Technology for Inclusion Conference
ADB Headquarters, Manila
April 27, 2018
Good afternoon. Let me begin by thanking the panelists and the participants for this extremely fruitful conference. It was provocative as we expected and raised more questions for all of us to grapple with.
Rapidly evolving digital technologies is a powerful force. They are disruptive. They challenge us to keenly focus on possibilities. They are explosive. Unless we harness these technologies to make our institutions stronger, they will overrun the way we govern our communities.
The pace of technology-driven change will likely quicken. It alters the terms of our confederation. It instantly redefines the horizon. The challenge is to make this fast-paced technology-dictated change work to make human association better and our shared future brighter.
Just thirty years ago, one in four human beings lived in extreme poverty. Today that ratio has fallen to only one in ten. All our development efforts have not been in vain.
Over those same three decades, the average global life expectancy increased by eleven years. Infant and maternal mortality have been cut in half. Across Asia, hundreds of millions have risen from absolute poverty. A very large middle class now redefines and reinvents the ends and means of governance.
The advances in healthcare, education, communications and productivity over the last three decades have been principally driven by the revolution in digital technology. Yet this revolution has only just begun. Cloud computing, artificial intelligence and increasingly more powerful mobile technologies will alter the way we live and the way our economies are organized.
Open borders, free trade and increased connectivity magnify the revolutionary effects of new digital technologies. In the coming years, the new technologies promise to improve productivity drastically. They will change the way wealth is produced, shared and used.
We will go through a long phase of disruption and reconsolidation and again disruption. The very definitions of economic development and human progress will have to be recast at increasing intermittence. Instead of fearing digital chaos, we should aspire to make technology-driven economies more inclusive.
It has been estimated that artificial intelligence could increase productivity by as much as 40 percent and increase global GDP growth by 25 percent by 2035. Research made available earlier this year predict that in the Philippines alone, digital products and services will grow from just 3 percent of total economic output in 2017 to 40 percent in 2021. They could increase annual growth by half a percent.
However, new digital technologies are also job-displacing. Increased use of artificial intelligence, for instance, could shrink employment in our vital business process outsourcing sector. We cannot plan on coping with the downsides unless we fully grasp the nature and dynamics of technological change.
Fintech (financial technologies) is a particularly dynamic area. New digital tools such as e-payment systems enable us to speed up transactions and improve remittance processing. They make possible a more inclusive financial system. According to one study, digitally driven financial inclusion could increase GDP growth by 3 percent and raise income levels by 11 percent for the poorest.
We are not talking here of hypothetical technologies that might be developed. We are talking here of fully developed technologies now widely in use.
We are at the dawn of a utopia driven by digital technologies. Autonomous vehicles, 3D printing and personalized medicine demand alter the way we do things. Obsolete businesses die like dinosaurs, except at an even faster pace. New businesses will have to be imagined by the day.
Welcome to this brave new world. In it we must rethink the way we do things, including what development banking should be doing.
The discussion has only just begun. It is a discussion we must pursue with courage, with the acceptance that institutions we hold dear must be reinvented or perish.
Let us continue with this.
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