A Sneak Peek to The Future of Economy

When we are talking about future, things such as robots, autonomous production, self-driving cars, or even ultra-futuristic phone that we’ve always seen on sci-fi movie may always come up in our head. Yet, actually the future is not only involving those things that are mentioned above, but also involving and even shaping our economy. Then, what is the realistic sneak peek regarding to the future of our economy?

Concerns on Workforce

We all cannot deny that one of our biggest concerns regarding to the future of economy is in term of workforce, especially the replacement of human workforce by robots. Furthermore, robots are believed to replace more than half of US human workforce within the next decade or two. Jobs that most likely at risk are loan officers, receptionists, paralegal & legal assistance, retail salespersons, taxi drivers, and security guards[1]. In addition, robots also carry some traits that belong to human weaknesses, such as consistency, maximum productivity & output, better safety, and cheaper direct labour costs[2]. Those facts ring us a bell that the negative disruptive impact of the enhancement of technology is real.

The Trend of Sustainability

Another thing that really matters regarding to future of economy is sustainability. With the declining amount of resources and the increasing amount of waste, the need for economic and environmental efficiency is a must. This urgency creates a new economic trend that is oriented to the future, which is the circular economy[3]. 

For those who still confused about the real presence of circular economy, one of the production policy by Danone really represent the bottom line of circular economy, because it is maximizing every possible utility of the resources. The policy itself is related to the production of Greek yoghurt, where the main ingredient is whey acid. Instead of seeing the whey acid as an effluent, they are working with different partners to be able to make whey as a resource for animal feed, fertilizer, and energy[4].

The Evolution of Data

The evolution of data also plays an important role in the future of our economy. Big data and block chain technology are the concrete examples of it, and they both lead to the same goal: efficiency. Big data allows artificial intelligence[5] to process massive amount of raw data in a short time to provide companies information that could increase brand loyalty, manage personalized value chains, uncover truths, predict product and consumer trends, reveal product reliability, and discover real accountability[6]. Meanwhile, block chain technology could remove the need of middlemen in banking transaction and reducing the cost of transaction to less than a dollar and a ten minutes verification period, which unarguably increasing the efficiency of our financial services system. 

This evolution is actually a good thing for us, if we are ready and well - prepared for this, because of all the good traits above. On the other hand, those who are not ready and prepared, they will miss a chance to transcend the quality of both data and financial services

Besides all of those sneak peeks above, the biggest question regarding to the future of economy is ourselves : Are we ready for it? We have to admit that the answer is no, we are not ready for it. There are still a lot of people with limited access to internet. In fact, at the beginning of 2014, the average internet penetration of the world still stands at 39 %, which is very concerning. The policy-makers side are also not ready for the future. For example, the EU commission action about block chain is still on the observation stage, not on the policy-making stage[7], even though EU are desperately in need for a law basis due to the increasing demand for the usage of block chain technology.

What about Indonesia? According to World Economic Forum (WEF), Indonesia are in 73rd place out of 139 countries in terms of Network Readiness Index. The most concerning data is in terms of digital content & infrastructure, because Indonesia are in the 105th place out of 139 countries[8]. In fact, according to a study by LIRNEasia, 61% of Indonesian believe that “Facebook is the Internet”, and 11% of Indonesian who stated that they used Facebook also stated that they didn’t use the internet[9]. Those facts are a clear statement that Indonesia is not ready for the future of economy.

The future is inevitable. Therefore, we need to prepare ourselves to face it. The first thing is that we have to make the best out of technology and back to our principle as human being. Technology should not replace humans. Instead, it should extend human capability and augment people to do work that was previously impossible, such as performing extra-complex surgical activity with the support of technology that once considered as impossible. In addition, the dependency relationship between humans to technology mindset should be changed. Instead, humans should create a supporting relationship to technology, because in the end of the day, technology is only a “device” that supports humans activities.

Policy makers also need to adapt and prepare themselves for the future by working together with private sectors in order to develop comprehensive policy strategies to facilitate more rapid development and deployment of technology that could affect the economy. Especially to support positive disruptions such as blockchain technology and circular economy, like the EU and UK Government already try to do. 

This matter is very urgent, because society needs the positive disruption of technology as soon as possible (in this case, block chain related to financial services & circular economy related to sustainable growth).

Preventive actions such as creating a cybersecurity squad, partnering with websites that are frequently used by people, and tightening legislation related to cyber security to prevent negative disruptions such as cybercrime and fraud is very important. Both cybercrime and fraud really disturb people due to the usage of technology that have already reach the most personal aspect of our life, including our habit and daily life.

Just like Reid Hoffman (co-founder & executive chairman of LinkedIn) said, “The future is sooner & stranger than you think.”

By:  Jascha Santoso | Ilmu Ekonomi 2015 | Staff Divisi Kajian Kanopi 2016

--

References:

[1] Peterson, H. (2015). The 12 Jobs Most At Risk Of Being Replaced by Robots. Retrieved from : http://www.businessinsider.co.id/jobs-at-risk-of-being-replaced-by-robots-2015-10/?r=US&IR=T#LUrsP8Up1xit5ohh.97

[2] Soffar, H. (2015). The Advantages & Disadvantages of Robots in The Factory. Retrieved from : http://www.online-sciences.com/technology/the-advantages-and-disadvantages-of-robots-in-the-factories/

[3] Ellen MacArthurFoundation. Circular Economy. Retrieved from : https://www.ellenmacarthurfoundation.org/circular-economy

[4] Magnin, C. (2016). Toward A Circular Economy in Food. Retrieved from : http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/toward-a-circular-economy-in-food

[5] http://www.computerworld.com/article/2906336/emerging-technology/what-is-artificial-intelligence.html

[6] Oracle Enterprise Architecture. (2016). An Enterprise Architect’s Guide to Big Data, pg. 1. Retrieved from : http://www.oracle.com/technetwork/topics/entarch/articles/oea-big-data-guide-1522052.pdf

[7] Allison, I. (2016). What The European Parliament Vote on Cryptocurrency Really Means. Retrieved from : http://www.ibtimes.co.uk/what-european-parliament-vote-cryptocurrency-regulation-really-means-1562435

[8] World Economic Forum. (2016). The Global Information Technology Report, pg.112. Retrieved from : http://www3.weforum.org/docs/GITR2016/WEF_GITR_Indonesia_2016.pdf

[9] MIrani, Leo (2015).Millions of Facebook Users Have No Idea They’re Using The Internet. Retrieved from : http://qz.com/333313/milliions-of-facebook-users-have-no-idea-theyre-using-the-internet/