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2017 Chicago Forum Workshop

Technology and Inclusive Growth

Some of the world's most prominent thinkers in the technology industry--including tech experts, community organizers, researchers, philanthropists, and urban planners--gathered to ask what global cities must do to integrate technology while building sustainable economies and inclusive workforces for the future. Three priorities emerged through these leaders' conversations that warrant further exploration at all levels:

For cities worldwide, a primary challenge will be to create sustainable jobs and inclusive opportunities for all citizens, while also mitigating the effects in employment sectors that are particularly vulnerable to technological disruption. Citizens feel disillusioned if they suspect that equal opportunity does not actually exist, worsening social ills. While technology is often a sign of progress, it also illuminates the inequalities that result from the reorganization of labor markets, economies, and society.

 

To examine how to integrate technology to build inclusive societies, a group of leaders—including tech experts, community organizers, researchers, philanthropists, and urban planners—came together in a private workshop at the 2017 Chicago Forum on Global Cities. The following is the problem statement around which the workshop was framed and a summary of the highlights of their discussion—including the challenges that remain top of mind for the world’s leading experts on this issue.

Problem statement

 

The job market is being rapidly transformed by a technological revolution generating new applications for artificial intelligence and other computer-assisted capabilities. The challenge for global cities is to create sustainable inclusive growth—both for today’s workforce and for a future where workforce needs are likely to be very different. 

 

Ensuring the future job market does not worsen socioeconomic divisions will require the engagement of a broad range of stakeholders. City-to-city efforts to prepare for a reshaped workplace might include testing alternative models such as universal basic income proposals, entrepreneurship, and neighborhood-focused investment. How does this play out in the global city?
REUTERS/Erik De Castro

Discussion highlights

 

The artificial intelligence and computer-assisted technological revolution is different from previous eras of labor-market restructuring, requiring new responses to manage the impact of increasing economic inequality. If swathes of the population are unable to find long-term job security, it unmoors the identity many derive from their occupations and darkens their outlook on future prosperity and that of their children. So what should the public sector be doing to combat the negative effects of progress?

 

Understand that inequality is borderless. Inequality is surmountable, but it requires collaboration on a global scale. Consider that the highly skilled innovation workforce tends to cluster in hubs: software engineers flock to San Francisco, for example, while investment bankers head to London. Demand for high-skilled employment is outpacing that for low-skilled occupations, and high-skilled positions are now more concentrated in specific cities that attract talented workforces. This produces certain cities that are flourishing, while many formerly large cities, many of which specialized in industrial or manufacturing sectors, are facing a potentially irreparable decline.

 

Indeed, the largest gaps of income and wealth inequality can be found in the world’s leading global cities. Manufacturing is returning to major cities to benefit from business clusters and high-end infrastructure such as broadband internet and machine-to-machine connectivity (the Internet of Things). Much of this growth is also highly stratified within major cities, concentrating near universities, downtowns, or trendy neighborhoods, which in turn contributes to the visible signs of inequality.

 

Thus, inequality must be addressed on an international level. Tax rates change at national borders, contributing to flight of capital and subsequent job dislocation. A candid discussion is needed on how taxation (local, regional, national, or corporate) relates to growth and social stability. Cities could also consider using a universal basic income (UBI) as a solution to tackle the reorganization of labor markets, as it can provide welfare and equality of opportunity to all citizens.

For further discussion:

  • How can infrastructure be used to create equally distributed technology hubs within cities?

  • What are some historically successful models of tax incentives to redistribute wealth in global cities?

  • How would a UBI incentivize, or deter, citizens to participate in the labor market? And how would a fair income amount be decided upon?

REUTERS/David Mercado

Invest in and retool education. There is concern that many low-skilled occupations will entirely disappear and not be offset by sustained growth in new sectors. Worsening population woes, the education system itself is often ineffective at tackling inequality, as it lacks resources to solve problems that go far beyond the classroom.

 

The education system must be overhauled to create more flexibility, and leaders need to not only understand but champion that this investment is worthwhile, even if the payoff is decades in the future. Cities should provide constructive learning environments inside and outside schools. They should fully fund early-childhood education to create a baseline for equal opportunity. They should identify what to teach to reflect future workforce needs. And they need to concentrate on bringing proven innovative components of education into the system from the outside.

 

In addition, as young people increasingly look for meaningful careers, they should be incentivized through innovative compensation packages to pursue work that attempts to solve the world’s most intractable problems. Careers in energy efficiency, food sciences, waste management, and technology, for example, are not only likely to be in demand for decades to come but will also benefit society as a whole.

For further discussion:

  • What would an equal opportunity–based childhood education system look like?

  • What actions can cities take now to identify job-insecure populations and move them toward job security?

  • How can global cities help incentivize youth to pursue careers solving the world’s most intractable challenges?

Use technology to address inequality. Technology is not just a vehicle for job creation, it can also create applications that reduce social ills. While the private sector can help—social-impact investing has become stronger because high-skilled labor and capital markets are demanding accountability from private companies—the private and public sectors are in fact codependent. Despite being the traditional apparatus of wealth redistribution and opportunity provision through education, the public sector is constrained, underfunded, and unable to adapt quickly to these technological shifts. In short, in most cases the public sector has not been equipped to address inequality comprehensively or effectively. For this reason, investment in the public sector must evolve to enable the sector to become more efficient—or risk continuing to hinder growth.

 

Cities can pursue inclusive growth by investing in technology that benefits society. For example, they can use capital- and crowd-sourcing applications to attract investment from outside the most successful cities. Data can be used to develop solutions to intractable problems in urban contexts. Mobile phones can be harnessed to reach all populations, including students for education and training.

For further discussion:

  • What are some immediate action steps that could make the public (and private) sectors more efficient in order to deal with large-scale economic growth?

  • Where are the cities that lead in using technology for social impact? What lessons can be learned?

 

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Positive technological growth and development requires attention to evolving workforces as well as wealth distribution among global populations. However, by making inclusive growth a priority, international leaders can move into the future with a strong framework for managing technological innovation.

 

What is your city doing to support technology and inclusive growth? Join the conversation @ChicagoForum.

The 2017 Chicago Forum on Global Cities was made possible by the following forward-thinking companies: AbbVie, UL, Grant Thornton, Hyatt Hotels Foundation, Motorola Solutions, United Airlines, and USG Corporation.


Save the date, June 6-8, for the 2018 Chicago Forum on Global Cities. Learn more at chicagoforum.org.


Workshop notes drafted by Alexander Hitch, Research Associate, Chicago Council on Global Affairs.