Labour markets are transforming as a consequence of technology and globalisation. 

In The Future of Work in the Developing World* academics, entrepreneurs and development experts offer insights about skills for the future and more. These are the takeaways from a fascinating couple of days I spent with these actors last year:

Where will the jobs come from?

At a time when half of all new jobs are being created in the gig economy in developed countries, future workers may increasingly be micro-entrepreneurs, freelancers or small business owners.

What skills will be needed and who should provide them?

While science, technology, engineering and mathematics skills are vital, so are design, creativity, finance and empathy skills. Private businesses can train people in these skills, and the higher wages they get after training justifies the cost.

What about labour market security?

Unemployment and disability insurance has evolved to reduce the risk for workers in the formal sector. They are less useful for the self-employed. Risk is an appropriate lens for much of the discussion on worker security, perhaps more so than a redistribution lens. A Lively discussion about universal basic incomes fit into this paradigm of risk versus redistribution.

These changes have huge implications for everyone interested in development. Labour market changes are poised to disrupt many aspects of societies. Mortgage rules will need to be rewritten. Part-time work, slack-time work and income from underutilised assets will become more important. Families will develop risk-sharing practices. Labour unions will need to avoid collusion when representing the interests of micro-entrepreneurs.

While advanced countries try to export the model of ‘decent’ work and high labour standards through formal labour markets to developing countries, the latter are busy exporting their experiences of managing informal labour markets to advanced countries.

Finding common ground between optimists who see promise in better functioning labour markets and pessimists who yearn for the stability of good jobs and a predictable career will not be easy.

*The Future of Work in the Developing World, edited by Laurence Chandy, is a Brookings Blum Roundtable 2016 Post-Conference Report. From August 3-5, 2016, nearly 50 prominent policymakers, development practitioners and leaders from industry and academia came together from the public, private and non-profit sectors for the 13th annual Brookings Blum Roundtable in Aspen, Colorado on the future of work in the developing world. PDF copies can be downloaded from brookings.edu/research/the-future-of-work-in-the-developing-world/

Homi Kharas

Senior Fellow and Co-Director, Global Economy and Development, at The Brookings Institution in Washington

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