The impact of automation and globalisation on jobs and communities has dominated headlines across the developed world in recent years. There has been the political backlash from places (like the US “rust belt”) where many people feel left behind by the economic changes of the last few decades. And there is the widespread fear that the next waves of automation (like A.I.) and globalisation (like the economic strength of China) could leave behind a whole range of other people and places.
In the big picture, automation and globalisation are forces of good in the world, making countries richer and improving the overall quality of life. They bring what economists call “creative destruction”, that both destroys old ways of doing things and creates the new ways. However, many people get trapped in painful and prolonged transitions, when the destruction of their jobs and ways of life happens more quickly than the creation of new and better opportunities. This is particularly tough when the place where they live and work struggles to adjust and falls behind the leaders in the global race. It leads to unequal opportunities for people in different places. Magnet cities are attracting the world’s top talent, R&D, trade and investment. Many other places fall into the middle-income trap, of being uncompetitive on cost with the developing world and uncompetitive on skills and innovation with the magnet cities.Read More