Using tech to reverse wealth inequality

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The increasing pace of technological evolution is causing serious concerns about its impact on wealth inequality and creating jobs.

While income inequality is increasing, how is it affecting the Middle East and can startups and individual initiatives change it?

“Technology is the main driver of the recent increases in inequality. It’s the biggest factor,” wrote MIT Sloan School professor of management Erik Brynjolfsson in the MIT Technology Review.

Technology has been destroying jobs for decades, from the move to automated factories to the expected shift to self driving cars. But at the same time, it’s created more jobs than it has destroyed in the last 144 years, noted a study by Deloitte.

“With technological advancement, some will be wealthier but this would create a lot of job opportunities for others,” Dubai-based healthcare expert Roland Daher told Wamda.

Al Araby Al Jadid economics journalist Rasha Abou Zaki told Wamda that while technological growth drastically changed work patterns, we couldn’t just think about the subject simply in terms of creating jobs or eliminating them.

“In the midst of the current technological evolution, the nature of work differs completely; it moves from production depending on manual and physical effort in manufacturing, agriculture and service sectors to production based on intellectual effort,” she said

Where is all the wealth?

Unequal wealth distribution between countries and within countries is increasing, and some say this is due to the loss of jobs caused by technology as people are left behind in the workplace until they enhance their skills.

In 2015 Oxfam calculated that globally the richest 62 people in the world was equal to that of the poorest 3.6 billion people, and that the gap had risen since 2010 as the rich accumulated more wealth proportionally than the poor.

Yet, inequality in the Middle East is substantially higher than in the US or Europe. According to the Economic Research Forum’s 2014 report, Measuring top incomes and inequality in the Middle East, it is the largest in the emerging and developing regions. The top 10 percent of income recipients owns 55 percent of the share of Middle East income (versus 48 percent in the US and 34 percent in Western Europe).

In the Middle East, tech startups are disrupting white collar jobs in healthcareaccounting and law, but The Little Engineer founder Rana El Chemaitelly disagrees that humans will be completely replaced.

“Tech does not take anyone’s place because Man is needed to make a decision no matter how much we depend on AI,” she told Wamda.

And it's not getting better... (Image via Akel)

Challenges to acquiring the right skills

Nevertheless the challenges to upskilling so as not to be replaced by technology are great.

In the Middle East the challenges include inequality in accessing digital services (58.4 percent of people in the Middle East do not have access to the Internet, according to the ITU report, low Internet speeds, and problematic education systems generally that aren’t preparing young people for the future of work.

Abou Zaki said this was leading to a “the brain drain of specialized minds”.

“Knowledge economies will create more concentration and more inequality since financial wealth is tied to knowledge wealth [when it comes to countries and individuals],” she said.

Daher said technology had completely changed the concept of teaching and work, to the point where a doctor must know the basics of programing because we would be in an age where “we should all be programmers, programmers who learn medicine or engineering, or any other specialty”.

The Little Engineers aims to teach children STEM (science, technology, engineering and maths), skills and coding, and has taught about 27,000 students in Lebanon.

“The awareness is there, but the main challenge is in the infrastructure, especially internet quality,” El Chemaitelly said.

The relationship between brain drain and unemployment is obvious.(Image via The Middle East Observer)

Direct and indirect solutions

The Internet could present many opportunities allowing low income and under-industrialized countries to build a digital community that creates jobs.

Technology literally at the service of humans. (Image via Coolpack.com)

In the healthcare sector, for example, doctors in the US are using augmented reality to help patients in the Middle East, and telemedicine is becoming a more widely used technology here.

Daher said these techniques could hypothetically lower the pay of people working in the medical sector, but would lower the cost of healthcare and provide job opportunities as well.

“You won’t need to go to the hospital and pay a lot of money for care you can receive at home, and you won’t need to visit a doctor and pay $200 for each visit while you can use these services for $10 on the platform.”

Using tech to reduce wealth inequality

Financial wealth was tied to the wealth in knowledge, and inequality would not decrease unless people accepted its existence and then changed the pattern of modern production to make it more just, said Abou Zaki.

George Mason University economic professor Tyler Cowen wrote in 2014 that several steps must be taken to allow the redistribution of wealth and lower unemployment rates by using technology. He included in this cheaper healthcare services, more transparency in pricing, cheaper education, more taxes for high income workers, and teaching certain skills to increase employment.

Daher said that while technology may cause immediate unemployment, it would create job opportunities in the long run.

“Technology surpasses geography, and digital healthcare is capable of reaching a lot of remote and urban areas constantly, and after reaching these areas, prices become cheaper and the possibility of gathering a lot of data around a certain disease to study and find cures for arises.”

Daher mentioned the Guaranteed Basic Income that had a referendum for the people to vote on it this year and it was rejected. "But this is a fair enough indicator of things to come," he said. "It’s ok for innovators to get rich, but governments might need to adopt social policies like guaranteed basic income."

The Little Engineer is working on preparing the next generation of “working minds”, through teaching children (and educating adults) about engineering and programing, but with high prices, El Chmaitelly sees that the government should interfere in supporting these initiatives, just like the UAE’s governments does.

Some of the examples of cooperation aiming to bring up a more skilled generation and enhance people’s lives using technology are educational platforms, Maker spaces, the sharing economy in transportation, and interactive mapping.

Community Jameel and Wamda will be hosting an MIT Media Lab Dubai workshop tackling solutions for sustainable cities, led by designers, scientists, engineers and artists​​​​​, on August 29 - September 2.

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