The rise of job-killing technologies means governments around the world need to act now to prepare their economies, according to the boss of the International Monetary Fund (IMF).
In the IMF’s global policy agenda its managing director Christine Lagarde said governments must act preemptively to create a more flexible workforce.
She wrote: “They should anticipate the effects of technological progress and economic integration, equip their populations with tools to reap the benefits, and put in place domestic policies to share them more broadly.”
The rise of industrial automation has led to fears of a big increase in unemployment as lower-skilled jobs are increasingly performed by robots. One study by Oxford University academics estimates 47 per cent of jobs in the US could be susceptible to automation.
The slower economic growth following the financial crisis exposed groups vulnerable to technological change, but governments should counteract this trend by investing in improving education so workers can change career throughout their lives, the IMF said.
Lagarde reiterated the IMF’s opposition to protectionist policies, saying “Everyone would lose” if liberal global trade is undermined.
She said: “In a highly interconnected world, abandoning openness for protectionism, and multilateralism for do-it alone policies, would reverse the well-known gains from integration, hurt domestic consumers and producers, and could threaten world prosperity and stability.”
The number of protectionist policies implemented by governments actually decreased from 2015 to 2016, according to the World Trade Organization.
However, policymakers around the world have expressed alarm at a change in rhetoric across the developed world, symbolised by the promises made by US President Donald Trump.
Trump has promised to renegotiate trade deals, saying open trade has worked against American interests.
However, the IMF rejected that analysis. Lagarde said: “Trade and financial integration and technology lifted hundreds of millions out of poverty, boosted incomes, expanded access to goods and services, accelerated knowledge transfer, and provided new opportunities for investment.”