Development challenges demand unified approach

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Developing countries like Bangladesh, India, Pakistan, and Indonesia are facing four mammoth development challenges.

The first one is about growing graduate unemployment. That's followed by the main one (2nd) linked to erosion of age-old competitive advantage -- labour and material advantage -- because of advent of the fourth professional revolution (4IR). Attaining sustainable development goals forms another challenge. And the fourth one is to keep increasing per capita income for a price of over 7 % over another 30 years -- doubling atlanta divorce attorneys decade.

These countries are losing their value addition capacity out of labour and recycleables. They have to keep increasing their financial outputs while triggering less injury to environment and leaving no person behind. What should then be considered a unified strategy in addressing these conflicting goals that seem to be a daunting challenge facing these countries?

According to data from advanced countries, you will find a strong correlation between level of education and per capita income. For example, data compiled by the USA's Economic Policy Institute show, college graduates, typically, earned 56 per cent a lot more than high-school graduates in 2015. And it has increased 51 % in 2019, reaching the highest gap since 1973.

To replicate such effect of education on income level, developing countries have already been increasing investment in tertiary education, making a growing number of graduates. But unfortunately, the income gap between high-school dropouts and university graduates has been falling, instead of rising, in most of the developed countries. For instance, in Bangladesh, such a gap has already reached zero for fresh graduates, raising the question about the role of education on income. It means that developing countries cannot keep increasing the income level by generating more graduates. Growing graduate unemployment also poses barriers to attainment of Sustainable Development Goals (SGDs).

In age the fourth industrial revolution, the technology stack made up of robotics, automation, and artificial intelligence has been transforming productive activities. Because of this, labour content in making and consuming nearly every product has been falling.

Moreover, the attainment of SDGs demands us to lessen wastage and pollution. Therefore, competitive advantage out of labour, triggering harm to air, soil, and water, and wasting energy plus the material has been eroding. Such reality is weakening the prevailing production strategy of developing countries. Within the given context, attaining SDGs and keep increasing per capita income in age 4IR is apparently conflicting in nature.

Conventional means like buying infrastructure, offering subsidy, and being lenient to environmental policies will not scale up past success. Due to this fact, the suggestion of borrowing to scale up the prevailing way of doing things does not succeed. Instead, the challenge is to increase capacity of value addition and increase profit, while consuming and wasting less may be the necessary core competence.

It might also be recommended that developing countries should increase research and development (R&D) investment. Like education, there appears to be no natural correlation between R&D investment and financial growth. The conventional monetary convinced that the expansion of education and investment in R&D will exogenously contribute to economic growth does not appear to be functioning in developing countries in this age of 4IR. Measures ought to be taken in establishing explicit linkage (endogenous) between advanced schooling, R&D investment, and monetary growth in order that both economical outputs and employment keep growing meeting SDGs, given the 4IR.

The unified strategy of addressing conflicting conditions should concentrate on creating economic value out of ideas by harnessing mental capacity of an increasing number of graduates. Rather than lowering corporate tax and import duty, the incentive should be destined for redesigning products and processes so that material and energy consumption decreases, and yield increases. And it ought to be achieved not by importing prepared to use technology. Rather the focus should be on absorption of the state-of-the-art technologies, adapting them with local context, and advancing them further so that cost and quality good thing about products of Bangladesh and other developing countries keep increasing through value addition out of ideas, instead of tax adjustment, or cash incentives.

Such value addition out of ideas should be attained by engaging local graduates in R&D, consequentially creating new jobs for them. Therefore, economical outputs will be expanding quicker due to quality enhancement and cost reduction, creating new jobs. Additional job creation in production will probably outweigh probable job loss because of automation. Moreover, high-income jobs will be created in performing R&D.

It appears that the technology stack powering the fourth commercial revolution has tremendous underlying potential to aid ideas for redesigning products and processes for offering top quality products at less expensive while causing less injury to environment. The task is to exploit them by developing local R&D capacity unlike importing prepared to deploy labour-saving machinery from advanced countries.

As opposed to following the linear model of innovation in innovating new products out of preliminary research, the unified approach should develop the strategy of redesigning existing products and processes out of ideas of technology stack powering the fourth industrial revolution. For example, local research on image processing and machine intelligence leading to innovations of smarter fishing will lead to higher income, lower wastage of marine sources, and new R&D jobs for university graduates.  Such redesigning capability by leveraging the 4IR technology stack will lead to acquisition of advanced productive knowledge paving just how for attaining capacity for producing more technical products, adding increasing value.

It's being observed that SDG attainment discussion in developing countries has been dominated by additional resource allocation. For instance, it's being estimated that Bangladesh needs near a trillion dollars by 2030 to meet SDGs. From where should Bangladesh get this fund? & most importantly, for what purpose will such a fund be utilised? As usual, should Bangladesh keep borrowing from international lenders to scale up existing ways? If Bangladesh labour starts losing competitive advantage, how will Bangladesh succeed to settle? Instead of asking for additional money to scale up existing productive activities, the focus ought to be rather on value addition capacity enhancement out of ideas, by eating and wasting less. In doing so, developing countries is going back to the basics of producing monetary outputs.

Instead of counting on correlation between education, R&D, employment, and financial growth of other countries, the developing countries should investigate underlying causes, and figure out how they can replicate within their local context. The subsidy and expenditure driven development thinking ought to be replaced by value addition capacity-driven one. The strategy of the redesign of existing products and processes out of 4IR ideas through local R&D in bettering both quality and cost advantage, while triggering less harm to environment and leaving no person behind, gets the potential to meet four mammoth development challenges simultaneously.
Source: https://thefinancialexpress.com.bd

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