In the present era, digital technologies are doing everything for the human brainpower. They are allowing us to overcome all the limitations rapidly and open up new frontiers at an unprecedented speed. All this has resulted in the decoupling of various non-user related things to the background jobs. This era is better for one simple reason that digital technologies have helped us produce more, more education, more health care, more entertainment and more goods and services that we value. On the other hand, digitization has some thorny challenges. It has decreased the demand for low skilled information workers. There are some unpleasant side effects to this. It is a new type of economic disruption. There is no such economic law that says that technological progress benefits everyone equally. Most of the times it can replicate the valuable ideas, innovations, and processes at a very low cost.
Disruption In The Cycle Of Prosperity
As per the data, productivity is rising but many of the people’s income is stagnant and even falling. What does it make you think? The four key ingredients of an economy’s health are per capita income, number of jobs, labor productivity, and median household income. For more than three decades after the second world war, all four went up at a rapid pace in perfect lockstep. However, in 1980, the growth and median income began to spurt up. Then, it turned negative. The job growth in the private sector also slowed down because of the recession. Now, you can easily say that the two halves of the cycle of prosperity are not married to each other anymore. Productivity and GDP are on the upward trajectory, however, the income and job prospects for the workers have faltered. Then, there was a lack of demand for unskilled workers which helped to push the wages to lower prices. This led to income inequality. However, the technology kept evolving.
Winners and Losers in the Game
Does digital technology for digitization creates a winner for all economies? We were not the characteristics of the first machine age, but these are quite standard when it comes to digital goods, unusual outcomes and others. Talking about the US economy, you will say that from 2002 to 2007 the top 1% of the population ripped two-thirds of the gains from economic growth. Who is this 1 %? These are senior executives, entrepreneurs, icons of sports, media, entertainment, and law. Why the top 1% and 19 % of all the income in the US, the top 0.01% saw the share of national income rise. However, it is very hard to get reliable data and income levels higher than that. As per the evidence, the divergence in incomes is growing with each subset of the superstars. For this, there are many factors including the high rise of the enormous organizations that give their top executives large compensation along with tax cuts and other benefits. The technology sector has also created many will be entrepreneurs. Technology has amplified the effects of income decisions in organizations. The superstar biased technological change has been observed to be an increasingly important trend.
The response of the business
How well is the business coping with the rapid advancement in technology? With advancement and digitization, knowledge is continuing to raise your head. However, there has been a drop in business dynamism. As a matter of fact, there is any possibility for entrepreneurs to think of innovative ways of using human beings in the applications by blending them with technology. The business has not been creating new jobs effectively in the past.
One of the best ways to respond to this flexibility is to roll with the punches. There might be a decrease in business dynamism and labor fluidity. This keeps you from responding to the coming technological surge. One of the intellectually easy things to do is to look at the existing processes and ask yourself how can a machine do that part of the job? It will definitely take a certain amount of innovation and a little bit of
work to do that but it definitely creates value. It will take you a lot more creativity to say that how can I have this machine and human work together to do something that has never happened before to add some value in the market? In the present era, you need to answer questions like what kind of economic environment is the best for using the new digital technologies?
If you really want to create something that is beyond the great decoupling then you must focus on five things. The first one is education. It is very important for the primary and secondary education system to be practical about the things they teach for relevant and valuable skills that computers are not totally good at must be taught. Problem-solving, creativity and interpersonal skill must be developed in the coming generation. The second thing is the infrastructure. The foundation of growth will always be world-class roads, networks, and airports. These are the investments for growth in the future. The third thing is entrepreneurship. The young fast-growing businesses are the major source of new jobs and employment in the youth. It is our duty to bring more startups and entrepreneurship programs for beginners. The fourth focus should be on immigration. Immigration founded organizations have been really great when it comes to job creation. The policies must not be too restrictive and bureaucratic. V important thing is research. The government has a role in supporting the original early-stage research.
Funding for the research should be made better. One of the strongest productions is that digitization will bring the universe more wealth and abundance. The technological progress is extraordinarily powerful. It is not destiny and wants into a place of perfection or an unwanted future. Because in the end, you must understand that technologies are merely tools and the power to do the rest lies in human beings.