World Bank Says Internet Technology May Widen Inequality (nytimes.com)

HughPickens.com writes: Somini Sengupta writes in the NY Times that a new report from the World Bank concludes that the vast changes wrought by Internet technology have not expanded economic opportunities or improved access to basic public services but stand to widen inequalities and even hasten the hollowing out of middle-class employment. "Digital technologies are spreading rapidly, but digital dividends — growth, jobs and services — have lagged behind," says the bank in a news release announcing the report. "If people have the right skills, digital technology will help them become more efficient and productive, but if the right skills are lacking, you'll end up with a polarized labor market and more inequality," says Uwe Deichmann. Those who are already well-off and well-educated have been able to take advantage of the Internet economy, the report concludes pointedly, but despite the expansion of Internet access, 60 percent of humanity remains offline. According to the report, in developed countries and several large middle-income countries, technology is automating routine jobs, such as factory work, and some white-collar jobs. While some workers benefit, "a large share" of workers get pushed down to lower-paying jobs that cannot be automated. "What we're seeing is not so much a destruction of jobs but a reshuffling of jobs, what economists have been calling a hollowing out of the labor market. You see the share of mid-level jobs shrinking and lower-end jobs increasing."

The report adds that in the developing world digital technologies are not a shortcut to development, though they can accelerate it if used in the right way. "We see a lot of disappointment and wasted investments. It's actually quite shocking how many e-government projects fail," says Deichmann. "While technology can be extremely helpful in many ways, it's not going to help us circumvent the failures of development over the last couple of decades. You still have to get the basics right: education, business climate, and accountability in government."

Comments

Bullshit

[Anonymous Coward]

The same argument could be made for reading.

Re:Bullshit

[JoeMerchant]

The same argument could be made for reading.

Don't know whether to mod up or reply...absolutely true. Here's the World Bank, creator of debt among people who have no money, arguing that sharing information more freely will widen inequality. Though their logic may be sound if you select your samples very carefully (the richest will get richer), I can't see how the world's poorest having access to history's accumulated knowledge including up to the second latest research, more extensive and easier to access than any pre-internet library that ever was, even if you have to walk a day and wait in line for hours to get access, could be anything but good for the world's poorest people. Sure, people with better access will have more advantage, but that doesn't mean that removing access for all would in any way benefit the least fortunate.

Just look at China

[jonsmirl]

China is the top country for poor people moving into the middle class. A lot of that movement is from millions of people setting up mom and pop shops. Cell phones are very important to the functioning of this segment of the market and cell phone are a window into the Internet. So I'd say they have it backwards. They are focusing on the small number of tech lottery winners and ignoring the major improvement cell phones has had on ordinary people's lives.

Re:And now for something really controversial

[Anonymous Coward]

The difficulty with the idiocracy hypothesis is not that the less intelligent outbreed the more intelligent (so you have fewer captains of industry and more rank-and file... the world will survive) it's that the intelligent are having to subsidize an ever increasing amount of the less intelligent.

Yeah yeah yeah, 1%; that's not the point. From laws to protect idiocy from itself, which end up as hindrances to find better solutions, to intelligence being looked upon as near witchcraft; society is heavily geared towards mediocrity so the pinheads have a fighting chance.

But it comes at the cost of further development, and especially when the intelligent figure "why bother" to explore new horizons, especially when they have to fight off the idiot hoard as well.

Regression towards mean is a scary prospect when the lower bound keeps sinking.

Central Banks Responsible for this

[trout007]

I worked in automation equipment for many years. Companies would typically come to use when they needed to expand capacity. When we would work up a quote we would look at their current process and come up with several options from very simple conveying system with manual tool stations for the operators to fully automated systems. Obviously there was a huge capital cost difference between these options. Two big factors that went into the recommendation were the labor rates and interest rates. The companies were looking for a specific return on investment. In a free market when interest rates are low and labor rates are high due to low unemployment and lots of savings it is better to automate as the interest on capital costs are low. When the interest rates are high and labor rates are low due to high unemployment and low savings it is much better to hire people and go with manual stations. This is as it should be and would lead to sustained growth.

But when the Central Banks lower interest rates way below the market rates it makes automation cheap no matter what is going on in the economy. This is the situation we are in. It is cheaper to automate even though labor rates are low and there is low workplace participation. Allow rates to return to their market levels and this will change and we can go back to sustainable growth. Of course we won't do this because it would hurt the Wall St. Banks and politicians pocketbooks.