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The Year Ahead 2016

The World Economy’s Labor Pains

The ongoing global economic slowdown, which began in 2008 with the financial crisis in the United States, could set a new endurance record. What is certain is that with growth stalling in Japan and slowing in China, and with Russia in deep crisis and the eurozone still barely recovering, the world economy is not yet out of the woods.

WASHINGTON, DC – The ongoing global economic slowdown, which began in 2008 with the financial crisis in the United States, could set a new endurance record. What is certain is that with growth stalling in Japan and slowing in China, and with Russia in deep crisis and the eurozone still barely recovering, the world economy is not yet out of the woods.

This “persistent recession,” as well as some of the world’s political conflicts, are manifestations of a deeper shift in the global economy – a shift driven by two kinds of innovations: labor-saving and labor-linking.

Although labor-saving innovation has been with us for a long time, the pace has picked up. Global sales of industrial robots, for example, reached 225,000 in 2014, up 27% year on year. More transformative, however, is the rise of “labor-linking” technology: digital innovations over the last three decades now enable people to work for employers and firms in different countries, without having to migrate.

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  1. Andia/UIG via Getty Images

    No Robo-Apocalypse

    Growing fears that automation and artificial intelligence will destroy jobs and create a “surplus population” are understandable. But whether the future of work will serve the many instead of the few is not up to the robots; it is up to us.

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