SINGAPORE (July 1): Growth is decelerating in Europe, the US, China, Japan and other leading economies, as the International Monetary Fund and World Bank recently highlighted by revising their global forecasts for this year substantially downward. At the same time, political and business leaders know they need to do more to prepare workforces for the labour market in an age of rising automation, stagnant wages and greater part-time, temporary and contingent employment.
These two challenges — reinvigorating economic growth and preparing people for the future of work — are linked, but not necessarily in the conventional sense that macroeconomic stimulus or improved efficiency constitutes the best way to create job opportunities and raise living standards. The experience of recent decades shows that growth alone is not enough to reduce the increased inequality and insecurity accompanying the transformation of work. Moreover, high debt levels and historically low interest rates have left policymakers with fewer traditional tools to stimulate the economy in the event of another recession.
In this new era, government and business leaders need to view the relationship between growth and labour markets the other way around. It is by upgrading their social contracts and better equipping their citizens to navigate the world of work that countries can most effectively boost their economic growth and development.