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World Bank chief: Automation could usher in era of fragility, conflict and extremism

The president of the World Bank has warned that the rise of automation means the traditional path to economic growth may close to “all but a handful of developing countries”.

Delivering a keynote speech to Mobile World Congress on Monday, Jim Yong Kim said that if the technology industry fails to “step up its efforts in building a brighter future”, many countries will be beset by “fragility, conflict, violence, extremism and eventually migration”.

A study by the International Labour Organisation cited by Kim predicts that the spread of automation could destroy more than 80 per cent of the jobs in garment and textile manufacturing in some countries.

“If everyone’s aspiration are going up and technology is replacing cheap labour in developing countries, we’re going to have to answer some very difficult questions,” said Kim. “What on earth are people going to do? How will they support their families? How will they spend their time and even will they be more likely to be recruited by online extremist groups?”

The South Korean physician called on the annual gathering of technology executives to begin “with a tremendous sense of urgency” to rethink how connectivity, big data and new technologies can create new drivers of economic growth: “We will need to give people the chance to build the new skills needed in rapidly changing market – but beyond education, people will need access to capital and markets.”

Kim used his keynote to announce two new partnerships aimed at establishing a fresh approach to technology in the developing world. First, the World Bank, is partnering with mobile trade association GSMA’s Big Data for Social Good initiative.

“We’ve only just started to tap the potential for mobile data. Our ambition for our partnership is to harness mobile data to improve every one of our health, environment, energy, transportation and urban projects across the globe.”

Second, the World Bank is creating a new Internet of Things Big Data Initiative with operators convened by GSMA. Kim said: “Through this partnership, we’ll work with you to use IoT and other disruptive technologies to create markets and solve critical development problems. And to help you extend your reach, we’re willing to use all of our tools to de-risk investments, support governments as they reform their policies and create a better enabling environment.”

In his closing remarks, Kim warned: “I’m worried that the traditional path to economic growth – agriculture, then light manufacturing, then heavy industry – a path that my own country of birth South Korea followed, may be closing for all but a handful of developing countries.”