Technology is racing ahead at unprecedented speeds, yet governments and policymakers can find themselves outpaced. What challenges does the digital economy present to social and economic cohesion?
As a Global Voices research scholar to the Organisation for Economic Co-operation and Development, PwC’s Gulandam Khan attended the 2017 OECD Forum in Paris, which was looking at how government and corporations can work together to bridge divides.
The rising tide of populism, nationalism and low levels of trust in government were key focuses of June’s 2017 OECD Forum. In an often turbulent week of discussions, hosted by the Organisation for Economic Co-operation and Development (OECD), which promotes policies that improve the economic and social wellbeing of people around the world, government and industry leaders worked through what it means to create an inclusive global society.
At this year’s event, globalisation was firmly in the cross-hairs, but it was the technology behind it that raised the most questions. Has the speed of technological advancement created greater inequalities than it has levelled in the name of ‘bringing the world together’? Or, as others argued, is it government’s inability to keep up with technology that is the real culprit when it comes to growing societal divides?
If so, how do we prepare governments to better match the pace of technological advances and bring the two together for inclusive societal and economic growth? Three key areas where this (lack of) collaboration between government and technology were discussed revolved around the gig economy, artificial intelligence and the impact of blockchain on democracy.
The future of work
The shape of employment is changing rapidly. Globalisation, automation, emerging technology, the rise of the digital economy and gig economy are transforming what it means to hold a job.
High levels of unemployment following the financial crisis have significantly contributed to deepening economic and societal divides. Today, one in three jobs in OECD countries are non-standard: i.e. part time, temporary, or self-employed¹.
Reasons for this include the automation of jobs, on-demand economies increasing the demand for temporary or part-time workers, and a growth in the number of working women, 40% of whom work part time. Whether these changes lead to a brave new world or a harsh dystopian reality was hotly debated, understandably, given their inherent opportunities and threats. While the benefits to consumers in the convenience and accessibility of cheaper and more customised services are immense, government policies are yet to adapt to the dynamic nature of the gig economy to protect those who will be delivering them.
Is policy failing to keep up with the gig economy?
The gig economy is changing the nature of today’s workforce. More than half of self-employed citizens (aged 15-64) in the EU are not entitled to unemployment benefits and 38% are not entitled to sickness benefits. Of self-employed women aged 15-49, 46% are not entitled to maternity benefits². It’s clear that despite the gig economy being on the rise, governments and policymakers have not yet adapted to protect the employment conditions and rights of nearly half the working population.
Potential solutions floated to solve this widening inequality gap included the concept of portable benefits that follow workers from job to job, a minimum income, increased career guidance and deeper active social spending, but few countries are yet to introduce anything close to such mechanisms. The concept of a Universal Basic Income (UBI), where citizens would receive an obligation-free basic income regardless of working status, was discussed, but proved divisive³.
Who regulates the robots?
Artificial intelligence was another fierce topic of discussion at the forum that further highlighted the tech-policy divide. Experts warned that the likely impact of AI in the years ahead is still underappreciated by policymakers and the subsequent discussions seemed to illuminate the truth of this statement.
It was widely acknowledged that AI, as well as big data and increases in computational power, is set to transform entire sectors of the global economy and will lead to in-depth societal changes – many with potential adverse social and economic consequences. But when it came to the question of who should be accountable for the equitable distribution of the benefits of AI, there was no clear answer.
AI’s disproportionate impact
The geopolitical impact of artificial intelligence is difficult to predict, but this technology is likely to replace labour from developing countries at disproportionate rates, while the control of such technology, its patents and data remains in the hands of developed nations.
It was argued that addressing this idea of ‘winner-takes-all’ technology is urgent, particularly given that the first companies and governments with access to big data and AI will reap their rewards without measures in place to distribute the economic gains.
With government and policy being largely reactive to such regulation, are corporations gaining sole control? And are they therefore accountable for the adverse social impacts of automation? Should they be? In order to minimise potential societal risks, policy frameworks may need to take into account fairness, transparency and accountability as well as safety and controllability.
With policy not currently able to keep up, many corporations have resorted to their own sets of ethical guidelines. While some of the world’s largest global organisations are joining forces to combat the growing divides created by AI, discussion at the OECD centred around the regulation of AI processes by government bodies4.
Disrupting democracy with blockchain
The opportunities for technology and innovation to bridge divides and create inclusive societies sits at the heart of how governments are run. Unfortunately, when this issue came up at the OECD Forum, the consensus was clear: we are 21st-century citizens, interacting with 19th-century institutions, based on 15th-century technologies.
The forum aimed to go beyond the simple discussion of how digitised government could improve experiences for citizens wanting to engage. It wanted to rethink the technology behind the system itself – a debate that has been building over the last decade as the civic tech movement.
The way democracies have been run has remained the same for decades, untouched by the disruption that has affected much of industry. The democratic system as it stands is coveted for its ability to speak for everyone, so preserving its integrity has always been tantamount. Blockchain has the power to shift the power distribution in a democracy, potentially allowing it to become even more democratic.
A more democratic democracy
For one, blockchain has the power to enable incorruptible voting. The creation of fake identities for vote-tampering is one of the simplest ways to corrupt a democratic system. The creation of a blockchain ID for citizens would make it possible to record any and all interactions between citizens and government, and authenticate those transactions at the same time. Time stamping and notarisation, already possible through Bitcoin – which runs on a blockchain – means transactions could be certified as authentic and impenetrable to hacking or forgery.
Many startups are already leveraging the power of blockchain to decentralise identity and manage it as a cryptographic hash (where a message is recreated as a fixed alphanumeric string), which is stored on the blockchain. Discussions at the OECD looked at ways this could be utilised for sovereign identity management at a government level, and how personal programs could be self-managed by citizens to guarantee ownership and control over personal data.
Blockchain would also allow for a ‘liquid democracy’, enabling direct or indirect dynamic participation in voting. Instead of a citizen having one vote, essentially being ‘for’ or ‘against’, their choice could be more dynamic, in line with the more complex societal issues we now face. Voters could also delegate their votes on issues to trusted advisors, vote on proposals in real-time, and participant in more consistent, rapid, and dynamic referendums issued by government – essentially rendering democracy more democratic.
The opportunity for policy
The future of work, artificial intelligence, and digital democracies are all just a small part of a much larger debate on the challenges of globalisation. Yet, when it comes to technology, the need for public-private collaboration between corporations and government was clear across all issues.
Policy needs to be written at the same speed and sophistication as technology is advancing. When that happens, governments will be in a place to protect the distribution of wealth and share the benefits equally, ensuring the creation of inclusive societies. It’s an exciting time to be at the forefront of technological advancement – as long as it works for everyone.
Gulandam Khan is a manager in PwC’s Digital Services, and is currently a Global Voices research scholar to the OECD in Paris. She is investigating the impact of automation and digitisation on the future of work, and how technological advancement can be used to bridge divides and create inclusive and productive economies and societies.