Making the Fourth Industrial Revolution count for Sustainable Development in Asia and the Pacific

This is a region in the throes of a digital transformation.

In Asia, automation, artificial intelligence (AI) and the innovations of the Fourth Industrial Revolution are penetrating everything from automotive, garment and electronics manufacturing to business processes, logistics and healthcare. The benefits, in terms of efficiency, productivity, speed and agility, are undoubted.

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These innovations could make products safer, increase industrial productivity, shorten global supply chains and make public services more personalised, predictive, and participatory, as citizens both provide and benefit from increasing data flows around public services.

However, as with all technological change, their impact will be shaped by choices and the ends to which they are put.

Just like nuclear fission could create civilian energy or military weapons, these innovations could have a wide range of applications and impacts — both positive and negative.

UNDP partnered with the Economist Intelligence Unit (EIU) to review the likely implications of this technological revolution for continued progress in a region that has lifted nearly a billion people out of poverty in the past three decades.

The resulting analysis identifies the ways that new technologies might be harnessed to advance rather than hinder sustainable development.

Unemployment is the most commonly discussed threat.

Labour organisations, governments and economists are concerned that human workers are vulnerable to replacement at an unprecedented scale and speed, which could worsen inequality, undermine social cohesion, and increase poverty.

Over 60% of salaried workers in Indonesia, the Philippines, Thailand and Vietnam occupy positions at high risk of automation.

Machine learning (ML) and automation, through which physical and digital robots acquire abilities once considered uniquely human — like strategic thought, self-corrective learning and context-responsiveness — could replace many lower- and middle-class jobs that have been engines of social mobility in times past.

Countries must adapt or be left behind if they are to achieve the Sustainable Development Goals.

Progress on at least nine Sustainable Development Goals could be directly affected by the Fourth Industrial Revolution, and millions in Asia’s emergent middle class could slide back into poverty.

The relegation of medium-skilled, waged workers into unemployment and/or informal employment would push a large cohort of Asia’s population back into poverty, while the lowest-skilled workers — and the poorest countries, yet to enter the manufacturing and services value chain — would lose access to a development model that had hitherto substantially driven poverty reduction in Asia.

Job losses from automation will not always be evenly distributed — evidence suggests that men tend to gain one job for every three jobs lost to technological advances, while women gain one job for every five jobs lost.

This impact is worrying in its own right but also highlights a gender dimension, since some at-risk sectors such as garment manufacturing and business process outsourcing (BPO) are dominated by women, while increasing financial returns to STEM (science, technology, engineering and mathematics) education overwhelmingly flow to men. Women are also less able to take advantage of new opportunities in today’s digital era, since they generally have less access to the Internet than men in most developing economies

The Fourth Industrial Revolution is also converging with other mega-trends, including rapid demographic transition and growing consequences of climate change. This convergence is pushing countries to fundamentally reconsider and adapt existing arrangements between governments and citizens. This includes assessing the suitability of current approaches to, among other things, democratic governance, the definition of work, privacy, basic citizen rights, and the obligations of the state to its people.

Technological destiny?

Technologies do not always have pre-determined outcomes for societies. Policy choices, social dialogue and public opinion all shape the ends to which technology is deployed.

Governments have an opportunity to pro-actively embrace this moment and the call for transformative change. Reactive policies and institutions will be increasingly ill-suited to manage the impact of technological innovation or to capture its potential to help strengthen approaches to sustainable development. In the coming era, those governments more likely to accelerate progress towards the SDGs will be those that actively design policies and institutions that are more predictive, adaptable, and responsive to citizen needs.

Designing new social and economic approaches is daunting and will not happen overnight.

This report points to several key policy areas where governments can begin assessing and adapting their current approaches, institutions, and policies for the coming era. Building on the report’s analysis, UNDP has specifically identified five critical themes that can help form the basis for transformation:

1) Embrace predictive and adaptive decision-making;

2) Capture emerging sources of growth and employment;

3) Reimagine citizen engagement and personalised service delivery;

4) Enhance protection to leave no one behind;

5) Mobilise and allocate finance for a better future.

These represent critical domains where governments — together with civil society, the private sector, and development partners — can evaluate current approaches, consider future scenarios, and create and test new systems and models. This does not represent a comprehensive set of recommendations covering all the ways technology is likely to affect societies.

The Asia-Pacific region is diverse and the Fourth Industrial Revolution will affect countries in different ways. But this report and the accompanying UNDP policy recommendations highlight critical areas where action now can boost a country’s ability to capitalise on opportunities arising from the inevitable technological change underway.

It is up to each government to develop solutions appropriate to their own economic and social context. This report and recommendations aim to support this process, principally by identifying themes for further analysis and by guiding policy and institutional design that can help societies embrace the opportunities afforded by technological change and manage the possible negative consequences of it.

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UNDP in Asia and the Pacific

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Working for a Sustainable Planet without Poverty

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