The world Economy – The third great wave.
The first two industrial revolutions were painful but beneficial to all, the digital revolution may be more divisive.
The third great wave of invention, the computer technology and ICT are expected to transform the world in more ways than the earlier revolutions.
ICT is driven by technologies in communications, internet and advanced robotics and has brought about automation of previously manual processes in production. It is yet to be seen whether the digital revolution will create more jobs than the jobs it will cause to be lost.
Technology is evolving, with devices becoming smaller, better and cheaper. Hand held devices and mobile technology has changed the way we think, live and play.
Manufacturing processes are controlled from instruments like microchips with the data condensed in small discs holding terabytes of data automating the mechanical processes.
Games, from chess to football are animated into devices and played on a digital platform.
Language training has become easier with teaching software and translation applications making the experience not only easy but also enjoyable.
Technology and productivity
While it is widely believed that the technology revolution would create job opportunities, the reality is that joblessness has become more severe in many countries, with the rich countries also affected.
With the technology revolution, there is no significant increase in real wages as observed in tha average annual real wages OF Britain, America and other rich nations.
Economic historians reckon that even in earlier revolutions, there was no recognizable increase in real wealth but an actual decline in productivity occurred.
The failure of new technology to boost productivity is the cause of many problems and is known as the Solow paradox; named after Robert Solow, the Nobel Prize-winning economist who wrote a book review for the New York Times. Techno-optimists from the Silicon Valley gave the second explanation for the Solow paradox as the tendency of new technology to increase productivity only after a long lay period.
The service sector, shows more promise that advancement in technology does improve productivity. In higher education, the use of technology in form of computers, online courses and digital learning has made learning cheaper with one Professor attending to many students in
The world Economy – the third great wave.
multiple locations, in effect, lowering down the cost of lecturers. In the health sector, technology has made the worker more productive, with use of modern techniques in diagnosis and treatment of diseases easier and less costly.
Robots are replacing workers in factories which have embraced new technological innovations in manufacturing. The robots are displacing multitudes of workers who were engaged under previous labor-intensive manufacturing processes. Only low-skill, low-productivity and low-wage service occupations have been spared.
Dematerialization of economic activity is another way through which new technology is altering the steps to development. More individual income is spent on health education and in communication than before.
Technology is changing the way we live and conduct our daily activities. We cannot downplay the impact of technology and the new technological advancement must be factored-in the way we think in order to improve our lives.
The Economist (2014, October) Special Report The world Economy. Pp 1-15.