Thailand has made significant progress in digital development, including through its industrial transformation policy (Thailand 4.0). In line with the global trend, the COVID-19 pandemic and associated safe distancing measures have further accelerated the digital revolution. Empirical analysis, using granular product-level export data, suggests that digitalization (ICT infrastructure and usage, industrial robot installation and patents) is positively associated with higher export sophistication. While digitalization has been increasing in Thailand, there is sizable scope to further expand digital infrastructure and research and development. The analysis suggests that a multi-pronged approach with emphasis in three key dimensions-technology, investment and training-is needed to appropriately reap the benefits from digitalization.
Digital technologies offer powerful tools that public administrations can leverage on to modernize and improve their operational efficiency. Bangladesh has progressively embraced GovTech solutions over the past decade and has adopted an ambitious digitalization agenda in the 8th Five-Year Plan (FYP). This note discusses Bangladesh’s digitalization advancements and presents empirical evidence in support of GovTech efforts to improve tax revenue performance, as well as health and education outcomes.
Around 60 percent of the labor force in Bangladesh is employed in industries at a high risk of automation. Furthermore, automation in advanced economies will lead to the “onshoring” of manufacturing activities that were offshored to other countries. This is a critical time for Bangladesh, and every effort must be made to upgrade the RMG sector and keep it competitive. This includes increasing the technology used in factories, upgrading the skills of workers, and improving logistics, including transportation. Efforts to increase skills are complementary to policies needed in response to automation which center on upgrading the skills of labor through education and training.
Globally, the COVID-19 pandemic and associated safe distancing measures have accelerated the digital revolution. A similar dynamic is taking place in Singapore, a country at the forefront of digital usage, including through unprecedented growth of e-commerce. An empirical analysis of sector-level labor productivity growth in advanced economies, including Singapore, suggests that digitalization and innovation, captured through e-commerce, robotization, and research and development, are associated with higher labor productivity growth. Singapore has scope for a sizeable expansion of e-commerce (despite recent rapid growth) and of research and development. This would help the country further reap the benefits of the digital economy, notably through higher productivity growth, and accelerate economic transformation.
Many studies predict massive job losses and real wage decline as a result of the ongoing widespread automation of production, a trend that may be further aggravated by the COVID-19 crisis. Yet automation is also expected to raise productivity and output. How can we share the gains from automation more widely, for the benefit of all? And what are the attendant equity-efficiency trade-offs? We analyze this issue by considering the effects of fiscal policies that seek to redistribute the gains from automation and address income inequality. We use a dynamic general equilibrium model with monopolistic competition, including a novel specification linking corporate power to automation. While fiscal policy cannot eliminate the classic equity-efficiency trade-offs, it can help improve them, reducing inequality at small or no loss of output. This is particularly so when policy takes advantage of novel, less distortive transmission channels of fiscal policy created by the empirically observed link between corporate market power and automation.