Digital technologies allow people to take on risks and explore new opportunities

By 31 January 2019 January 14th, 2020 Digital cooperation, Digital inclusion, Entrepreneurship

In the era of digital technology, the structure of production as well as the interaction between humans and machines is being redefined. The diffusion and application of digital technology can increase productivity in an unprecedented manner, with potential to reshape the role of humans in the function of production. Jobs are the drivers of development and pillars of resilience for people. Five years ago, the World Development Report (WDR 2014), Risk and Opportunity – Managing Risk for Development, highlighted the role of enterprises in supporting people’s risk management by absorbing shocks and exploiting the opportunity side of risk. There have been heated debates on how technology may lead to risks, such as job loss and structural changes of employment. While the risks are real, the estimates of the impact of digital technology on employment vary widely, from substantial job loss for both skilled and the unskilled workers, to potential job gains thanks to the complementarity of humans and machines, as well as the income and wealth effect derived from higher productivity.

The World Bank and the Alibaba Group have been conducting joint research to examine how China has harnessed digital technologies to contribute to growth and expand employment opportunities through e-commerce development. Early findings show e-commerce fosters entrepreneurship, including for the youth and women, and contributes to growth in Taobao villages. Most people, especially e-households, in Taobao villages perceive their social status as equal or higher when compared to five years ago, and they believe they will have equal or even higher social status two years into the future. While it is still early to judge the impact of e-commerce on total employment, or the additionality of e-commerce to the economy as a whole, a few examples of innovation in the e-commerce platforms indicate possible channels how digital technology can create new business and employment opportunities, as well as pave ways for new opportunities. Read more

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