Is new technology “transformative” or “disruptive”? I’ve heard this topic hotly debated at meetings both within the World Bank and more broadly. The issue is not just linguistic hair-splitting. Technology optimists prefer the first term and see new technologies, digitization in particular, as an opportunity for low-income developing countries to leapfrog into the 21st century. Moonshot Africa, an ambitious World Bank initiative to connect individuals, firms, and governments in Africa to fast internet is inspired by this vision. Technology pessimists on the other hand emphasize the disruptive effects digital technologies are expected to have on labor markets. Concerns about robots and algorithms replacing human labor increasingly dominate the public debate not only in advanced economies, but also in emerging and developing economies. Against this background, it is natural to ask how these two views are compatible. To be more specific: How will Moonshot Africa create jobs on a continent where job creation is needed more than anywhere else in the world with Africa’s working-age population projected to rise by 70% in the next twenty years?
Imagine you were working in development and poverty reduction in the early 1990s (I was!). Only one website existed in all the world in August 1991 (today there are over 1.5 billion). Mobile phones were expensive, rare, and clunky. Very few would anticipate a situation in which India would have more mobile phones than toilets.
To paraphrase Bill Gates: we tend to overestimate the changes that will happen in the short term and underestimate those in the long term.