New ILO research reveals the impact of digitization on developing economies

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Geneva (ILO News) – A new publication by the International Labor Organization (ILO) on the expansion of digital economic activity in developing economies examines what digitization means for the structural and productive transformation of countries around the world. Global South.

An article by Sarah Cook and Uma Rani titled Platform in Developing Economies: Can Digitization Drive Structural Change?It primarily focuses on jobs performed through digital labor platforms such as delivery couriers, drivers and caretakers, and work performed on web-based platforms, including professional services such as software programming.

The authors examine the impact of digitization and how it can contribute to inclusive and sustainable human development, drawing on the experience of workers in the Global South from the perspective of workers and working conditions.

For many, a central part of the solution to contemporary development challenges – whether to transition to a green and digital economy – lies in technology.

However, the main argument of this paper is that while digital technologies are changing the structure and conditions of work, there is little evidence that these changes can generate growth and change, even in low- and lower-middle-income economies. , how and under what circumstances.

Based on a body of existing research, evidence and debate, the document shows that workers in the informal sector have increasingly precarious jobs. Furthermore, as digitization advances, even well-educated and skilled workers face uncertain working conditions, both in terms of job content and the conditions under which they work. Moreover, these new opportunities do not contribute substantially to the local economy or facilitate a transformation of the productive structure.

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On the other hand, research also shows that the progress of digitalization in developing countries usually occurs against the backdrop of unfavorable conditions of state and institutional capacity, limited financial resources, excessive inequality and unemployment or underemployment, and global supply chain integration. and the growing financialization of economic activity.

In this context, the authors argue important questions about whether digitization can help developing countries achieve economic prosperity and growth, as developed countries have done through industrialization. Indeed, there is increasing evidence that growth trajectories are not primarily driven by technological change, but rather that other social, economic, and institutional forces are involved.

In their conclusion, the authors point out the key policy actions necessary to move the digital economic transformation towards sustainable, equitable and inclusive growth. These include business regulation, social security, trade unions and data transparency. They also consider opportunities to use digital technologies to address issues related to workers' rights, benefits, and access to the work environment, and call for further research to better understand these possibilities.

“Rethinking the relationship between skills, productivity and wages is essential to understanding how to use trained or skilled workers productively,” the study says, “to create a learning environment not only for the workers involved, but also for the adoption and diffusion of technologies to improve overall economic productivity.”

The authors of the paper are Uma Rani of the ILO and Sarah Cook of the Southern Center for Inequality Studies, University of the Witwatersrand, Johannesburg and Ningbo University of Nottingham, China.

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