 75%. 75% of the people use Internet. When we talk about infrastructure challenges, we do not talk about Internet only. The challenges like electricity. They have blackouts on a daily basis and this affects many Africans on a daily basis. Also, when you talk about the future of the digital economy and the future of work, we can know no other issue of literacy and computer skills which are very essential for us to realize a digital economy; however, in Africa and in many developing countries in general, there are still digital skills and also these skills what they do is they exist in the queue. We still have legal policy challenges related to regimes. While we are seeing countries like Uganda and Kenya, governments are coming up to kind of regulate information technology service providers requiring them to register with a national IT authority for them to be able to practice. Other challenges, of course, taxation of ICT devices and services, cybersecurity. For us realize digital economy and for us to talk about the future of jobs in the district economy, we need to have digital trust. Many countries do not have that protection and privacy laws. Uganda, Kenya, South Africa, Tanzania and Ghana and Zimbabwe. So what needs to be done moving on, I think my 3 minutes or close to get finished, we need to address the challenges by having reliable and presentable infrastructure. There needs to be more public and private corporations in employment. In African countries this has been done. However, there needs more cooperation in bringing governments and private sector working together. The issue of capacity knowledge about in innovation from financing, marketing, technology and financial inclusion and, of course, lastly but not least building digital trust, having the right isolation will reach still needed to build trust in the digital economy. With those, I am happy to listen into what my other speakers and panelists will be contributing to this important topic. Thank you.
>> MEGAN RICHARDS: Thank you very much, Lillian. In particular, you emphasized some of the underlying factors that limit or impede the development and growth of a digital economy. Those I think are very important and useful to keep in the back of our minds. So, can I ask you to introduce your point, please?
>> All right. Sorry. Good morning again. Let me just say a few words about the issue of translation and the effects of jobs and employment.
First is the overall effects of digitalization. We should ‑‑ another result of consents about the implications on jobs and employment. I think we should keep in mind that innovation is higher living standards, it is progress and some. So it is an opportunity of technology that can deliver this progress. There are two sides to that.
The first one is that when you have better technology, you can produce more with less and this is clearly the source about employment. You can do the same with less people.
There is another side to it which technology allows you to complete different things. Allows to you produce things, goods and services that were not even imaginable before. If you go back in history, you see that the second effect and the creation of new markets of new product service has been the driver of growth and employment generations. So, if you like one basic line out of this view and history is that if you want to support employment and growth, you need to foster the development of this new service of this new market. And this is a kind of paradox because we see that investments and ICTs have been declining many times over the last 10 years and so. There are many firms that are not picking up technologies that include productivity and increase their capability to reach markets.
And also many uses and potential consumers that are not using the technology to the extent that is possible. So, there is a room there really to foster the development of these new markets and policies can play a role in that.
The second thing is you need to make sure that the people that are displaced by the jobs that were not necessary by the theories that had a smaller role can also be accompanied to the transition to the new activities. So clearly the education, training, vocational training is an important component on that. There are more what is called active labor policies where there is enough time to help workers to make the transition and we could still underuse and underdevelop in many countries in advanced countries. We also have to face the fact that some people, some workers for a number of reasons for basic skills for age will not make the transition at all and we don't have to lead them on the road. We have to provide for support for these people. The third point I like to make is about ‑‑ why there's about technology making it possible to reorganize the organization to changed organizational work. Of course the job platforms that make possible to break down, if you like, what complete organized jobs and number of tasks on demands. For timing, this type of platform and people using them is still small, but they're growing very fast and we can all see there is a potential in how you organize work, you organize business and there is a huge demand for change in the way by organize employment protection is carried out. The relationship between the social partners takes place. So we need to make sure that this new opportunity for the organization of work do not ‑‑ I mean, they are supported by change in the safety net and deliverable market relationships.
>> MEGAN RICHARDS: Do you see a difference of where you are working and emerging markets or developing countries or the principles the same for all?
>> I think the principle is the same. Of course, there is opportunities for each country depends on their positioning in the global change which leads to utilization, but overall, that's the kind of approach we'll take forward with that.
>> MEGAN RICHARDS: Eli, please. I'm sure you'll have interesting comments.
>> ELI: Thank you very much, Megan. Here we are in the City of Guadalajara and we're happy to be hosted. Four weeks ago, we had an election in the United States and Guadalajara lost. That is to say the forces of people who are worried about their employment and their jobs have deemed ‑‑ have led to a back lash on the election and it was not only the Republicans. Democrats too. Bernie Sanders' supporters too. So this clearly will affect people, maybe not so in particular I would say here. So I think that on the whole, it's a reflection that the community has to recognize to man up, to woman up. One cannot take credit for everything that happens in the world that is good and attribute it to the internet and at the same time shrug your shoulders when it is something negative. While it is true that in the larger order of things and on a global level, there will be more jobs and better jobs in certain countries, influential countries, western Europe, United States, North America, Japan and so on. This is not necessarily the case. So, that has been shifting from the blue collar jobs that have been out migrated and, of course, the industrialization is happening anyway, but the pace of the acceleration is a stronger one because of the ability to transact globally and to control globally. So things have accelerated beyond the ability of the political system of the individual skill level to adjust. That's a problem one has to recognize and it is now moving from the blue collar jobs also to the pink collar jobs and retail and so on. So because there is so much to talk about, I would say something about old folks having reached the age of 70. I can consider myself to be in that category. So I've been thinking about it.
So there are several issues. One is the problem of under qualification of older people. That is their skill level is just not up to. And there are some policy solutions one can think of.
For example, being able to take your social security retirement benefits earlier to reskill, to learn something new and then say a year or two like a sabbatical and then kind of retire one or two years later. So you just front load it. The second problem ‑‑ so that's the problem of under qualification. The second problem is over qualification. People who have been trained to do certain jobs at a high level and in some ways they're over qualified for a lower job and they will not take a middle level job. So we have to restructure and that's a rather difficult problem to deal with. The other one is the back loading of the compensation. That is young people are relatively under compensated for their proactivity while older people are over compensated and that is the reward to keep the younger people, working hard and working at night so that one day they will benefit from it. And that is not a skilled issue. That is a compensation profile issue. So maybe we should pay the older people a little less and the younger people a little bit more because that arrangement that we promise you a good job later, lifetime employment, that promise is being broken now all the time. The fourth problem is the problem of the changing risk profile. We are moving more to a winner take off economy where there's only few winners, but the Internet model in a way, kind of the tournament where you can win a big prize that most people don't. And the ‑‑ and it also is associated with a more unstable economy. If you think about it, the '60s in particular were economically more stable, but then we have come to 2008 down turn. The dot com movement bust and there will be other things similar. The Internet economy is an unstable economy. It's a boom bust economy. So in that situation, you will always have more risk and the people who are lease capable of handling that is older people. So to conclude since there's no time, the Internet industry needs to step up to its responsibility. It needs to support government programs, but needs to do something on its own.
For example, it should not only displace older work, but it will hire older workers. Why doesn't Google? Maybe they do it.
>> MEGAN RICHARDS: You have a very good example. A Google employee here.
>> Hire every year and business service people over 70, Megan. 70, 60, 70 older people who are perfect and capable of doing a decent job, but for a variety of cultural and order issues are not being considered. That will be a service to the community and it will also be a beacon to others to do the same.
>> MEGAN RICHARDS: VINT wants to comment on that.
>> I was 62 when I was hired at Google and now I'm 73. We hired 10,000 people last year and we need experienced managers. So we're very spread across the age groups. 15 years ago, it was a different story. We were hiring people right out of school. The average age of the company was probably 27 or something. But that age has gone up significantly and, of course, over the last 18 years.
>> MEGAN RICHARDS: Thanks. I want to throw out a couple of points for future discussion. But one idea that's been muted many times is equal income for everyone. And again for the discussion later is the idea of older workers and it falls on a bit of what Eli said. Older workers being rehired but at a lower wage and almost volunteers. This is somewhere where we can use the experience and expertise of people who don't necessarily need the financial income, but are ready to produce.
Okay. Let's go next to Antonio. Antonio Garcia Zaballos is participating remotely. I suppose you're in Washington, Antonio. Do we have you?
>> ANTONIO GARCIA ZABALLOS: Thank you so much. I don't know if you can hear me.
>> MEGAN RICHARDS: Yes.
>> ANTONIO GARCIA ZABALLOS: Thank you very much for the opportunity of being here remotely. The topic is definitely something of great interest and is something we are observing in most of the projects in which we are involved in the IDV. Just for those of you that are not very much familiar, there's an American development bank that is working on 26 countries from Latin America and basically we are just providing financial and technical support to the different governments in several areas. So one of the things that we're observing when we are working in the region is that there's much between the skills that are required by the companies and the skills that are provided by the company.
At the end of the day, we are moving in a global market that are requiring things and digital infrastructure. There's no in a sense for a particular government or company just to be working on just one country. So as a consequence of that, you know, the industry and the economy is demanding positions and is demanding jobs that they're not assisting and some are on time going to be different. So the true thing is that we have to work together between the privacy sector, between the government and the academia in order for us to meet much of assisting gap in terms of, you know, in terms of jobs. I will submit simple questions. Why are companies going to countries like rush alike India, like Ukraine to get programmers rather than going to countries like Peru, Argentina or Mexico? This is something that the government has to think of and this is something that the whole community has to think about. There is an increasing gap in skills and we do need specific actions just in order for us to reach this assisting gap. Some idea just to throw on top of the table to open up the dialogue later on. We need an increasing dialogue and collaboration between governments, private sector and academia to understand first of all which is the magnitude of the gap.
Second, am I understanding we need a specific involvement over ministries of education at different levels. Primary, secondary and university education in order for them to adjust to what is really needed. And third, we will need to speed up the involvement of training center, train of trainers and communities because in most of the circumstances, we realize there are rural areas which are not connected and in one way or another, you know by nature using this technology they can improve the quality of life.
So at the end of the day and just to sum up, in developing countries, there is an increasing need on new jobs, on digital infrastructure and we need to work all together just to reuse the system gaps. It is also a responsibility of the means to finance and the government assess. For sure responsibility from the private sector and the academia. Thank you very much again. I'm looking forward to the discussion.
>> MEGAN RICHARDS: Thank you very much, Antonio. Now, I would like to open up the panel to comments, questions, et cetera. State your name and your organization, if you represent an organization and where you are from. Second, if you are asking a question to be very brief and end it with a question mark. Always useful. If you have a comment, please be very brief. You may have an observation or comment. No problem to make that, but then again, please be very brief and you us have to say your name and where you're from.
>> MIA PETRA: So, let's go ahead and start. My name is Mia Petra. I am dealing with digital issues, but also simply on the member in the employment committee. So my question is: A value added in this new Internet is kind of the key, but do you invent something and then you multiply with the 3.4 billion users. So, is it then the whole value added chain meant to be from here to the future that innovator, the owner of that one clicking whatever it is innovation is then gathering all that value added and then everybody working on a part of that chain is worth a few cents or a little bit. So that has been something we have been considering a lot.
As a test one example, I come from Finland with a lot of gaming industry and they did good games and then we play all over the world or we play heyday or Clash of plans. It is quite nice how what they did for the Finland society. It is not only the 300 working place. It is doing the development of the games, but they were the biggest tax payer event. So off to a few banks, they were the biggest tax payer and they were happy tax payers and said they were getting funded to be able to create something, but then also say they are happy to provide to society with the tax they value added. So this ends with a question mark. Is it the value chain we should look at and the role of work in that one?
>> MEGAN RICHARDS: Thank you, Mia Petra. Other tax payers wouldn't be quite so happy. Vincenzo, can I ask you to stand up?
>> VINCENZO: It's possible, but if you like ‑‑ I don't think it's necessarily something specific which is for the digital technology and some. It is clear there are new markets and new organization and division of production across the world. There are some actors that have entered the market that have considerable market power. They're putting pressure, their leadership to deal with the other providers and so on. But again, there are markets and to the extent, this market is competitive and remains open to competition. There are other actors to reduce the power that's there. It would be one big or small number of big players taking almost everything and the large number of smaller players getting adjusted to the share if you like. Again, the situation is that ‑‑ I mean, there are different views on that. My personal view is that the big way of the Internet companies is mostly a first move advantage. They created and entered the market and they have a big weight on that. Others may take this position away for the time ‑‑ for as long as we are sure there's competition in this market.
So things can change and we had a discussion yesterday whether the dominant position of certain countries is such that it prevents competition or not is not clear that this is the case. So again, I will not be necessarily concerned on this stage that there is concentrations going to be like that forever because it is digital.
>> MEGAN RICHARDS: Thanks. Just a brief remark. I was joking about the happy tax payers. Without aspect that I think very interesting and telling in the way in which economies are built and the way societies manage is that 90% of the GDP increase in Denmark, for example, went to 90% of the population whereas in the United States, it was almost the opposite. You have this equality and the way benefits are accruing and they're quite dramatic in different countries. Can I ask you to speak?
>> STEVE SELZER: I am Steve Selzer and I am with APC in San Francisco. We have a great revolution taking place. Some of the industrial revolution. The question we face is: How is that going to affect the working class of the world and frankly, it is harming them. There are advances in technology.
As a result of this ideology of disrupting the economy, Uber and other products, millions of workers are threatened with that. You have the economy developing in the United States and if you want to know about Trump, part of the development of Trump and order right‑wing nationalists is a loss of job working people that have no future. Young people have no security. This is the cause because of the development of the technology and the deregulation of the economy which politicians like Trump and orders are pushing. I think that the ‑‑ others are pushing. The result is how is the working class, how people globally are going to confront this new world economy? How can people defend their working conditions and no control of their lives. They're basically ‑‑ American workers are competing with workers all over the world through the Internet in very different conditions. So, this is a very radical situation and something that has to be confronted and I think the last part of it is, of course, some people benefit. The billion neighbors, the owners of Google and these companies, Uber make tremendous profit. But the Uber workers, the workers who are being marginalized, these are losing everything that they have and they have no future in this economy. Thank you.
>> MEGAN RICHARDS: I think both Vincenzo and Eli have addressed these issues. Thank you. Can you take the microphone back? I think perhaps they would like to mention this as well. Antonio, of course, has talked about digital skills. We will go into that discussion a little bit later in the second half. If they want, they can address that a little bit later. I don't know if, Lillian, you want to come in on that as well.
>> LILLIAN NALWOGA: I'd like to address that because I think you're addressing a real issue and what surprises me is that unions have not used the new tools of technology in order to organize or new touch of organizational efforts been taking place to deal with that among young people, among existing or older people. I'm a, school professor. I'm not a union organizer here, but I'm surprised it doesn't happen that the shift from the traditional lifetime employment type situation to what is called a 1099 economy. 1099 is a part time tax form for part‑time labor. So people are moving from W4 forms to 1099 forms of taxation. That shift is not accompanied by any organizational efforts to get people who are at risk or who have to work as volunteers to over qualify who are the extra supply that exists in certain high‑skilled technologies that has not happened. Perhaps you can explain to us why it hasn't.
>> MEGAN RICHARDS: Do you want to add anything?
>> I would like to say briefly. It's a bit easy to blame digitalization for a number of things that are going on. It's true that a lot of trade is enabled by digital technologies, but between the technology and the actual trade, there are trade agreements, there are policies, national policies and so on. So the overall deliverable market is a political choice which is independent of what is made possible by technology.
So I think it's useful to recognize that technology change completely the picture, the environment in which policies are affected or not, but then we should not forget there are other respects, which is as important in technology in determining the outcome. Otherwise we kind of confuse a bit the situation of what we make.
>> MEGAN RICHARDS: I was looking in the distance, in the future and I missed one of the speakers here who wants to ask a question.
>> VIHAN BONNIE: Hello. My name is Vihan Bonnie. There are jobs created in the digital revolution, but the question is how to adjust people to those new challenges especially in that time now where we are starting with robots and automatization. We train other people and we need to change educational system and to give young people new completely new skills. On the other hand, this is a question. If we need the basic income model to implement because it is very interests, but I have some questions and some doubts.
>> MEGAN RICHARDS: Thanks. Yes. I think because there are so many questions, what we will do is bring a few together. I gave you the microphone back. So please go ahead.
>> WIZET: My name is Wizet. I come from Nigeria. My question is the other side of the question that Steve has asked. How, displacement is in every table and I think there are a number of solutions that have been suggested. Now solutions without the infrastructure to implement that solutions would not work. By infrastructure, I mean that the trade unions increasing lose it out in the sense that a lot, a lot of workers and losing the right to unions. This is affected by the fact that you have employers in one country and workers in another country, different laws, different regimes. The great impact that digital economy is creating on the right of unions and the right of workers union has to be addressed in order for all this other solutions to be implemented. Without the right, unions can be affected and pushing solutions that we have suggested here.
>> MEGAN RICHARDS: Okay. This is very, very much between different countries around the world. I will come to you to after.
>> STEVE: Thank you, Steve from Net Choice. The U.S. congress held a round table hearing on what they call the sharing economy. But it was a committee on education and work force with an attempt to figure out if workers are participating in the digital economy, the sharing economy. They may need access to employee benefits that would otherwise be available in an employer relationship. My organization presented a new nomenclature for them to think about. The word sharing capture 1/3rd of what happens in the peer to peer economy enabled by sided markets, technology and they evaluate sellers and buyers. We talked about gig work. That's like Lyft, Uber and Big Work. That's sharing a home or a room on your house in a B&B and maybe sharing your car, sharing your tools and getting paid for it or delivery vehicles and delivery vans and pick up trucks and the third category was the goods economy. That's not sharing anything and it's not gig, but it's goods. It's making crafts and selling them on a platform like ETSY. So the goods, the gig and the asset sharing are a far better way to think about the peer to peer economy than to lump it all in a digital economy or the sharing.
>> MEGAN RICHARDS: Of course we'll come back to that when we talk about digital skills and digital work. Let me take two more questions and the panel will have the difficult job of trying to answer them in one. You wanted to take the floor.
>> LEANDRO: For the record, my name is Leandro. I represent private sector. I'm a software developer. I think we always talk about digital economy on the bad side, but we can also think about the good things and then new values that we can have like collaboration and new things like eHub repository or APIs with innovating and the developing of future skills and jobs in our hearing capital. Thanks.
>> MEGAN RICHARDS: You'll be the last one and then we'll have another round.
>> GRASON: My name is Grason. I'm a student at NYU. I think one thing that inspired me on my studies is frontier paper which in 1945, that technology can be a way in which work and leisure time will increase and at the same time, it shows technology as this thing to enhance life instead of enhance work, but it seems like now looking at the digital economy, work has bled into leisure time. We're answering e‑mails at home or having conference calls day to night. I wanted to know when we think about the future of the digital economy, is there kind of a weigh in which we can get back to this idea of technology as Utopianism or a post work economy. Is that possible? Or we so bled into this idea of work if the sake of work and we will have to incentivize work to keep it going. So thank you.
>> MEGAN RICHARDS: Thank you. Very good question. Can I open it up to the panel? Yes. Vince, you go ahead.
>> So, let me respond to the last question. I'm still a big Bush fan. It takes a longer time to make observations, but let me point out that historically, technology has come along and disrupts jobs. The industrial revolution did that, but it created a whole lot of other work. I think that's still true. The problem is that the jobs that get destroyed and the new jobs that get created may not be filled by the people who fill the older jobs. And so one of the biggest issues is figuring out how to put those people to work. One answer to that may be retraining. It may also turn out to be inventing new work to do and when I get a chance to speak more, I'd like to point out a few ways in which we can all benefit from the spread of digital cape act and also argue that we ‑‑ capability and also argue that we will have to.
>> MAYLANI: Maylani. I run a think tank in south east Asia. I come from a part of the world that's benefitted from the jobs that all the people in this room have lost. It has created wealth. It has contributed to the GDP. It has partly been price competition, the commoditization of work. And ironically, we are now in that middle position ever having been early in the outsourcing business and now raising price competition from other cheaper players, interestingly. And that VPO revolution has not always been inexclusive either. It created employment for Delhish speaking, degree holding software skilled people greatly. Then the wave of call like outsourcing is slightly more inclusive and it is more competitive. When I come back, I will talk a little bit about micro work. The commoditized work that the people here don't like, everyone wants to do high end work including governments innovation, but somebody has to design that logo. Things need to be done and there's a large group of people in our countries who do this and who benefit greatly and who don't fall into this narrative. And that is gig work. There's exploitation, but also a huge story as well.
>> MEGAN RICHARDS: There were people in the back that wanted to ask questions. Do you want to ask them related to the digital economy per se or more on future of work? There is someone else waving his hand.
>> JULIA: I am Julia from the youth observatory. I think we are living in a time such as the Trump election and the Brazilian turmoil reflect on other things. There is a new industry revolution and this is curious because all this advance they are rooted. Their economic and political institutions are connected. We have all the social dynamics having more common equality in a society. A society is lack of faith on Democratic institutions and they need to have other alternatives. In the scenario of polarization and jobs as sellers as we have heard here today, it matters in my opinion for us to reflect on how the ropes of national or regional systems and PPPs as public policies that can overcome social economic consequence of a new configuration of the new labor market globally. Thank you.
>> MEGAN RICHARDS: Next one. Can you be very brief, please.
>> Hello. I wanted to know if the speakers think that if regulation to stop the strain jobs stop the new software companies to progress and try to replace workers with relative regulation would be the solution to that to affect the market and regulate itself and they don't have to do anything or just a little bit.
>> MEGAN RICHARDS: That's a complex question. If you would have attended the workshop yesterday, you would have known the answer. No I'm kidding.
>> JENSON: I am Jenson the chair of Africa Alliance. I would like to commend this workshop and the panels. My quick intervention with respect to what was said earlier and others too that we should look forward to more destructive technologies. If we look forward to eat, then we need to fully prepare because we're in a digital society. So we have identified that there's need for expansion of outsourcing industry, in Africa for example. Government to take the lead really and increasing the capacity of citizens. So we can have a pool of workers that can take the new jobs. There are many new jobs.
For example in Nigeria, there are many things that we need. Security, people need explanation of many things, many new technologies. So they don't get it. So government to take the lead in charting direction and also emphasizing that industry need to also up the skill level so they can relevant the new industry.
>> MEGAN RICHARDS: Okay. Thank you. That's a very good lead into the next session unless someone wants to show how regulation is going to change the world. I don't think it will be able to stop technological advances. We'll come back to that when we come to the next issue. You want to speak very briefly on that before we go to the next?
>> The industrial revolution led to political revolution. So here now if we have a situation in which there are more people who lose or who fear losing and feel threatened to feel that the new economy is a threat and not an opportunity for them, there will be political backlash. We've seen it. We are seeing it. We will see more of it through the regulatory system and reflected. There will be rules set that you cannot fire anybody who has worked for you for 10 years. You cannot fire somebody who is 60 or more years old. There would be action for seniors and for gender and race issues. There are responses that the system will impose unless the industry creates these opportunities in a very affirmative way. So it is seen as an opportunity and not as a consumption of opportunity, but also as a job and opportunity. I am addressing this to him.
>> MEGAN RICHARDS: Thanks very much. Let's go to the next half or more or less half of our discussion. It would focus more on the skills, jobs aspect rather than the digital economy as a whole and an impact on the jobs. I want to call on Lorenzo who is from Telecom Italia and he's participating ‑‑ I am not sure where you are, Lorenzo, perhaps in Italy or Rome. Do we have Lorenzo on the line? We'll come back to Lorenzo when we have him available. Vint, are you ready? He's just admitted he's over 60 still working. Lorenzo is there. Excuse me. Sorry. Please go ahead and thank you for joining us, Lorenzo. Please make your 3‑minute intervention and we'll continue. We can't hear you. Perhaps your microphone is off. Lorenzo, we can see you, but we can't hear you. You can turn your microphone on? Let's go to Vint in the interest of time and we'll come back to Lorenzo because that will make us go faster.
>> VINT CERF: This is a topic of real interest to me. Let me start by saying the social world we live in is like an Eco system, biological Eco system and the participants in that Eco system find issues where they can survive. The job world is like that. The niches change and the available food changes in this analogy. So we shouldn't be surprised to see this kind of shift take place.
Second, I want to emphasize the technology does some pretty interesting things. Imagine that it's 1900 and you are a buggy whip maker for horse drawn buggies. And the Ford automobile shows up. And you decide to lobby the Ford motor company to make the accelerators work with the buggy whips. So you whip the car and it goes faster. My guess is that wouldn't have worked too well.
Let me give you another very specific current example. The tesla car requires service once a year. The only liquid is the windshield wiper fluid. Technology does change the requirement for work and the kind of work that's needed. Now, at the same time, technology can also create new kinds of work and we're seeing that when we refer to the digital economy. Please remember there's more to our economy than just the digital part. There is still need for all kinds of other work. We are entering into a very interesting period where our lives are on average longer. We live longer which may mean that we can work longer. The implications of that are that we may need to learn more over a longer period of time because the need for work and the kind of work is going to change, thanks to technology. So my conclusion with regard to that is that our careers will no longer be go to school, go to work and retire. It will be go to school, go to work, go to school, go to work, go to school, go to work and it has to be continuous and available. The internet may be able to help that, but I don't want to suggest that all learning can be done in this remote way.
But nonetheless, this needs to continue learning is very important. If you think a little bit about the platforms that have become available to us to create new work, I will use Google examples just because they're more familiar to me. YouTube has created careers for people. The Google Cloud is a platform on top of which people build products and services for other people. They have created opportunities to generate revenue from the contents they put up on the net. The apps that show up in mobiles are often business opportunities for people. The Android operating system which we give away for free has become a platform that other people can build products and services on and so on and so on. There are other just as good examples from other areas and other sources. So we have this increasing array of tools through which to create work, but we still have the problem of attaching the right people to the work that needs to be done. This brings up another point.
David and I have been exploring for the last three years. I we call it innovation for jobs. We wrote a book on it earlier disrupting employment. You will find all the content of the book and our work there. What's important is that we have come to the belief that we shouldn't be trying to jam people into pre‑defined jobs. What we should be trying on figure out is: What can people do well and how do we fashion work for them to excelling? If you have ever worked in an environment where you have this annual meeting with your manager and the manager dwells on what you don't do very well and this is where you have to improve. Much more powerful thing is let's figure out what you do really well and figure out if we can put you to work doing that because that's better for everyone, including you because it is a more satisfying experience. So the idea we can adapt work to the people and their skills and capabilities seems to me a very important theme and maybe have an opportunity to work our way through that.
I will stop there because I think we have much more opportunity to discuss than to discurse, so to speak. So I'll stop.
>> MEGAN RICHARDS: Thank you very much, Vint. You have to choose your life‑long partner very carefully. If you are going to be married for 60 years instead of 30 years, this is a real challenge.
>> VINT: My wife and I just celebrated our 50th anniversary.
And we were asking ourselves okay. So how come that works. Also, where did all those decades go and I travel about 80% of my time. So we did the math. And it means we've only been married for 10 years on the average. So it's no big deal.
>> MEGAN RICHARDS: Let's see if Lorenzo is with us. Go ahead and speak.
>> Lorenzo: Thank you very much. First of all, I would like to mention what other people are saying about the sector we are promoting now for 10 years in a row workshop on this issue to show that we really think it's a assuming partner for the sector to approach and imagine this issue on work transformation. I have to say this is a quite complex issue because we have a place not to just a digital transformation, but it is also an important demographic. And this is some contradictory phenomena. Think about the distance of the society. We have a combination that has a longer life span and we determine future aging in regions of the world. We have an issue because people are still quitting jobs. We need to keep up with the living standards.
From this stand point, for instance, we look at migration. Migration comes from the younger population. And the labor and in their receiving countries. With we look at digital technology, I think that the extremely important to try to understand if we really think that the technology of work is only one side. The other work is displacement. He stated if they can be some type of a complimentary between humans and machines. In other words, helps and machines can compliment themselves. I am referring to what Michael Polangy. We know more than not we can tell. There is an interplay between ‑‑ (losing sound) computers are very good in replicating this knowledge. But they are not very good in promoting tasks with them, knowledge. I know that artificial intelligence has made progress and there is direction and still room. This is basically that the sector has been ‑‑ think about the construction industry. Although, this is quite a labor intensive sector, but helps still play a major role no matter if we're using cranes.
In other words, automation is complimentary construction workers. There are some interesting cases. General Electric is relying on machines. They traditionally make the majority of the revenue by selling industrial hard work. They provide machine and service to perform and task.
For instance, to provide services for the plane engines. It also has an effect on the changing work force. The work today has people and also softer people to be in the services and economy. I think that this is one way to look at this relation between machine and the human. They need to strongly reach to people. This is work in telecommunity that we're trying to do and I think this is also a very strong private partnership to try to compliment to allow this type of new relationship. Thank you very much.
>> MEGAN RICHARDS: Thank you, Lorenzo. Now we have Hlengiwe.
>> HLENGIWE MKHIZE: Previous background on what's happening. Let's look at the very commoditized type of work. It's happening on technology platforms. Free lansing and various names and even here you see sort of that gradation of work from how people and how do people make money on YouTube. It's because people in south Asia sit down and click on ads. So it is a very, very, very low‑income work even by south Asian standards. You move higher up, you work for half an hour. You create a logo for a company or you could create that gift and that can be significant income for a lot of people.
As you move higher up in the value chain, you could be inserting payment gateway on a website. You can be doing graphic design or whole website design. If you are really good at it, you form one on one or repeated relationship with the buyers and move your work offline. So there really is that whole range of work when you talk about micro work. We're starting this in south Asia.
For example, in Sri Lanka, we thought this is a huge opportunity for unemployed people and for people for whom flexible work is important. We find that in Sri Lanka, people are doing this on a part‑time basis. They do full‑time government jobs and sit in their offices that tells you about government work, but that's not the point ever the panel. They do this as part‑time work and choose when to work and how much to work. It's a huge narrative of exploitation and I think that is valid about how much these people make, but also gender based exploitation. Other researchers have documented in order to get paid, women need to do other things. Otherwise, you don't get paid. But what ‑‑ those narratives are valid.
But in a systematic study, what we find is that it is people who already have other income, very low‑income obviously in a full‑time work doing this having significant uptaking their income because of this. So, for example, if you look at average individual of $80 in the last time in Sri Lanka. It was up to $140 on top of that. People who work full‑time was a lot more, but the average was this much. There are real problems. The exploited end of this, which is the ad clicking and you can't get payment because you need to accrue $1,000 before you cash out, there's a skill problem because there are companies who charge and say we will teach you how to work online, but they teach you how to do ad clicking, not to move up the value chain. How to get your first gig online is a big, big problem and you never sold your skills online. You maybe need a friend to buy your first logo design. It's a PR learning thing. And we have real problems with getting cash because Sri Lanka doesn't allow PayPal which is the dominant payment on all of these platforms. So they're reduced to other modes of payment which take a lot more out of the money than they can get. What we also see through the more qualitative research and not the quantitative is that there is very soft skill absorption when people move up these things. It is preparing them for other work because when you negotiate, you keep your deadlines and things we don't learn in school in south Asia. It is not just about coding or designing something. The biggest problem is financial not being able to get payment, but also not having financial services. They can never get a loan by saying I'm a free Lancer and I earn $500 which is so high because of income. You cannot prove it. You need to come to this formalized economy in some way if they can take this up in a meaningful way. And there's also a low awareness and a huge opportunity.
In our survey, we found like 25% of the population had heard about this and most of them say yes. I would really like to do it, but I had no Internet connection and I have no skills are the biggest problems that they cite. So there's a huge thing for people who want to do capacity building to bring the people into the formal ‑‑ some form of formal employment. I'll stop there.
>> MEGAN RICHARDS: So perhaps in the discussion afterwards, you can give us an idea of solutions you see to some of the problems. That's very interesting. Let's go next to Gabriela Rocha. I am a partner at Laboratoria here in Mexico. Basically we identify young women from Latin America from low‑income backgrounds who demonstrate a lot of potential but have not had access to quality education because they're from low‑income backgrounds. And we train them to become software developments in about six months and Connect them with jobs in the job sector. I want to thank you for inviting me because I think it is an interesting example of a proposed solution in a way to the problem we've been discussing all morning which is how do we get ‑‑ there's rise in inequality and there's going to be a more low‑income population having to be employed in high skilled work which is work is going more towards high skilled people.
People mentioned robots. And I want to talk about three things. One of the things that continues to be a problem is higher education is still an extremely important path to a high skilled job. And it's a problem because low‑income populations don't have access to quality higher education. One because it is extremely expensive and they can't afford it and two, because the ones that are affordable don't give them the skills they need to have access to quality jobs afterwards. So not everyone in Latin America, very huge part of Latin America, not everyone has the luxury to spend 4 to 5 years in a university that later won't give them the jobs they need and that's why they drop out of school. So we have to start thinking of alternatives to train and educate the population to fill the jobs in the future. Just so you have an idea, in Mexico, 80% of youth in poor households don't go to college. When you consider poor households being the large population, we need to find jobs for these people. I work closely with tech companies and they're constantly complaining that the universities aren't teaching what they need from their developers. So it's a problem because you require university, but universities aren't giving you what you need. And so that's going to continue to be a problem. Something that Vince said earlier is so important. We have seen that in our own experience with our students. We're so obsessed with teaching technical skills and yet every employer I have spoken with complains about the lack of soft skills the employees have. And I think we're so focused on vocational training was mentioned is so focused on low skilled technical work and no one's providing the educational fundamentals for soft skills that are super important and important to learn. We have an awesome teaching team, but we encourage students to learn on their own and Google things so once they're in the work place, they're able to continue learning and continue to grow in their profession.
And yeah. Finally, I think we need ‑‑ there's a huge shift from low skilled to high skilled work and I think we need to really understand that there is so much potential in a population that we've currently assuming that they will automatically do low skilled work. We need to find and shift vocational training to high skilled work, which is possible because we have seen it at Laboratoria. We have seen students going from corner shops, call centers, mechanical, they help out with their family's businesses which a lot are like mechanical techs. So in high skilled work, so I think it's important that we start considering the possibilities for the population in high skilled work and obviously shift the education towards that. So thank you.
>> MEGAN RICHARDS: Thank you very much. I think there's another important element too and that is the role of women. Many of these soft skills that you refer to are learned ‑‑ I'm sorry to say it ‑‑ at your mother's knees or in the family. Let's call it that. And the more women that are in the work force, the more they're adopted even before you go out into the wide world. I'm exaggerating a bit obviously, but I don't think you can go to school or learn the soft skills. I think there's an element to that too. Let's open up the floor to questions. Absolutely.
>> I can't resist this observation. I have probably the best chief of staff in the world and I was trying to figure out what is it that makes her so good. She used to be a cub scout den mother and it turns out that's how you manage engineers.
>> Megan Richard: That's the only way to manage engineers. Somewhere there's a mic. Stand up so I can see you. And again, please repeat your name because someone may not have heard you the first time. Make your questions short. End with a question mark or if you're making a comment, a brief one. How did we lose our microphone.
>> STEVE: Okay. Steve with Labor Net USA, San Francisco. I think we have to look at technology is a beautiful thing potentially. Freedom. And then technology was presented, computerization. There was the idea that people would have free time and develop their skills and talents, which is what we want to see. But the reality is quite the opposite in Silicon Valley. The workers are on the internet 24 hours a day and you don't have freedom. You have greater expectation using the Internet. That is something you have to address. You could in the United States have a six‑hour day. You have to have more workers and more freedom, but the opposite is taking place. Workers are now working 12, 14 hours a day and two or three jobs. This is the reality for millions of workers when you want to look at Trump. The other is education. You have to have literature, art, other things, but what has happened as well is privatization of education. Private tools corporatizing education so they want to make a profit. They're getting rid of art and culture and other things like that in the United States and in programs.
For coding, for example, we can make money from coding or you can get a job doing that. I think we have to look at what is the effect of education and technology in education? In Mexico, senior teachers are being driven out of work for younger teachers and computers are being used to say we need less teachers. These are contradictions developing in our new world economy. Thank you.
>> MEGAN RICHARDS: Any other questions or comments before we turn to the panel? Please go ahead. If you are behind me, you have to ‑‑
>> JAMES: Hello, everyone. Hi. My name is James. I'm from Kenya. There's one thing I feel that is not being talked about and this is about access to credit.
In Kenya, most of the people working the digital economy ION and most of them can be able to access credit if they see that each economy or the business in each economy needs and have the right support and probably sometimes like the lady ‑‑ I can't remember which is ‑‑ but some people don't get ‑‑ (Multiple speakers at once) they don't get paid enough money. Sometimes they just need support to access credit. So I think my question is: How ‑‑ this is ‑‑ I am throwing it out there. How do we make sure that young people in the economy, especially in developing countries have access to credit?
>> MEGAN RICHARDS: I think in the case of Kenya, it helps with that mobile payment system, but I don't know if it helps in the credit aspect.
>> It certainly does. One thing that they have facilitated is that for people especially for really, really end businesses (sound cutting out) (no sound) so people pay in advance and then (sound cutting out) because, of course, cash is complex and then cash and (sound cutting out) and especially because these people sometimes are not the agency to say (sound cut out)
>> I just have a quick response. The access to credit is a real problem for all people who work in any size sort of sector. We have line workers who don't have asset in order to get credit. We do not have a practice of cash flow landing or real credit assessment and that's a real problem. So one of the solutions that is emerging in Brazil or even the work we do is to use other forms, order proxies of credit worthiness and one of those is mobile phone pop ups. The fact that you can maintain a transaction of record and keep topping up your phone is a proxy for your credit worthiness. That picked with micro loan repayment schedules.
For example, they can create learning alga rhythms which then predict people's paying back alone. And real work is coming out of Brazil. I can refer you to the specifics and big data work. We're trying to do that, but banking institutions and one of the learns repeatedly that we find in study micro enterprises and micro work is the institutions really need to move to at least cash flow based lending. Owners can help, mobile operators can help. This is not eye solution. This is something we're trying to do.
>> MEGAN RICHARDS: Thank you very much. Mary, you had a question and then Jenson.
>> MARY: My name is Mary from Nigeria. My question is what the call operation between the education industry and the business or the tech industry. Is there any (low sound) they have this opportunity to web access and what is happening in the tech industry. The collaboration. I am so happy that many people from the universities where we're teaching students what ‑‑ do we get the collaboration and then I want to know: How do you identify that you want to reclaim or bring? You said. Do we do away with formal education? All right? And if we don't, do you still send them to do formal education because there could be a point that formal education skill would be needed in whatever they do. And the way you say for high skilled jobs, what do you define as high skilled jobs? Thank you.
>> Thank you, Mary. Maybe I can comment on that very briefly before I open it up to the panel.
In Europe, we have started a few years ago called the grand coalition for digital job. Sounds very grand. But it's been expanded now further and it brought together educators, governments, tech industry, ICT, experts, Technical Community and local people to try to make sure that digital skills were developed better and there are some wonderful examples. It includes also the non‑ICT sector. It's a drop in the bucket, but it is working and it means everyone has to work together. There are many wonderful examples of completely unemployed uneducated people that have been brought through the job centers and trained quickly in coding and then go to jobs,less same thing Gabriela is talking about.
>> I hope people don't think that the only job you can get in this economy is writing software. That's just dead wrong. It is fair to say that there will be a lot of software surrounding us. I wanted to make two observations.
In the U.S., we're maybe discovering that having a college degree may not be as important as it was thought to be for two different reasons. One is costs are very high and students who graduate with heavy loans are really at a disadvantage. It is hard for them to start a new business. It really suppresses instinct, but the other reason it might not be necessary is that format of intense education followed by nothing may not be the right way to approach learning. So we may end up with less quantity and intensity, but a period of preparation and soft skills, learning to learn and all that. And then you keep learning as the jobs change and as your career interests alter. So I think we really are entering into a very interesting and appear opportunistic moment when the old paradigms really don't work and we have to recognize that and get creative.
>> MEGAN RICHARDS: I think Gabriela wanted to speak, Eli wanted to speak.
>> GABRIELA ROCHA: I will be brief. I wanted to answer your question. So, first of all, how do we identify these women? In Latin America, people don't have a lot of things, but they have social networks. So most of our marketing or advertisement of our program is done through social media and we ‑‑ we basically inform the general public of what we're doing and we target to a specific population, which is 18 to 35‑year‑old women who think this might be an interesting opportunity for them. So that's how we identify them and then they go through a rigorous election process before we select our students.
Your second question: Do we do away with formal education? Absolutely not. I'm a product of formal education. I'm not suggesting that we need to get rid of it. I'm suggesting there need to be some major reforms in formal education so that it makes sense for the changes in society