High-tech and the widening rich-poor gap

The global economy faced the tumultuous recession, sluggish capital markets and dead-slow recovery during the last few years that changed the economic and social scenarios in developed and developing economies alike. In trying to ride out the difficulties, business communities and the industrialists are adopting most advanced technologies in the fields of production, marketing and distribution. There are successes achieved by the stakeholders in increasing their net worth at national and international levels. This picture is one-side of the coin. The sleazy picture on the other side is the inequality of income and the ever-increasing gap between the rich and the poor. It shouldn't be a surprise that the economic super-powers like the USA have recorded sharp rise in poverty. Report of the Census Bureau says 46 million Americans-15 per cent of the population -- were living below the poverty line although the Americans have been using most of the advanced and sophisticated high-tech industries and businesses. World economy had a torrid 2015 in term of inequality of income between the poorest and the richest.
There's a tiptoeing shock on the economic horizon that dribbles in further and further in recent times. Everywhere we face the question of what technology holds in store, what technology is being used in production, whether a robot is performing surgery replacing humans.  The question is, what will the economy look like once these start happening? For years, economists and tech pundits have been saying that robot automation will aggravate current income inequality issues and swell them exponentially and now, even major financial institutions and banks are saying so.
A recent report of a renowned bank warns that while there are tons of thrilling investment opportunities in areas like clean technology, renewable energy and online services, there's just one big problem: technological unemployment and robot automation is going to kill jobs and when they do, the lost wealth will end up in the hands of the already-powerful tycoons widening the gap between the rich and the poor. When a job is replaced by a robot, all of the wages go into the robot-owner's pocket, instead of back out into the world of consumer goods where the worker takes his cheque. If that kind of centralisation of power and wealth takes place, many people will be left with self-defensive empires instead of a competitive ecosystem and a balanced society.
A common economic repercussion of high-technology is that it creates a converse relationship between productivity and employment. Technology has successfully managed to increase economic growth for nations by raising productivity, efficiency and output levels, inconsistently at the cost of fettering employment opportunities within specific sectors. In turn, GDP (gross domestic product) would uplift due to the evolution of technology whilst average income and employment figures may indeed shrivel at the same time, breeding greater inequality between the fortune makers and unfortunate takers. It can be prudently said that high-tech is likely to drag on the gap between the richest and the poorest as wealthier individuals and nations will be presented with more prospects, that is more wealth, more net worth and more prosperity compared to those with the tiny salary and low wages.
 A technological trauma will indeed deplete demand for low skilled workers, but it is likely that such workers will be able to re-train and find employment elsewhere. This depends on the flexibility of the labour force in regards to changes in technology. If a labour market is highly adaptable and responsive to technological changes, then employment levels are not likely to be reduced. Today, computing skills are applied to various sectors including healthcare, education and financial services where employment possibilities continuously arise.
 It is widely indicated that low-skilled workers are the most affected by high-tech progressions and growths, as robots and computing advancements regularly substitute workers undertaking repetitive tasks. Unemployment is on the upswing within sectors that are mainly based around administration and service works. However, at the same time employment opportunities are on the surge for labour whose skills are complementary to new technology, for instance, workers skilled and educated in IT and engineering related disciplines. In terms of employment, technology is benefiting those with greater analytical, problem-solving and creative skills at the cost of the extremely poor who can't afford to get educated in advanced IT and engineering.
Technological gains do create structural and regional unemployment, but the impact this has on the overall long-term employment is not as significant. Total employment levels may not decline as the increase in employment opportunities offsets the fall in demand for low-skilled labour, but changing the number employed in certain sectors and occupations.
Economists and social scientists raised their strong voices of concern on the aggression of technology in the densely populated countries with huge unskilled and illiterate workers. The gap between the rich and the poor in the densely populated countries in South-Asian countries has been expanding year after year and appears to be never-ending. The so-called tax rationalisation policy, welfare policy, etc. failed to bring any remarkable change in the lives of billions of people of the densely populated underdeveloped countries.
The main argument put forward by researchers is that technology is the single biggest driver of inequality. The biggest factor is that the technology-driven economy greatly favours a small group of successful individuals by intensifying their flair and fluke. It's the impact of high-techs that positioned some ultra-rich people on the Wall Street and some ultra-poor people on the main streets.
Most world leaders are these days found talking about the gap between the rich and the poor but fail to control and solve the problems. There's no magic wand and no all-time-fit solution. Economists, however, suggest that spreading hi-tech education to the poor, well-targeted income-support policies by the state, better job related training for the poor and low-skilled workers, minimum wage commensurate with the basic needs of life and education for all are the best ways to lessen the gap.
The writer is the CFO of a private group of industries.
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