Seite - (000015) - in Disrupted Development and the Future of Inequality in the Age of Automation

1 INTRODUCTION 3 “the share of occupations that could experience significant automation is actually higher in developing countries than in more advanced ones, where many of these jobs have already disappeared.” However, they note that the impact will be moderated by wage growth and the speed of technology adoption. There are numerous estimates of job displacement and much in the way of gray literature. However, these estimates are based on contesta- ble assumptions and analysis of developing countries is often limited. Furthermore, in contrast to a widespread narrative of technological unemployment, a more likely impact in the short-to-medium term at least is slow real-wage growth in low- and medium-skilled jobs as work- ers face competition from automation. This will itself hinder poverty reduction and likely put upward pressure on national inequality, weak- ening the poverty-reducing power of growth, and potentially placing the existing social contract under strain, or even possibly limiting the emergence of more inclusive social contracts. How developing countries should respond in terms of public policy is a crucial question, affecting not only middle-income developing countries, but even the very poorest countries given the automation trends in agriculture. 1.2 the contribution And structure of this book In light of the above, the objective of this book is to do the following: First, to outline a set of schools on economic development and revisit the Lewis model of economic development; second, to sketch the con- temporary context of deindustrialization and tertiarization in the devel- oping world; third, to survey the literature on automation; and in doing so discuss definitions and determinants of automation in the context of theories of economic development and assess the empirical estimates of employment-related impacts of automation; fourth, to characterize the potential public policy responses to automation and fifth, to highlight areas for further research in terms of employment and economic devel- opment strategies in developing countries. The book is structured as follows. We set the scene in Part I (Chapters 2 and 3). We discuss the context for contemporary economic development in the developing world. Specifically, Chapter 2 gives an overview of schools of economic development theory and revisits the Lewis model of economic development. Chapter 3 then outlines the contemporary context of deindustrialization and tertiarization in the developing world to set the scene.