A New Economy Brings New Challenges

The economy has changed dramatically in recent years as the financial crash delivered a major blow to companies and countries around the world. Economic recovery has been slow as businesses and workers wrestle with the challenge of new rules and a new landscape. But where do we go from here?

The problems

Even though a tentative economic recovery is underway the effects of technology and globalisation continue to cause deep difficulties for people and populations.

The internet and the smartphone are just two of the most common technologies that demonstrate how quickly and wholly the world is changing.

Globalisation too is accelerating levels of international trade in a way that puts pressure on the environment and the world’s finite natural resources.

The speed and depth of change is creating opportunities and challenges in equal measure, as the new economy causes greater division between those who can and can’t adapt.

The rewards of the new economy, however, are not shared equally as the incomes of the poor fall while incomes of the rich rise to worrisome heights.

People without the right skills are suffering disproportionately as wage levels stay low, competition increases and unskilled work disappears amid a dearth of demand.

Young people with little experience are particularly suffering as entry to the workforce is problematic given the short-time, part-time and temporary nature of many new economy jobs.

Like it or not technology, globalisation and the effects of the recession have brought us to a point where a two-tier economy, divided between the haves and have-nots, is a growing reality.

The question, of course, is what to do about it.

The solutions

One, we need to agree on what we want from the economy and whether or not growth is the sole priority and measure of success.

Few people argue that the economy needs to grow to sustain jobs and create wealth to pay for health, education and other essential services.

But a modest and sustainable approach to growth could be adopted for the long-term benefit of people, communities, and, not least, the planet.

Two, the benefits of the economy need to be more equally shared across all sections of society to ensure a greater level of greater fairness and trust.

The benefits include not only people’s direct incomes but also access to, and the ability to avail of, the opportunities presented by the new economy.

Three, we must ensure more people have the right skills, as skills are the currency of the digital economy without which people will struggle to survive.

Without the right skills fewer people will get jobs and a two-tier system that unfairly and disproportionally rewards the rich and punishes the poor will follow.

SO, the recession is over and the new economy brings new challenges but with a different approach we can build a better and more inclusive society.