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COVID-19 leads to massive labour income losses worldwide

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The devastating losses in working hours caused by the COVID-19 pandemic  have brought a “massive” drop in labour income for workers around the world, says the International Labour Organization (ILO) in its latest assessment of the effects of the pandemic on the world of work.

Global labour income is estimated to have declined by 10.7 per cent, or US$ 3.5 trillion, in the first three quarters of 2020, compared with the same period in 2019. This figure excludes income support provided through government measures.

The biggest drop was in lower-middle income countries, where the labour income losses reached 15.1 per cent, with the Americas the hardest hit region at 12.1 per cent.

The ILO Monitor: COVID-19 and the world of work. Sixth edition , says that the global working hour losses in the first nine months of 2020 have been “considerably larger” than estimated in the previous edition of the Monitor (issued on 30 June).

For example, the revised estimate of global working time lost in the second quarter (Q2) of this year (when compared to Q4 2019) is for 17.3 per cent, equivalent to 495 million full time equivalent (FTE) jobs (based on a 48-hour working week), whereas the earlier estimate was for 14 per cent, or 400 million FTE jobs. In Q3 of 2020, global working hour losses of 12.1 per cent (345 million FTE jobs) are expected.

The outlook for Q4 has worsened significantly since the last ILO Monitor  was issued. Under the ILO’s baseline scenario, global working-hour losses are now projected to amount to 8.6 per cent in the fourth quarter of 2020 (compared to Q4 2019), which corresponds to 245 million FTE jobs. This is an increase from the ILO’s previous estimate of 4.9 per cent or 140 million FTE jobs.

One reason for the estimated increases in working-hour losses is that workers in developing and emerging economies, especially those in informal employment, have been much more affected than by past crises, the Monitor says.

It also notes that the drop in employment is more attributable to inactivity than to unemployment, with important policy implications.

While many stringent workplace closures have been relaxed, there are significant variations between regions. 94 per cent of workers are still in countries with some sort of workplace restrictions, and 32 per cent are in countries with closures for all but essential workplaces.

The “fiscal stimulus gap”

The 6th edition of the Monitor also looks at the effectiveness of fiscal stimulus in alleviating labour market impacts.

In countries where sufficient data is available for Q2 2020, a clear correlation exists, showing that the larger the fiscal stimulus (as a percentage of GDP), the lower the working-hour losses. In that period, globally an additional fiscal stimulus of 1 per cent of annual GDP would have reduced working hour losses by a further 0.8 per cent.

However, while fiscal stimulus packages have played a significant role in supporting economic activity and reducing the fall in working hours, they have been concentrated in high-income countries, as emerging and developing economies have limited capacity to finance such measures.

In order for developing countries to reach the same ratio of stimulus to working hours lost as in high-income countries, they would need to inject a further US$982 billion (US$45 billion in low-income countries and US$937 billion in lower-middle income countries). The stimulus gap for low income countries amounts to less than 1 per cent of the total value of the fiscal stimulus packages announced by high-income countries.

This huge “fiscal stimulus gap” is even more worrying in the light of the social protection deficits in many developing countries. Moreover, some of these countries have also had to redirect public spending from other objectives in order to mitigate the labour market impact of the crisis.

“Just as we need to redouble our efforts to beat the virus, so we need to act urgently and at scale to overcome its economic, social and employment impacts. That includes sustaining support for jobs, businesses and incomes,” said ILO Director-General Guy Ryder.

“As the United Nations General Assembly gathers in New York, there is pressing need for the international community to set out a global strategy for recovery through dialogue, cooperation and solidarity. No group, country or region can beat this crisis alone,” he concluded.

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Earth Observation Data Could Represent A Billion-Dollar Opportunity For Africa

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Earth observation [EO] data provides a billion-dollar opportunity for economies on the African continent, one that could create jobs and build new resilience after COVID-19.

The newly released report Unlocking the Potential of Earth Observation to address Africa’s critical challenges lays out the multiple economic benefits from EO data. The report was written in collaboration with Digital Earth Africa, an initiative that is a world first in providing freely accessible data that maps the entire African continent.

This report marks the first known time the potential impact of EO for Africa has been quantified. According to estimates, EO could be worth up to $2 billion a year thanks to:

1. A strengthened EO industry. Improved use of EO data could lead to an extra $500 million in yearly EO sales along with new job opportunities and increased fiscal revenues.

2. Boosted agricultural productivity. Better data could potentially be worth an extra $900 million a year, thanks to water savings and productivity gains for farmers, not to mention reduced pesticide usage.

3. Better regulation of gold mining activity. Data allows countries to crack down on illegal mining, providing a potential savings of at least $900 million from reduced environmental damage and fiscal evasion.

The report shows the opportunity available in EO data to strengthen economies and reach sustainability goals. EO data can help governments make more informed decisions regarding water, agriculture, food security and urbanization. Advancing new collaborations between public and private efforts can incentivize data sharing to develop EO industries on the continent even further.

Dr Adam Lewis, Managing Director of the Digital Earth Program welcomes the findings of the report as the first of its kind to quantify the potential benefits of the program. “Through collaboration with key partners both within Africa and across the globe, we have made significant progress in turning this potential into a reality. Over the last 12 months the program has met a number of milestones in improving access to data and services within Africa. Working with Amazon Web Services as well as international space agencies and the private sector, we have been able to provide access to locally stored analysis-ready satellite data within Africa.” Adam said.

“We are proud to support Digital Earth Africa’s efforts to make Earth observation data more easily accessible to African nations,” said Ana Pinheiro Privette, Lead for Amazon Sustainability Data Initiative. “Through the Amazon Sustainability Data Initiative, Amazon is making available petabytes of Earth observation data, which provide valuable insights for communities to manage climate impacts including increased floods and droughts.”

Valuing the impact of EO is an emerging practice globally, with recent reports covering the Asia Pacific, Australia, the European Union and the UK, but this is the first such report for Africa. The report was developed following examination of the readiness of African countries to effectively and efficiently grow their geospatial capabilities, integrated with study of the potential economic benefit of EO data adoption on specific sustainable development focus areas.

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Data-Driven Operations Are Key to Future of Manufacturing

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In the near future, manufacturing companies will collaborate in hyperconnected value networks in which data-and-analytics applications drive productivity, new customer experiences and societal and environmental impact. A new white paper, Data Excellence: Transforming Manufacturing and Supply Systems, released today presents the challenges for manufacturers and provides the steps to overcome them.

According to the report, nearly three-quarters of 1,300 surveyed manufacturing executives consider advanced analytics to be critical for success and more important today than three years ago. However, only a few companies capture the full value that data and analytics can unlock to address manufacturers’ most pressing challenges. Less than 20% of surveyed participants prioritize advanced analytics to promote either short-term cost reductions or longer-term structural cost improvements. Only 39% have managed to scale data-driven use cases beyond the production process of a single product and thus achieve a clearly positive business case.

Surveyed manufacturers cited various challenges that impeded their efforts to further scale and implement data-and-analytics solutions within their plants and across networks:

  • They struggle to prioritize the right value-adding use cases from a broad range of applications
  • They have not put in place technological enablers, such as data security or advanced algorithms
  • They lack critical organizational enablers, such as skills and capabilities and effective internal governance

This study by the World Economic Forum, in collaboration with the Boston Consulting Group (BCG), features insights from a unique community of 40+ manufacturing organizations and leading academics and public sector representatives, identifying six priorities to capture value from data and analytics in manufacturing:

  • Define a data-to-value strategy and roadmap
  • Incentivize internal and external ecosystem partners
  • Build capabilities to capture and use data
  • Implement an open platform to unlock data silos
  • Enable connectivity for low-latency, high-bandwidth data flows
  • Ensure data security and privacy

“These findings will help accelerate our journey to support companies in devising a path forward to reach the next level of data-based manufacturing excellence, build trust among manufacturing, suppliers and customers, and unlock new value through the development of new data-driven ecosystems,” said Francisco Betti, Head of Shaping the Future of Advanced Manufacturing and Production at the World Economic Forum.

“Manufacturing is on the verge of a data‑driven revolution,” said Daniel Küpper, Managing Director and Partner of BCG and a report co-author. “But many companies have become disillusioned because they lack the technological backbone required to effectively scale data-and-analytics applications. Establishing these prerequisites will be critical to success in the post-pandemic world.”

As a next step, the community is co-developing a Manufacturing Data Excellence Framework, which comprises value-adding applications as well as technological and organizational success factors. Companies will be able to leverage this framework to accelerate the development of globally connected manufacturing data ecosystems.

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Digitalization crucial to SIDs’ COVID-19 recovery, long-term development

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The upscaling of digital technologies presents a host of opportunities for small island developing states (SIDS) to diversify their economies, boost manufacturing, gain greater access to global value chains, and improve disaster preparedness. However, significant obstacles remain, including inadequate digital infrastructure, insufficient training opportunities for women and young people, a growing digital divide, and a lack of data and policy knowledge. That’s according to an expert panel convened for the Global Manufacturing and Industrialisation Summit’s Digital Series on the topic: “How Information and Communication Technologies can foster inclusive and sustainable industrial development in Small Island Developing States”.

Ralf Bredel, Chief of the Asia-Pacific Regional Programme at the United Nations Industrial Development Organization (UNIDO), said that SIDS share common challenges such as limited resource bases, long distances to primary markets, and vulnerability to climate change.

“ICT has the potential to help SIDS in overcoming some of the challenges derived from the isolation and remoteness. It can support trade in economic diversification. This is even more true under the current circumstances, with COVID-19 and the restrictions on people’s movements and the heavy blow to SIDS’ economies in relation to their continued reliance on tourism,” said Bredel.

Vanessa Gray, Head of the Division for Least Developed Countries (LDCs), Small Island Developing States (SIDS) and Emergency Telecommunications at the International Telecommunication Union (ITU), added, “We know that small islands are naturally prone to disasters caused by earthquakes and severe weather events and are being affected by climate change, resulting in increased tropical cyclones, hurricanes, flood and landslides, to name a few. Connectivity can help address these events by providing remote communities with access to early warning systems, real-time weather information, remote sensing and geographic information systems.”

Gary Jackson, Executive Director of the Caribbean Centre for Renewable Energy and Energy Efficiency (CCREEE), said that countries in the region are “pushing the envelope” towards energy efficiency.

“We have to recognize that islands don’t have what we call a supergrid, don’t have a lot of interconnections that would give us reliability and availability and that’s what people really want,” said Jackson. “So one of the things we have to consider is how we move towards decentralization, decarbonization and some of the things that we need to do to ensure that reliability, availability and affordability are consistent with what people require.”

Michelle Marius, Publisher of the ICT Pulse blog highlighted a continuing gender gap concerning digital employment. “We do have so many girls and women in the workforce. Many of them, sometimes even in management positions in reputable organisations, but somehow we still have not been able to crack that barrier between women in tech and digital entrepreneurship by women” she noted.

Amjad Umar, Director and Professor of ISEM (Information Systems Engineering and Management) programme at Harrisburg University of Science and Technology, said, “We know that, in many cases, SIDS do not have 3G technologies – they are still at 2G range. So, we specifically designed this plan (for the ICT4SIDS Partnership) that produces solutions that would work with very, very low technologies…”

“Digitalization consists of people, processes and technologies,” underlined Umar.

Concluding, moderator Martin Lugmayr, Sustainable Energy Expert at UNIDO, stressed that there is a long way to go towards realizing inclusive and sustainable industrial development in SIDS, particularly in light of current circumstances. “COVID-19 recovery must have a long-term perspective. Iit has to be green, it has to be blue in the case of Small Island Developing States, and it has to be digital,” he said.

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