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Technology to give a fillip to productivity in developed countries: StanChart
TECHNOLOGY should provide a kick to weak productivity growth in developed markets, while fears of large job losses due to the process of automation appear exaggerated, a fresh report from Standard Chartered said on Monday.
"Fear of high unemployment caused by technology is misplaced, though repetitive cognitive and manual jobs will continue to be replaced by machines," the report said.
"Experts who rely only on knowledge, experience and logical thinking may find their roles in jeopardy. Human skills such as problem-solving, interactive communication and situational adaptability, as well as the ability to work well with AI (artificial intelligence), will be most important."
Still, this comes as growth in developed countries' productivity - which is linked to output, and labour - has been on a declining trend since the financial crisis. The drag comes mainly from Europe, with the US ahead of the pack. Europe, Japan and Singapore narrowed the productivity gap with the US from the 1950s to 1990s, but have lost some steam since then.
"Europe urgently needs higher productivity growth to make debt burdens sustainable. Some of the recent weakness is cyclical. But some is likely structural and related to weak take-up of new technologies," the report said.
European countries - with the exception of the UK - tend to invest far less in information and communications technology (ICT) capital than the US, due to excessive regulation, tax policy, limited economies of scale, and "possibly less effective management styles than in the US".
Among developed economies, Singapore and Korea stand out for lifting their investment - as a proportion of GDP - well ahead of the level seen during the crisis. "Since the crisis US investment has risen, but remains below pre-crisis levels while European investment has been very sluggish."
As it is, Singapore and Sweden are the top two countries on the overall Networked Readiness Index - a measurement by the World Economic Forum for ICT issues such as overall innovation environment, and readiness to adopt.