Top Highlights

• Technological change recently has not delivered its full potential in boosting productivity and economic growth. It has pushed income inequality higher and generated fears about a “robocalypse”—massive job losses from automation.
• technological change is inherently disruptive and entails difficult transitions. It also inevitably creates winners and losers—as does globalization.
• With improved and more responsive policies, better outcomes are possible.
• Technology poses new challenges for this economic convergence. Manufacturing-led growth in emerging economies has been the dominant driver of convergence, fueled by their comparative advantage in labor-intensive production based on their large pools of low-skill, low-wage workers.
• The new technologies favoring capital and higher-level skills have contributed to a decline in labor’s share of income and to increased wage inequality. They have also been associated with more concentrated industry structures and high economic rents enjoyed by dominant firms.

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