Economic Themes (2020) 58 (4) 1, 431-457


Milojko Arsić

Abstract:  Since the industrial revolution, technological innovations have enabled rise in productivity, employment, standard of living and the tota l population several times. In the last 15 years productivity growth ha s slowed-down in the most of large economies, probably due to slo w diffusion of advanced IT solutions, but also due to inadequate statistica l measurement of the value of IT services and slow progress i n complementary and other technologies. The acceleration of productivit y growth in the future is possible to foster through larger public investmen t in infrastructure and fundamental re search, tax incentives and subsidie s attached to innovations in the private sector, as well as through promotio n of entrepreneurship and the reform of education system. The developmen t and diffusion of digitalisation and other technologies is expected to trigge r a slight acceleration in productivity, while explosive growth i n productivity, as predicted by some th eoreticians, is not likely to happen. The net effect of digitalisation on em ployment will be probably negative, but it is uncertain how much will be offset by a rise in availability of good s and services and creation of new types of goods and services. Employmen t will depend on the speed of adjustment of education system t o technological changes and labour market requirements, as well as on the possibilities for vocational education and change in qualifications. A n important reserve, which may reduce a drop in employment and enhanc e the welfare of citizens, lies in additional reduction of the working hours. I n the long run, it is expected that the world population growth is to slow- down and then become negative, which will lead to a decrease in the labour force. In that case, full employment will be attained even with th e decline in the number of jobs. In case of long-term massiv e unemployment, there is also an option for introduction of universal basi c income or other type of social benefits, in order to prevent a significan t rise in economic inequality.

Keywords:  digitalisation; productivity; employment; policy responses

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