Participant roundtable series: Securing livelihoods

Our future of abundance—and joblessness

Within two decades, we will have almost unlimited energy, food, and clean water; advances in medicine will allow us to live longer and healthier lives; robots will drive our cars, manufacture our goods, and do our chores. 

But there won’t be much work for human beings. This is a future we need to be aware of—and prepare for.

Self-driving cars will be commercially available by the end of this decade and will eventually displace human drivers—just as automobiles displaced the horse and buggy—and will eliminate the jobs of taxi, bus, and truck drivers.  In the next decade, drones will take the jobs of postmen and delivery people. 

Robots are already replacing manufacturing workers. Industrial robots have advanced to the point at which they can do the same physical work as human beings.  The operating cost of some robots is now less than the salary of an average Chinese worker. And, unlike human beings, robots don’t complain, join labor unions, or get distracted.  They readily work 24 hours a day and require minimal maintenance.  Robots will also take the jobs of farmers, pharmacists, and grocery clerks.

Medical sensors in our smartphones, clothing, and bathrooms will soon be monitoring our health on a minute-to-minute basis.  Combined with electronic medical records and genetic and lifestyle data, these will provide enough information for physicians to focus on preventing disease rather than on curing it.  If medications are needed, they can be prescribed based on a person’s genome rather than a one-size-fits-all basis as they are today.  The problem is that there is now so much information that humans cannot effectively analyze it.  But artificial intelligence–based physicians such as IBM Watson can. 

The role of the doctor becomes to provide comfort and compassion—not to diagnose disease or to prescribe medications.  In other words, computers will be also taking over some of the jobs of our doctors, and we won’t need as many human doctors as we have today. 

At best we have another 10 to 15 years in which there is a role for humans.  The number of available jobs will actually increase in the U.S. and Europe before it decreases.  China is out of time because it has a manufacturing-based economy, and those jobs are already disappearing.  Ironically, China is accelerating this demise by embracing robotics and 3D printing.  As manufacturing comes back to the U.S., new factories need to be built, robots need to be programmed, and new infrastructure needs to be developed.  To install new hardware and software on existing cars to make them self-driving, we will need many new auto mechanics.  We need to manufacture the new medical sensors, install increasingly efficient solar panels, and write new automation software.

The utopian, Star Trek, future we have long dreamed about is finally within sight. The only question is whether the human race will focus on uplifting itself through knowledge and the Arts or self-destruct because it doesn’t know what to do with itself. 

These are issues we addressed at a Rockefeller Foundation-hosted meeting in Bellagio, Italy, in August. Government, think tanks and industry all have a role to play to ensure that humans from all walks of life benefit from technology.  And that our knowledge and skills support both us and a changing world.

The future looks bright – if we properly harness human intelligence.

Vivek Wadhwa, Fellow, Stanford University Law School

Schools, technology and agriculture:  A Case of a South African rural community

Like most of Sub-Saharan Africa, South Africa grapples with the challenge of providing employment to its youthful population. Over half of the country’s unemployed are young people aged 35 and below. This burden falls largely on rural youth, whose hopes lie in cities, as very limited social and economic opportunities exist in rural South Africa.

In response, the South African government has prioritised rural development through agricultural reform. However, young people show very little interest and generally do not turn to the agricultural sector for career prospects.

Amid this rather grim picture, some bright minds at the Council for Industrial and Scientific Research (CSIR), a South African government agency, are creating hope in a rural community through an innovative approach that involves mobilizing local and external resources including land, human capital, technology, and financing to create a vibrant local economy while seeding future champions of agriculture.

The government-funded initiative, known as the Technology for Rural Innovation and Education Development (Tech4RIED) is a Local Economic Development (LED) approach that is gaining traction in the development discourse, moulding young minds, and poised to contribute vastly towards securing livelihoods in the present and the future.

Pioneers of the Tech4RIED approach gave a new meaning to the expression, “To build a nation, build a school” by Nobel Prize-winning economist Amartya Sen, when they embarked on this initiative. The heart of this novel model is an agricultural school, as a catalyst for LED. The school is the foundation of varied critical resources including land, facilities, young minds and teachers which when combined with external resources such as financing, technology and development expertise is essentially a school-based small enterprise incubator.

The incubator is managed by a group of local community leaders with expertise who are collaborating with the school’s agricultural team. Together, the school team and incubator management provide two main services. Firstly, they deliver the agricultural curriculum to grade 11 and 12 learners through classroom and practical training. Secondly, they exploit the land to explore farming practices and experiment with innovative agronomical practices. They do this while improving the delivery of small business management support and leveraging Information and Communication Technologies (ICT) as well as access to markets, which are extended to small scale farmers in the community.     

The fusion of these two platforms produces grade 12 learners who have the necessary academic knowledge and practical abilities that enable them to partner with community small scale farmers and access services from the incubator to improve the performance of their businesses while putting food on family tables.         

A new phenomenon has begun to grow, in this small rural community, where young people take a keen interest in agriculture;  community small holder farmers can access a suite of services and bright young minds that enable them to secure livelihoods for both food security and income generation. If the Tech4RIED continues on this path, the future of securing livelihoods in rural South Africa looks brighter.                  

Busisiwe Ntuli, Director, Technology for Sustainable Livelihoods, Department of Science and Technology, South Africa

Securing Livelihoods

Millions of people's livelihoods took a hit in the wake of the global financial crisis and remain fragile in many parts of the world as the global economy struggles with sluggish growth and a jobs-poor recovery. But if livelihoods appear to be perched on unstable ground now, how does the situation today look when viewed from the longer term perspective of 2030?

This was the central question explored by experts from across the world at the Rockefeller Foundation’s Bellagio Centre in Italy earlier this year, at a meeting organised by the Foundation, the OECD Development Centre and the Economist Intelligence Unit.  More specifically, participants challenged themselves to think about ways to secure livelihoods in a shifting world.

Since that event, the OECD team from the meeting has been establishing a baseline, measuring where livelihoods stand today so that progress or decline can be tracked over time. The OECD is also examining major trends that may affect the future of livelihoods to see how they may evolve and interact. These trends include low growth, demographic diversity, resource stress and new contours of conflict.

But the dovetailing of demographics, climate change—and new technologies will disrupt livelihoods most in the next ten to fifteen years.

While most high- and middle-income countries will age, many countries in the developing world will experience a youth bulge as their populations continue to grow, particularly in the low-income countries of Africa and South Asia.  Through 2030, Sub-Saharan Africa’s labour force grows by about 8 million people a year, South Asia’s by 12 million a year. How will these millions of young people entering the labour market make their living? In high and middle-income countries, jobless growth is impacting higher skilled jobs, as they become more automated, reducing social mobility and squeezing the middle classes. Can enough jobs be created, and what will be the consequences if they are not?

As for future climate change impacts, today’s highly damaging and protracted droughts will disrupt livelihoods for years to come. By 2025, two in every three countries are estimated to become water-stressed; an estimated 2.4 billion people will live with absolute water scarcity. Particularly affected will be North and South Africa, and South and Central Asia.

Uncertainty about future developments should not be used as an excuse for inaction. The question facing governments is how to turn such foreseeable impacts from negative to positive.

To ease growing pressure on livelihoods, policymakers can use foresight to find creative and collaborative solutions.  Smarter strategies for securing livelihoods will centre on building the resilience of individuals, their communities and global systems.

Globally, we need international agreements to manage the old and new global commons that underpin livelihoods, such as biodiversity, water, climate and the new information commons. At the national level, education and welfare systems can be redesigned to enable opportunities for work for all. And, locally, new schemes for financial inclusion could help seed a new generation of young entrepreneurs and start-ups to cater to the needs of low-income populations.

These ideas and more are explored in the forthcoming OECD Development Centre-Rockefeller book, “The Future of Securing Livelihoods”, which will be released in April 2015. 

Carl Dahlman, Head of Global Research and Thematic Division, OECD Development Centre and Angela Wilkinson, Strategic Foresight Counsellor, OECD

Hand up or hand out? How can cash transfers support livelihoods?

Cash transfers often get a bad press. What sells papers? Stories about benefit cheats, welfare traps and families spending social security payments on alcohol and cigarettes sell papers.  It’s easier to look down on people living in poverty and assume they are lazy and waiting for governments (or aid agencies or NGOs) to help them – and to believe that their own lack of skills and knowledge prevents them from using cash transfers productively. 

But challenging this lazy thinking by looking at the evidence uncovers a very different story - one in which cash transfers enhance the productivity of households, increase successful job-seeking, and allow productive investments in livelihoods.

Under the right circumstances, people use cash transfers in numerous productive ways.  They purchase more and better quality food to improve nutrition in their families. Kids in school concentrate better when their stomachs are full and adults get sick less often and are more productive if they are well nourished.  Families invest in human and capital assets that, over the longer term, increase their productivity. Parents invest in their children’s education – and their long term employment prospects – by paying registration fees for school enrolment and by buying school uniforms and books. And households rent land, buy small livestock to rear and grow, and purchase bikes or carts to get their produce to market.

When are the circumstances right?  When cash transfer programmes are designed well and implemented right.  In most contexts this means delivering transfers regularly (every month), reliably (the right amount at the right time), with a meaningful transfer amount (small transfers don’t bring big transformations), and reasonable duration (years, not months).This also means covering enough people forlarger scale effects. More cash in the market = more demand = more goods and services provided = more jobs.  If these features are right, cash transfers can have a huge impact on people’s livelihoods.  And when programmes do not deliver these positive effects, the evidence points to design problems – but don’t blame poor people for that.

Do poor people become dependent on cash transfers? Very rarely.  In developing countries, cash transfers are just not reliable enough for anyone to depend on them, nor do they transfer enough to allow people to do much more that buy a little more food.  If people just sat waiting for transfers … well, they’d be waiting a long time.  In fact, the opposite of dependency is true: those receiving cash transfers increase their labour market participation, seek jobs more, and have greater success finding work.  When people stop working dependency is not at play. Rather people (especially children) who previously worked in dangerous or exploitative working conditions find a way out, or child labourers stop working and return to school.

So, what are we waiting for?  We know how to get it right – how much to deliver, when and to which people – and how to avoid the pitfalls.  Only negative attitudes towards the poor hold us back. So it’s time to take action: cash transfers are a hand up, not a hand out.

Rachel Slater, Head of Programme, Social Protection, Overseas Development Institute

What Secure Livelihoods & Bollywood Movies Have in Common...

In late December 2012, as the global spotlight focused on the horrendous New Delhi bus gang rape, an old, yet overlooked issue re-emerged on the global agenda: safe, reliable public transport for working women.  In the face of one woman’s tragedy, the daily reality of 40 million urban working women in South Asia was unveiled:  secure access to the workplace remains fragile and threatened for women even in the most modern of cities in the emerging world.   

  

For over 2 million female commuters in Karachi, physical, sexual and psychological harassment on public transport is an ordeal that accompanies them to work every day. As an example, let’s take Saira, a 20 year old maid from Punjab who migrated south to Karachi and now commutes daily from an urban slum to the affluent neighborhood of DHA. Saira toils the entire day in a large bungalow for a meagre cash wage of just over $3 a day.  She then has to endure a 1-and-1/2 hour to 2 hour commute home on a public ‘mini-bus’ during which she is propositioned to, leered at and often groped at or pinched (to get a sense of the bus Saira travels on watch this video). 

Saira’s in-laws are extremely unhappy at the late hours she returns home and she has often thought of quitting her job out of sheer frustration. However, this is not an economic possibility for her as her husband is unemployed and she has a 2-year old daughter and 2 elderly parents-in-law to support. Taking an auto-rickshaw to and from work at $2/ride is also not a viable alternative for her.There are tens of millions of women like Saira in South Asia who are battling against a predatory society as well as their own families to maintain the freedom and right to a safe, secure livelihood and their economic independence; their undignified commute makes it especially challenging to fight this uphill battle. Meanwhile, there are tens of millions of other women who have simply given up and prefer (or are forced) to stay at home rather than cope with the physical and psychological harassment they encounter on their daily commute to work.Now imagine for a moment that there was a magic bus especially for women (let’s call it Busanti after the famously feisty, yet utterly confident Bollywood heroine from the 70’s smash hit ‘Sholay’).

Imagine that Busanti was not just a public transporter exclusively for working women but also an ‘empowerment ecosystem’ that provided working women with access to financial services and financial capability, legal advice (via a paralegal mobile helpline), women’s health education (via interactive videos delivered on the bus) and quality, affordable healthcare (via a health insurance plan designed for low-income, informal workers and workers in corporate value chains). While all of this sounds as real as a 70’s Bollywood flashback (in other words a utopian dream), a pilot convergence of five ‘emerging market’ forces: safe and reliable access to the workplace, financial inclusion, quality healthcare, employable education and clean energy is being tested on the ground in Karachi as we speak (or write/blog):Bushanti: Making the daily commute safer and 'healthier' for working women in Pakistan 

Watch this space for the results…

Asher Hasan
Chief Executive Officer
Naya Jeevan
Pakistan

Improving livelihoods in China: The challenges

For 30 years, China has made great strides in improving people’s livelihoods. In just three decades absolute poverty in China has fallen from 31% to 1.6% - the largest poverty reduction movement in the world. 

China’s strong economic performance has driven this fall, which helped its people improve their livelihoods through income growth. From 1979 to 2012, disposable incomes rose annually by 7.4% or more across China in real terms.

The Chinese government has also expended great effort to enhance its people’s livelihoods. To secure these in both rural and urban settings in recent decades, it has set up social protection systems. This is in addition to its special poverty alleviation programmes. Basic pension systems, health care and guarantees for minimum living standards are now covered for both urban and rural residents, as well.

Despite this progress, for additional livelihood improvements, China faces several challenges.

The first challenge involves maintaining the momentum. As a middle income country, China needs to keep up the economic growth pace to keep improving people’s livelihoods. China’s recent rapid economic growth, which fueled individual income growth and livelihood improvements, was exceptional. 

It is widely accepted that China’s potential growth rates are likely to decline in the coming years. This decline is logical. China’s comparative advantage as a low-cost manufacturing country is falling as its labour costs rise on skill shortages and rising unskilled labour wages. 

As a result, labour intensive industries, which fueled China’s economic growth, will reduce China’s comparative advantage because the productivity of its labour-intensive industry lags labor cost growth. To sustain economic growth, China must transform its growth pattern from one driven by production to one driven by productivity improvement. But this is difficult and uncertain. 

The second challenge comes from an ageing population. China’s strict population growth policy and robust economic development meant that its then-large working age population found employment quite quickly when economic growth accelerated.  But those advantages are petering out as China’s population ages. China is already an ageing society. In 2013 persons aged 64 made up nearly 10% of its population. 

In an ageing society with fewer dependents to support them or pay into pension schemes, China must rethink its livelihoods approach. When a country’s working age citizens make up a very large share of its population, leveraging the labour market and increasing employment as much as possible is a wise strategy to improve livelihoods. Encouraging the development of labour-intensive industries and eroding institutional barriers to labour mobility can also improve livelihoods in this context. But China’s ‘age bulge’ means it will have to look beyond growing employment, to broadening and strengthening its social safety net.

Finally, despite China’s progress in establishing social safety nets, integrating the social protection system into society is a challenge.  For instance, though China’s basic pension programmes and medical care system cover most rural residents, the resources and benefits of these programmes and systems vary widely between rural and urban areas. There is still a long way to go to bridge the gap in benefits between rural and urban areas to improve the livelihoods of rural residents. Gaps also persist for those who live in cities and the countryside in the provision of public services that are essentials to livelihoods improvement, such as access to education and the quality of schooling. These might affect not just one individual’s long-term livelihood, but perhaps those of the next generation, as well.  

It is a crunch time for China to address these challenges, and government leaders know this. At its third Plenum, or government assembly, last year, the government called for comprehensive reforms in many areas including economic and social areas.

The direction is quite clear. To sustain economic growth and generate more resources to improve livelihoods, China must have a more productive economic system. 

Click here to post your comments and insights on this topic to help inform our discussions August 4-8.

Du Yang
Professor
Institute of Population and Labour Economics, Chinese Academy of Sciences
China

Reshaping livelihood opportunities for marginalised populations

Around the world, ambitious, creative thinkers and doers are expanding the livelihood opportunities for populations that had been marginalised from the economic opportunities around them.  Mobile technologies are giving smallholder farmers and fishermen real-time access to critical market information.  New forms of self-organisation are empowering more stable livelihoods through cooperative insurance, as well as credit and savings programs for millions of informal workers.  These self-employed workers are the heart of many local markets in the cities of the developing world. 

Not only is technology changing the types of jobs around the globe, but it is also changing how people connect to jobs and to work. For example, mobile technology is spurring demand for mobile app developers; 3D printing is shaking up manufacturing and the maker movement; and broadband connectivity is making digital work possible in remote locations. But while technology-induced job churn is nothing new, the current wave is creating new kinds of markets for work and new ways to connect. Uber, TaskRabbit and ODesk are facilitating new kinds of work relationships, and platforms such as Airbnb, Spinlister and Zipcar, are facilitating the sharing economy.      

But all of this innovation and creativity may not be sufficient to address the daunting challenges facing poor and vulnerable populations as they struggle to secure their livelihoods.   In Africa and Asia, societies are experiencing a dramatic increase in numbers of young people - the “youth bulge.”  Developing world economies are not creating employment opportunities fast enough to accommodate this new generation.   Developed economies, on the other hand, are experiencing a demographic bulge at the other end of the life cycle, with retirees exiting the workforce and relying on various forms of government and societal support.  The ‘Great Recession’ has also left millions facing long-term unemployment that permanently disrupts careers, stifles skill development and robs society of the contributions of talented workers at the peak of their productivity.

This August, the Rockefeller Foundation, in partnership with the Organization for Economic Cooperation and Development and the Economist Intelligence Unit, will convene thought leaders from corporations, government, universities and civil society.  They will envision new strategies for securing the livelihoods of the world’s poor and vulnerable populations in the face of daunting challenges and remarkable opportunities being unleashed by economic, social, environmental and technological change.

Among the issues to be debated are:

  • The important role of employers and employer practices in reshaping livelihood opportunities for marginalised populations.
  • How demographics, both ageing in developed markets and the youth bulge in developing countries, are changing the shape of the challenge and the mix of resources and talents for securing livelihoods.
  • The unpredictability of how technology will change livelihoods in coming decades.  Analysts point to both possibilities: that tech will destroy jobs but also open new fields.  We need to design livelihood support systems that can adapt quickly given the uncertain trajectory.

The insights and action of the global public will be essential to tackle the problem, to come up with a broad range of realistic and sustainable alternatives to the way we work and live.
 
We invite you to share your comments and insights here to help inform our discussions in August.

Robert Garris
Managing Director
The Rockefeller Foundation

John Irons
Managing Director
The Rockefeller Foundation