The final session is a rapid round of questions and answers covering technology, redistribution, the digital market and Italy between Michael Spence and Tito Boeri, Scientific Director of Trento Economics Festival. Technology and slow growth - Spence says - are not entirely incompatible. There is a transition that needs to take place as technology develops. The demand for high skilled labor has moved faster than the supply resulting in a slow down of growth. It takes time for the labor market to readjust. Spence also believes that the productivity and growth associated with technological development have been slightly overstated. Spence points out that computers existed for 30 years before the the bump in productivity was seen “the bump in productivity will kick in but not as fast as we think.”
When it comes to redistribution Spence believes growth is the best way of distributing resources across the market. He sees it as a more practical solution given the political struggles of redistribution and the fact that growth is required to give governments the resources to fuel their efforts to help those who have been negatively affected by the market. He does not ignore the role of governments and acknowledges the importance and impact of cohesion and structural funds that the European Union has in place but suggests that national governments should be the primary governing body running redistribution efforts. Spence also expressed a desire for the conversation in Europe to change from social security and welfare policy to competitiveness policy. Again, Spence acknowledges social welfare policies and their necessity but wishes more time was devoted to discussing how to make Europe more competitive.
Spence calls the development of the digital marketplace an “unregulated flowering” which has been good but requires regulation. The digital market poses questions of fair competition with services like Uber operating as a taxi service but not being regulated as one. Spence admits that regulation will not be symmetrical across countries except for maybe inside the European Union. This difference in internet and digital regulation can been seen in the differences of China’s strict regulation and United States’s more free approach to the internet.
Watch the interview with Michael Spence: https://youtu.be/Bj7RjnT24uk
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