On July 5, 2019, Peter Vanham, lead writer at the World Economic Forum (WEF), spoke at a private expert roundtable on the topic of “Policy Solutions for ‘Globalisation 4.0’”.
Mr. Vanham began by outlining the nature of the Fourth Industrial Revolution (4IR), an area in which both China and the United States (US) are competing for leadership. He argued that each previous industrial revolution had resulted in a new wave of globalisation, hence why many believed the 4IR will lead to what is sometimes called “Globalisation 4.0.”
However, Globalisation 4.0 has come along with a number of problems, not least a slowdown in global growth, lower productivity, and an ageing population. The market power of major companies has become more concentrated in markets like the US, while income disparities are also growing in many countries. Finite natural resources are being depleted at an unsustainable rate, causing pollution and harming well-being.
There are many drivers of Globalization 4.0, from automation and artificial intelligence (AI) to economic systems that generate higher returns on capital than labour. Solutions to the problems this new wave of globalisation creates are likely to require the involvement of a wide variety of stakeholders.
Towards the end of his presentation, Mr. Vanham left a number of questions for discussion, including: (1) which economic development model is the most promising in the era of Globalization 4.0; and (2) which are the most interesting economic, social, and environmental policies to highlight from Singapore and Southeast Asia.
Elsewhere during the discussion, a number of points were made:
- Smaller states such as Switzerland and Singapore have tended to be better at adapting to Globalization 4.0 and the 4IR. These countries have been better able to manage the introduction of automation in industries, while also re-training workers to ensure that they stay relevant to the job demands in the new era.
- Asian growth has been propelled over recent decades by manufacturing and foreign direct investment. Whether such a model of growth can continue into the next few decades is less clear. Various problems may make this model difficult to sustain, such as a rapidly ageing population and decline in the growth of global trade.
- In Singapore, there have been a mixture of pragmatic responses in order to address the shocks brought forth by the 4IR and Globalization 4.0, including reskilling schemes such as SkillsFuture.
- There is no age limit for SkillsFuture eligibility; Singapore’s government thought there should not be an “expiry date” on the ability to learn and reskill. Even seemingly marginal skills, like driving or flower arranging, could provide a secondary income, and were included.
- Singapore’s Economic Development Board (EDB) helps to attract investments from larger firms seeking to expand in Singapore. But Singapore’s economic model is weaker in some areas, including social safety nets, where for instance, there are few unemployment benefits to cope with economic dislocation.
- Singapore also faces problems convincing businesses to give older workers a chance without subsidising salaries. In 2015, Singapore faced the highest “retrenchment” or rate of new unemployment since 2008. Many older workers tried to reskill, yet still failed to find employment due to other factors like a lack of experience.
- Education institutions are trying to introduce more life-long learning opportunities, and trying to collaborate with corporates in introducing new courses. NUS now symbolically enrolls its students for decades. One risk is this might turn universities into “super-polytechnics”.
- Workers may also need to undergo multiple cycles of retraining, yet as each cycle becomes shorter, it raises questions about how effective the earlier retraining had been.
- Many business owners find importing cheaper labor through migration to be easier than retraining or developing the local workforce. This problem is exacerbated by the fact that Singapore is an ageing society.
- Some major multinationals find it easier to layoff tens of thousands of workers and then hire tens of thousands of new workers, rather than re-training their existing workforces — a process which tends to be biased against older employees.
- Elsewhere, Singapore is working on introducing “smart regulations”, which try both to encourage innovation as well as mitigate risks for citizens. It was also pointed out that in the future, as the gulf between the governments and their people continue to narrow, many categories of jobs may no longer be relevant. For instance, as government services (such as tax) migrate online, intermediary skilled professions (like tax return preparation) may no longer be needed.
- Ultimately, political factors remain central to responding to the pressures of “Globalisation 4.0”. Political fragmentation is a problem in many parts of the world. Issues like automation, climate change and migration are highly political in nature, and thus cannot simply be solved with managerial or technocratic answers. The same is true with communication, given a plausible future in which the internet could splinter regionally, in part because of the intensifying of technological war between China and the US.
- Any agenda to solve issues relating to “Globalisation 4.0” will require a wide range of policy responses, spanning areas such as plastics recycling and regulation of genetic technologies to areas like super-computing and agricultural innovation.
List of Attendees:
- Manu Bhaskaran, Director, Centennial Group
- Ricardo Borges de Castro, Adviser, European Political Strategy Centre
- Juliana Chan, CEO, Wildtype Media Group
- James Crabtree, Associate Professor in Practice, LKYSPP
- Genevieve Ding, Deputy Director, Ministry of National Development
- Lee Chor Pharn, Principal Strategist, Centre for Strategic Futures
- Aaron Maniam, Senior Principal Researcher, Civil Service College
- Daniel Moss, Columnist, Bloomberg
- Terence Poon, Associate Director, Futures Office at NUS
- David Skilling, Director, Landfall Strategy Group
- Peter Vanham, Lead Writer and US Media Lead, World Economic Forum
- Xu Shengwei, Research Assistant, LKYSPP