The Fourth Industrial Revolution is redefining the economy as we know it
The Fourth Industrial Revolution (4IR) upends current economic frameworks. Who makes money – and how – has changed. Demographics have changed. Even the skills that brought our society to where we are today have changed. Leaders must account for these transformations or risk leaving behind their companies, their customers and their constituents.
The top three economic frameworks in most urgent need of a 4IR overhaul include income generation, labour force participation and gross domestic product (GDP) measures. Let’s unpack these concepts one at a time and redefine what they mean as we advance bravely into the Fourth Industrial Revolution.
Wealth divisions and rates of middle-class growth differ from region to region. More advanced economies such as Europe and Japan see their middle-class markets growing by 0.5% each year. Rising economies, namely China and India, are expanding their middle classes at 6% each year. Perhaps most striking, however, will be the maturity of Asia’s middle class, which will soon constitute 88% of the world’s entire middle class.
A host of factors contribute to the rise of the gig economy, including increased globalization, advancements in technology and static educational and institutional inertia that can’t keep pace with changing workforce demands.
We cannot deny the role technology will play in the future of work. Indeed, the future of work is technology. However, no conversation would be complete without addressing how technology and the future of work affect half of the world’s population: women.
As we examine how the Fourth Industrial Revolution will transform the global economy, it’s important to consider how we measure its success. We currently rely on GDP as an indicator of economic growth. GDP calculates a country’s production of physical goods, and policymakers use it to inform decision-making.
Instead of GDP, we should measure the health of our economy by what MIT calls GDP-B, where B estimates the benefits we obtain from digital goods and services. Analysts can calculate the value of B by determining how much money people are willing to pay to use zero-price digital services (such as Wikipedia, Instagram or Google Maps).
Finally, we must apply the gender lens to all decision-making going forward – and not only because it’s the right thing to do. Gender equity is a $12 trillion global economic opportunity. So when we collect data, let’s gender-disaggregate it. And when we train and re-skill workers, let’s ensure women and girls aren’t being left behind.
This content was originally published here.