Toward Full Employment
Approach Paper for the Youth Employment Summit
by Garry Jacobs, N. Asokan & Rajashree Venkatesh
April 14, 2000
This paper discusses the theoretical potential, current global opportunities and broad strategies for creation of 500 million new jobs within a decade. A theoretical understanding of employment generation as one dimension of the social development process challenges common misconceptions and supports the view that full employment is an achievable goal for the international community. A progressive expansion of human needs that generate additional employment opportunities coupled with accelerated growth in the productivity of material and non-material resources provide the essential foundation for full employment. Current international trends in demographics, technology and social organization are opening up opportunities that strongly favor accomplishment of this goal. The Summit will need to project a broad range of strategies to meet the needs of different nations, fields of activity and concerned organizations. Strategies should tap the entire gamut of employment opportunities from agri-business to information technology-enabled services, focusing on activities at the next higher phase of development appropriate to each geographic region and stratum of society. These strategies will achieve maximum results when employment is recognized as the economic equivalent of the right to vote in political democracy and it is guaranteed by all nations as a fundamental human right.
This is a propitious moment for a global summit on youth employment. It is a time of unprecedented opportunity. To fully exploit this opportunity, the summit will need to accomplish three things:
§ Conceptual framework: The summit must establish beyond doubt the theoretical possibility of eradicating youth unemployment on a worldwide basis within a short period of time. The theoretical framework should elucidate the process of employment generation as one aspect of the wider process of social and economic development. It should examine the process of employment generation as a natural social process, not as something to be artificially stimulated or imposed by governments, and identify the means available for accelerating that natural process. Without basing itself on a solid conceptual framework, the summit is likely to place inordinate emphasis on broad statements of good intention or location-specific strategies that will be perceived or dismissed as applicable to only a limited set of local circumstances.
§ Context: The summit must convincingly project the favorable circumstances that make possible the creation of 500 million additional jobs within the present decade. Concern regarding the population explosion and rising unemployment rates have preoccupied political leaders and economic policy-makers for half a century. Nothing will be gained by a mere restatement of what is already known. But a great deal can be gained by recognizing the factors that make the present moment propitious for a radical breakthrough in meeting the legitimate aspirations of people everywhere for assured access to gainful employment. Prevalent and emerging conditions in the world today bring that goal within reach. More than any specific set of remedies, the conference will succeed in the measure it is able to create awareness of the opportunities that now exist for achieving full employment.
§ Strategies: The summit must also provide, at least in outline, a set of policy guidelines and practical strategies that both developing and developed nations can adopt to dramatically improve the prospects for youth employment.
A thorough examination of these three issues leads to the conclusion that creation of 500 million new jobs now as a major step and prelude to global full employment is an achievable goal, not only for a few nations but for the world-at-large.
According to estimates by the International Labor Organization, the world labor force currently numbers approximately 3 billion people, out of which 23 to 30% are underemployed and about 140 million are fully unemployed. The severity and consistently high levels of youth unemployment worldwide are of special concern. The ILO estimates that there are about 60 million young people between the ages of 15 and 24 who are presently in search of work but cannot find it.
At the outset, the approach to youth employment needs to be qualified in two ways:
1. Youth employment is a subset of total employment: While the focus of the YES initiative is on youth employment, this challenge has to be viewed as a subset of the wider issue of providing employment opportunities for all who seek them. Although strategies may target specific sections of the population, the process of employment generation is essentially the same for all ages and levels of the population. In reality it is difficult to segregate the problem of youth employment from that of employment in general, since labor markets do not recognize or respect any such distinctions. Although the Summit should naturally emphasize strategies that directly benefit youth employment, it is important to keep in mind that directly or indirectly employment generation for people at any level of the society and in any age group will open up greater opportunities for youth employment. Therefore, the summit should examine the issue of employment generation in general and then narrow down its focus to policies and strategies concentrating on the young.
2. Employment is no longer a national issue: The process of globalization is rapidly converting employment from a national into a global issue as well as a global opportunity. The positive contribution to the world economy of strong US economic growth, the negative impact of the East Asian financial crisis, and widespread public concern regarding the impact of World Trade Organization agreements are expressions of this fact. Demographic trends and technological developments in the industrialized world will generate new types of employment opportunities for developing countries, stimulating further growth of international migration to developed countries, remittances from workers overseas to developing countries, and out-locating service jobs made possible by the Internet. The opportunity to create 500 million jobs for youth in the coming decade is a global opportunity and will require a global perspective. Action may be primarily focused at the national level, but understanding must encompass changes taking place around the whole world.
What are the factors that contribute to the process of employment generation in society? What is the scope for magnifying or accelerating that process? What are the inherent limits that determine its maximum speed and level of accomplishment? What is the impact of technological development on the creation and destruction of employment opportunities? How do demographic factors influence employment? These and many similar questions lie at the root of the employment issue and need to be answered before any specific set of policy guidelines can be convincingly projected. The Summit needs to present a conceptual framework that positions the process of employment generation as a natural expression of social development and to identify the factors and forces that can hasten this process.
In order to provide a strong theoretical basis for practical action, this framework will need to challenge several traditional views of employment. The notion that technological development and industrialization constitute obstacles to creating sufficient jobs is contrary to fact but still widely accepted in theory. The idea that trade between industrialized and developing countries places inevitable limits on job creation among the wealthier nations of the world needs also to be challenged. So too, the framework must challenge the view that the number of jobs created by any society is a rigid function of fixed economic laws and that any effort to modify the outcome can only be done by creating inherent economic imbalances. It needs also to identify the policy instruments available for modifying or enhancing the process of employment generation.
Humanitys phenomenal social progress over the past few hundred years has been driven by the realization that maximum development of the collective is accomplished by providing maximum freedom and opportunity for the development of each individual member of the collective. This realization underlies the extension of fundamental rights to every citizen, which is the foundation of all democratic forms of governance. The same realization also underlies the commitment of all societies to provide universal primary education to all their citizens. The combination of democracy and education has formed the basis for the scientific, technological and industrial revolutions that have spurred a 20-fold increase in real per capita income in Western Europe since 1800, while halving the average number of working hours since 1900, which makes the accomplishment even more remarkable. The further extension of fundamental human rights to other spheres constitutes the essential and most powerful lever for both extending and accelerating the process of social development worldwide.
The science of economics was founded at a time when it was widely believed humanity had limited capacity to meet its basic material needs. Global achievements during the last century discredit this notion. The economics of global scarcity is rapidly giving way to surplus production capacity, at least with regard to a wide range of basic commodities. Today a few nations possess the potential capability of supplying the entire worlds need for food, clothing, steel, automobiles, computers and many other commodities. The real issue today is not the worlds capacity to produce sufficient goods and services to meet everyones material needs, but the capacity of our economic systems to provide everyone with the purchasing power needed to fulfill those needs.
The social life of large sections of humanity has been radically transformed over the last century. Hundreds of millions of people have been drawn away from a subsistence level existence in agriculture to urban areas and industrial employment. These changes have been accompanied by an unprecedented advancement in living standards around the world. At the same time, they have promoted a way of life that makes individuals far more dependent for their economic security on external social conditions than they have ever been in the past.
Today the livelihoods of billions of individuals around the world are powerfully influenced by factors affecting the national and global economy, such as trade policies, interest and exchange rates, levels of military spending and consumer demand. While it dramatically enhances social, political, religious and intellectual rights and freedom, at the same time modern society has become so structured that it also reduces freedom for individual economic initiative in many ways. Governments today routinely intervene in every aspect of the individuals economic existence. These interventions exert a powerful influence on the type and number of jobs available in every country. Employment opportunities are directly linked to government policies governing minimum wage laws, interest rates, budget deficits, imports and exports, environmental regulations and restrictions, taxation policies, defense spending, immigration, industrial development, investment, licensing of practitioners, zoning laws and countless other public policy issues. A tax system that provides incentives for capital investment in the form of depreciation allowances while discouraging employment through the levying of payroll tax is an example of an explicit policy that creates an inbuilt bias toward investment in technology rather than labor.
Under the current economic system, employment is the only viable means of distributing purchasing power to every citizen. As the right to vote is the basis for modern political democracy, the right to employment is the essential foundation for economic democracy. In the absence of alternative means of ensuring the livelihood of all its citizens, society has the responsibility to provide employment opportunities for everyone. Employment can no longer be considered a privilege. It is a necessity for economic survival and should be recognized as a fundamental human right. The Summit should project the view that the right to employment must be backed by the full commitment and determination of governments.
An international labor convention calling for a commitment to full employment was ratified by over 80 countries in the mid 1960s. During the early 1990s, the United Nations called for a broader definition of human rights to include economic as well as political rights. This view was strongly projected by the International Commission on Peace and Food (ICPF) in the report it submitted to the United Nations in 1994 entitled Uncommon Opportunities: An Agenda for Peace and Equitable Development. The Commission argued that global prosperity can become a reality in the near future, provided that the necessary foundation is laid down and the cornerstone of that foundation is a global affirmation and commitment to extend fundamental economic rights to every human being.
Recognizing the right of every citizen to employment is the essential basis and the most effective strategy for generating the necessary political will to provide jobs for all. What is needed is not another job generation program, but a change in social values that will accelerate the natural and inevitable evolution of society, from one in which labor is regarded as a dispensable resource to one based on full human rights and the enormous productive potential of the human being. The type and magnitude of change needed today is comparable to that embodied in President Roosevelts New Deal for the American people during the Great Depression at a time when 25 percent of the work force was unemployed, to the Indian Government's decision to launch the Green Revolution in the mid-1960s to achieve self-sufficiency in food grains at a time when the country was highly dependent on imported food to stave off famine, and to Mikhail Gorbachevs initiatives late in the 1980s to end the Cold War and transform Soviet society. 
Affirmation and commitment to this principle does not mean that government should or could employ every job seeker, any more than a commitment to food security means that government should or could by itself grow all the food needed to meet all the needs of its population. What it does mean is that government has the obligationand it also has the powerto formulate and modify its policies to make the economic system meet the objective of full employment.
The power of this commitment can be illustrated in the case of Japan, which has been struggling to revive consumer confidence and economic growth for more than a decade. The Japanese people enjoy one of the highest living standards in the world and possess in excess of $10 trillion in personal savings. Yet, repeated efforts by the government to stimulate the economy through public works expenditure, large scale government borrowings, soaring public debt, zero interest monetary policy, and restructuring of entire industries have failed to bring about a recovery. The primary reason for this failure is the loss of the peoples confidence regarding employment and financial security. During the 1990s unemployment rates have risen from under 2% to nearly 5%, causing widespread anxiety regarding the future. Although the government possesses many policy instruments that can address this issue, its commitment to other goals has aggravated the countys economic problems and delayed recovery. A commitment to full employment could dramatically change public sentiment, investment and consumption patterns within a short time, which fiscal and monetary policies have thus far been unable to do.
None will quarrel with the desirability of full employment, but many will question whether it is practically possible. Therefore, it is essential that the conceptual framework reveal the enormous untapped potential for additional employment generation nationally and globally. The summit must project the view that society has the ability to create as many jobs as necessary without undermining the basic efficiency of the market economic system, provided it first makes the commitment to give employment the importance it deserves.
In its World Employment Report 1995, ILO argued that if most countries accept the defeatist attitude that full employment is unattainable then this by itself is likely to contribute to a worsening of the current situation. The converse is also true. If the countries of the world accept the constructive attitude that full employment is attainable, attainable in the near or mid term, then this by itself will generate commitment, release energy and compel actions to achieve it.
A theoretical framework for employment is essential because it will establish the fact that full employment is an achievable goal. Quoting further from ICPFs report:
We must recognize that the present status and functioning of our economies is the result of specific choices that have been made in the past, based on priorities and values that were relevant or dominant at the time, but which we certainly are not obliged to live with indefinitely and, in fact, are continuously in the process of discarding in favor of new values and priorities. The rapid adoption of environmentally-friendly policies around the world is positive proof of how quickly the rules, even economic rules, can change when there is a concerted will for a breakthrough. So too, the welfare policies of the European Union that have resulted in 70 percent rise in national income over the past two decades, but only a 9 percent increase in the number of jobs, were due to conscious choices that favored the employed over the unemployed, not the inevitability of the market.
The task of the summit is to identify those conscious choices that determine the current composition of economic activities and to demonstrate that a modification in those choices can usher in an economic system which generates greater opportunity and prosperity for all, just as the introduction of universal suffrage and universal education engenders a stronger, freer, more productive society for all.
The potential for increasing employment opportunities through innovative policy measures is dramatically illustrated by the accomplishments of the Netherlands during the past decade. Government, employers organizations and trade unions have worked together to find creative ways to reduce unemployment. The effort included a review of existing policies to identify those that could be modified to promote employment. One agreement enabled the unions and employers to implement a policy of wage restraint as a trade-off for a progressive reduction in working hours. Another agreement negotiated between the unions, the employers and the government provided for an exchange of wage restraint against a decrease in taxes and social contributions. Close to a hundred instructions, policy statements and reports have been issued in follow-up to these agreements.
The result has been widely acclaimed as the Dutch miracle. Throughout the 1990s, this cooperative effort enabled the country to increase economic growth and employment more rapidly than its European neighbors. A close examination of government policies led to the identification of policy changes that increased worker flexibility and encouraged part-time employment. As a result of these initiatives, the percentage of people working part-time has risen from 22% to 37% in ten years. Two thirds of the women and 15% of the men are now working part-time. Overall, the unemployment rate in the Netherlands has declined from 10% in 1994 to less than 4% in early 2000, compared to unemployment rates of 10% or higher in neighboring countries. The Dutch strategy has been equally successful in dealing with the problem of youth unemployment. In 1997, the unemployment rate among those in the 15-24 year age group was 28% in France compared to only 9.7% in the Netherlands.
In these and other ways, the Summit needs to make evident that options do exist to create employment opportunities for everyone. The essential requirement is social commitment and determination.
A solution to the current problem of unemployment can be arrived at by viewing employment as a natural function of social development. The faster and further a society develops, the greater its capacity to generate employment opportunities for its members. Development occurs when society possesses unutilized resources that are harnessed to fulfill unmet social needs.
Economics was founded on the implicit, Newtonian-like assumptions that society consists of a limited number of human needs and a limited capacity, i.e. limited resources, to produce goods and services to fill those needs. There is now ample evidence to prove that neither of these assumptions is valid. Neither human needs nor human resources are finite.
Had there truly been limits to the capacity of society to generate new needs, a number of developed nations should by now have exhibited symptoms of satiety and stagnation. The opposite seems to be closer to the truth. Human needs exist in an ascending hierarchy that includes physical, vital or social, mental and spiritual dimensions. Humanity exhibits an inexhaustible appetite for physical security and comfort; social relationship and enjoyment; invention, acquisition of knowledge and creativity; and the quest for the ultimate truths and meaning of life and existence. Each successive level of social accomplishment leads to the emergence of new and higher needs and the creation of new employment opportunities.
While physical needs may be limited in their quantity, they are not subject to any limits to qualitative expansion. The number of calories consumed by a healthy individual is certainly subject to narrow limits, but the quality and variety of foods consumed is capable of unlimited variation. The same is true of other basic physical needs such as for housing, clothing, transportation, communication, etc. Thus, the prosperity of modern societies has multiplied rather than reduced the demand for physical products and services.
Social needs include the desire for human relationship, interaction, recreation, and enjoyment. In the measure basic physical needs are met, increasing human energy is channeled into the pursuit of social forms of fulfillment. Travel, tourism, sporting events, amusement, and entertainment are fields that are presently undergoing rapid expansion in most countries. The fulfillment of mental needs has only recently begun to constitute a major force for economic expansion. Educational products and services are proliferating at all levels of society in both developing and developed nations. Demand for information, news, facts, printed materials, scientific research, and technological innovation are growing exponentially. Thus, it is evident that there is no inherent limit to the capacity of society to spawn new needs that it seeks to fulfill and new employment opportunities to fill them.
Human needs may not be limited, but common sense tells us that the capacity of society to meet those needs is subject to severe limitations. Past experience and present constraints support the view that human productive capacity depends on the availability of resources and that the limited availability of resources constitute real limits to human development and employment generation.
An impartial assessment will make it evident that the constraints society faces today are lesser rather than greater than they have been in the past. Human development is a process of expanding rather than exhausting the potentials of a finite physical and social environment. Development continuously increases the range of human potential and pushes the ceiling of accomplishment ever higher above its present level.
Since the time of Malthus, the rapid expansion of human population, the spread of industrialization and urbanization have been cited as compelling proof of the limits to growth. But equally compelling facts can be cited that contradict this view. Over the past two centuries world population has grown more than seven-fold, yet living standards in most parts of the world have soared by an even greater multiple during this period. During the 20th Century world GDP at constant prices increased 19-fold, while world population grew nearly 4-fold. This has resulted in a near 5-fold growth of global per capita GDP since 1900. Between 1950 and 1990, average, global per capita income tripled, in spite of unprecedented population growth, and average real per capita consumption in developing countries doubled.
Historically, population growth has acted as a powerful stimulus to economic development. A graphic representation of the two shows that they have advanced according to an almost one-to-one progression. Short-term, rapid expansion of population has certainly placed a heavy burden on existing productive capacities and employment opportunities in many countries. But, as the rates of population growth decline and rates of development increase, these imbalances can be rectified.
The more serious issue is whether the earths limited resources can support high levels of economic development for a global population that may reach nine billion before it levels off. Resources are inputs or factors for carrying out an activity effectively. They are of several types. Land, water, coal, oil, minerals, and power are physical resources. The social resources consist of the societys capacity to manage and direct complex systems and activities. Knowledge, information, technology and the capacity to organize are mental resources. The energy, skills and capacities of people are human resource.
Economics is very much concerned with the scarcity of resources. But when viewed from a wider perspective, it can be seen that while the quantity of some physical resources may be inherently limited, the notion of scarcity does not really apply to social, mental and human resources. Any of these non-physical resources may be limited in their immediate availability, but none are subject to inherent or permanent limits. Organizational capabilities can be increased over time. The horizons of knowledge, information and technology are continuously expanding. The human resource becomes progressively more capable and productive.
As a society develops to higher levels, non-material resources play an increasingly important role as factors of production. This principle is embodied in the concept of the Information Age, an era in which access to information has become a valuable input and precious resource for improving the quality of decisions and the productivity of activities. One characteristic of information is that it is not consumed by being distributed or utilized, thus it is inexhaustible. Access to information now enables investors to move financial resources around the world instantaneously in search of higher returns. The increasing contribution of higher, non-material resources helps explain how many societies continue to expand productivity on a limited physical resource base.
Increasing the input of higher resources also makes it possible to more efficiently utilize the available material resources. Technological resources have made it possible since 1980 to increase the worlds proven and economically accessible oil reserves by 50%, while reducing the finding cost by nearly 75%. At the same time technology has reduced the materials and energy input required for a wide range of products. Land and water productivity are very low in many developing countries. Studies indicate that the earths land resources are capable of producing sufficient food to support a population many times the current size. Cotton grown under irrigated conditions in India on average consumes 30 times as much water and five times as much land per unit of cotton produced than is required by leading cotton growers in California using the latest technology for crop management. Dutch agricultural scientists have recently demonstrated that it actually requires only 1.4 liters of water to grow a kilogram of vegetables, compared to more than 1000 liters commonly utilized by traditional cultivation practices. In a similar manner, organizational resources can increase the speed and efficiency with which every productive activity is carried out, thereby reducing costs and making them more affordable to the masses.
Every society has a vast reservoir of unutilized and underutilized resources in terms of knowledge, skill, technology, information, organization, management expertise, money and cultural values that can be harnessed to meet those needs. Indian citizens currently invest more than $6 billion of precious foreign exchange reserves annually to import gold as a form of private savings. The country now holds more than $200 billion in the form of gold that could be much more productively invested in activities that accelerate economic growth and employment. Instead of concerning itself with how to attract an additional $5 or 10 billion in foreign investment, government policies can be introduced to encourage productive investment of this huge resource which presently remains untapped.
Resources are a creation of the human mind. It is the application of human intelligence and inventiveness that converts any substance into a resource. A resource emerges when the mind evaluates a material in the context of an end use. As society develops, the application of mind continuously increases the productivity of materials, finding new applications for them and more efficient ways to utilize them. The more open and flexible the mind becomes in its outlook, the greater is its creative power. Primitive man found that sand was a useful resource for making bricks. Early craftsmen discovered that the application of heat could convert the same sand into glass. Several millenniums later, we have found that the same sand can be converted into fiber optic cables and silicon chips. Sand remains the same, but its value has been immeasurably enhanced by the application of mind.
Mind, the human being, is the ultimate resource that gives value to all other resources. The capacity of the human mind to acquire knowledge and devise improved technologies is for practical purposes unlimited. The concept that scarce resources impose ultimate limitations on human development needs to be reexamined from this perspective.
The real determinants of human development are human rather than material. Development is a function of human awareness, knowledge, openness to new ideas, human energy, willingness for innovation and risk-taking, capacity of society to organize itself more efficiently, eagerness to acquire new skills, readiness to shed out-moded ideas and behaviors in favor of more creative responses. Development is a function of peace, political and social freedoms, levels of education, levels of social organization, technological innovation and assimilation. At a more fundamental level it is a direct expression of the value the society places on the development of its individual members and on the capacity of those individuals to imagine, aspire and strive for what lies beyond their present level of accomplishment. Development is a function of human energy and attitudes.
There are no inherent limits to any of these resources, other than those imposed by our conceptions and our motivation. In the words of Harlan Cleveland, The only real limits to human development are the limits to our imagination. There is no inherent limit to the capacity of society to increase its knowledge, skill, technology, information, organization, management expertise or social values, therefore there is no inherent limit to its capacity for development and employment generation.
Certainly, society does face real constraints today on its ability to create economic and employment opportunities for all people. But these constraints are not physical. They consist of individual and social attitudes, values and behaviors that can change. They do not lie beyond the reach of public policy and individual initiative. They are consequences of choices made by people in the past and present. Society has the power to alter or reverse these choices at any time in order to achieve more satisfactory results.
The view of human development as a half empty cup or a race half completed has to be discarded. Development is an expansive, self-generating, endless process that creates new needs as rapidly as it fulfills existing ones. Development is a process of creating new ways and styles of life.
At the turn of the 20th Century, electrification, the telephone and the automobile began to transform human society across the globe. Electricity has given rise to the demand for an infinite array of consumer appliances. The automobile has given impetus to retail businesses, manufacturing, hotels, restaurants, tourism and amusement. These innovations have been followed by radio and television entertainment, air travel, college education, the computer and most recently, the internet.
Each of these social innovations in the behavior of individuals and the organization of society creates new opportunities for employment. Is there any sense in which we can say that humanity has reached or is approaching the limits of this process? On the contrary, the further it advances, the greater the possibilities and opportunities it creates.
The growing social concern for those who are left out of the economic system has focused so much attention on the problem of unemployment that we have lost site of the global economys phenomenal success in creating new jobs. UNDP has estimated that the global economy has made greater progress in eradicating poverty in the last five decades than it did in the previous five centuries. This period has been one not only of unprecedented economic growth and national prosperity but also one of unprecedented employment generation. Never before in history has society generated employment opportunities for so many people.
At the turn of the 20th Century, fear of unemployment loomed large in the rapidly industrializing USA. Rising levels of agricultural productivity freed up many from work on farms, yet the introduction of more and more sophisticated manufacturing technology threatened to progressively reduce alternative work opportunities in urban factories. Over the past 100 years, total employment in the USA has risen more than four-fold, from 29 million to over 130 million. This has occurred in spite of the drastic decline in farm employment from 40% to under 3% of the US workforce during this period. Today the employment rate, the percentage of the US population employed, is higher than at any time in the last century. Since 1950, womens participation in the US workforce has risen from 34% to 62%. Worldwide, the world has created more jobs in the last half century than in the previous 400 years.
Although the number of people globally employed in agriculture and manufacturing may be at an all-time high, the percentage of the worlds workforce in these two sectors in gradually declining. Therefore, it is necessary to address the widespread misconception that employment growth during the last century has been primarily generated by manufacturing jobs and that the introduction of more automated manufacturing technologies is rapidly reducing global employment opportunities. It would be much more accurate to characterize the changing pattern of employment brought about by the process of industrialization as a shift from agriculture to services.
In the USA, the percentage of the workforce engaged in manufacturing today is roughly the same as it was in 1850, before the industrial revolution moved into high gear. At its peak in the 1920s and again in the 1970s, a maximum of 23% of the total US workforce was engaged in manufacturing, compared with about 16% today. Far more dramatic has been the growth of the service sector, which replaced agriculture as the largest source of employment around 1900 and now provides nearly 80% of jobs in the USA. From 1975-1996, the total number of jobs in agriculture and manufacturing remained virtually constant, while the total labor force grew by 61%.
Worldwide, the pattern is similar. Between 1980 and 1990, Chinas service sector grew by 13% per annum. Although development is associated in most peoples minds with industrialization, the greatest scope for employment generation has been and will continue to be in the service sector. As of 1990, only 25% of jobs in developing countries were in the service sector compared to 67% in developed nations. This fact has profound implications. The growth of the global service economy is still in its infancy.
The service sector is often derided as a source of low wage, low skill jobs, but the same accusation is equally or more applicable to the physical drudgery, low skill requirements and pitiful wages still often paid by factory sweatshops of all descriptions in every country. Some of the fastest sectors of the service economy include highly skilled, well-paid software engineers and technical support staff, financial analysts, scientific researchers, marketers, logistical experts, educators, and medical practitioners. In fact, even within the manufacturing sector, there has been a marked shift in employment patterns, with fewer people actually performing manual tasks, while many more are performing service activities in engineering, programming, maintenance of sophisticated technology, sales and customer support.
The rapid expansion of services should be recognized and heralded as a social advance far more significant and beneficial than the expansion of manufacturing that has enabled countless millions to advance economically from manual labor in subsistence agriculture to mechanized work in modern factories. The advance from land-based agriculture to machine-based manufacturing resulted in an exponential growth in human productivity, employment opportunities, incomes and living standards. Services represent the next natural step in a progression from economic activities based on humanitys relationship with land and machines, to economic activities based on relationships between people. The service sector is not limited by the physical and technological constraints that impose stiff barriers to both supply and demand in agriculture and manufacturing. In services, humanity itself becomes the resource, the technology and the field for productive activity. Work, employment, money, and wealth are all products of human energy expressed in productive activity. In agriculture, human energy relates to the land. In industry, it relates to mechanical processes developed by mind. In services, that human energy relates to the energy in other people, which is virtually unlimited. As the evolution from agriculture to manufacturing resulted in a vast improvement in productivity and national prosperity, the further evolution to services has and will continue to generate higher levels of productivity, higher living standards and more abundance employment opportunities in every society.
Education is a social service with immense potential for employment generation. Employment in education soared during the 20th Century, but has yet to approach a saturation point in any country. In the USA, the number of teachers has grown five-fold since 1900. Total employment is non-college teaching positions is projected to increase by 29% between 1994 and 2005, 18% for college teaching positions. Much of this growth is driven by the demand for qualitative improvement in education. From 1960 to 1995, the student teacher ratio has dropped from over 26.4 to 17. This compares to ratios as high as 60 or 70 in many developing countries. At the same time the school age population in most developing countries continues to swell due to both population growth and higher enrollment levels. Reducing the teacher student ratio to US levels in these countries could generate 50 to 100 million additional teaching positions worldwide. Surging demand for higher education in developing countries will create millions of additional employment opportunities for college level teaching staff.
Modern medical treatment and health care, a luxury now available to less than a quarter of humanity, are likely to be among the fastest growing fields of activity worldwide in the coming decades. The total number of people employed by the US health care industry nearly doubled between 1980 and 1995, from 5.3 million to 9.3 million workers, and the ratio of nurses to population doubled over the past 25 quarter century. The ratio of physicians to population in Western Europe is roughly 10 times higher than in India, 40 times higher than in Philippines and 50 times higher than in Bangladesh. To raise the density of health care workers in developing countries up to the average level now pertaining among wealthy nations could create as many as of 20 million additional jobs in the health care industry alone. Note that such an accomplishment in both education and health services can be accomplished almost entirely by developing human resources which these countries have in such great abundance.
Nor have the developed countries reached the saturation point for health care facilities. Demographic trends will continue to increase employment in this industry. In the USA, 12.5% of the population is over 65 years of age. By year 2020, the elderly will account for 16.5% of the population, rising further to 20% by 2030. Average life expectancy, now about 79 years for women and 73 for men, will climb to 84 and 80. The number of elderly people over 85 will quadruple, from roughly four million to more than 18 million. Their demand for assisted care lodging, medical services and recreation will be immense, and they will have the financial ability to pay for it. The enormous aging baby boom population will put considerable political pressure on government to meet its health care needs.
Tourism and the hospitality industry are already among the largest sources of global employment, yet the scope for further expansion is enormous. Affluent societies full of retirees will create an enormous number of new jobs in fields that relate to leisure, entertainment and travel. These jobs includehotel, restaurant, resort and club management; travel planning and tour guiding; airline operations; film and music production; golf course design, development and management; live entertainment; and professional sports management. In the USA employment in entertainment and recreation industries has tripled since 1975. Employment in retail food service establishments grew by 50% during the period 1980-1995.
Establishing the net effect of information technology on aggregate employment is difficult for one primary reason: IT is both labor-creating and labor-saving. Although the impact of computerization on employment is complex, empirical evidence indicates that it acts as a catalyst for economic growth and employment that far exceeds any direct elimination of jobs that may result from substitution of machines for people. Computerization acts simultaneously in multiple directions. It increases the productivity of labor, thereby reducing production and delivery costs, which in term translates into lower prices for consumers and higher demand for goods and services. It increases the availability and accuracy of information available to businesses, enabling them to make better, more timely decisions, which again reduces costs, increases profits, and stimulates growth. It also increases the convenience and productivity of consumers by reducing the time required to perform routine tasks such as banking, allowing more time for leisure activities that create employment demand in other industries. While computerization may eliminate direct jobs in the factory, bank, supermarket or travel agency, it also reduces transactions costs and increases the volume of transactions of air travel, tourism, stock market investment, home sales, job placement, etc. A study by the National Research Council in the USA concluded that information technology acts as a technological precondition for growth in many service industries.
The relationship between growth of the service industry and computerization is especially noteworthy. From 1959 to 1994, the service sector grew from 49 to 62 percent of U.S. GDP. The expansion of the service sector has been driven entirely by industries that are often classified as "knowledge" industries finance, insurance, and real estate (FIRE)as well as a number of professional services, such as health and education. The share of GDP accounted for by wholesale and retail trade actually declined from 1959 to 1994, while personal services and transportation and utilities remained essentially unchanged. In contrast, FIRE's share of GDP grew by 4.8 percentage points, while that of professional services increased by 7.1 percentage points. Employment data reflect the same structural shift in the economy as GDP data. From 1960 to 1990, employment in the service sector grew from one-half to two-thirds of total U.S. employment, with growth strongest in producer services (FIRE and professional services) and social services, particularly health care.
In formulating policies and strategies to accelerate development and employment generation, emphasis should be placed on increasing the availability and productivity of the full gamut of resources at our disposal. Today society has at its disposal several very powerful levers for improving the utilization of social resources:
1. Peace: Internal and external social stability are the first and most essential requirements for social development. War is a destroyer of development. The threat of war prevents people from expanding their horizons and investing their energy and resources to build a better future. The end of the Cold War has dramatically reduced the threat of armed international conflicts and the catastrophic consequences of nuclear war, providing a far more stable and secure climate for worldwide economic expansion. A commitment by the world community to the complete eradication of regional conflicts and civil wars will provide a stable basis for accelerated development of all nations. ICPFs proposal for establishment of a global security system backed by a world army can free up at least $400 billion annually for development-oriented public investment and ensure a secure foundation for accelerated growth and employment generation.
2. Democracy: As peace provides a secure external environment for international development, democracy provides a stable and conducive environment within countries for more rapid social progress. Democracy raises human aspirations. It encourages individuals to take active initiative for their own advancement. It facilitates freer and wider social interactions. It releases greater social energy. It vastly increases the dissemination of information and the multiplication of new organizations. As the transition from monarchy to democracy was a catalyst for rapid economic advancement of Western countries over the past three centuries, the spread of democratic institutions today opens up greater possibilities for global economic expansion. Many countries have fully extended political and social freedoms in principal, but no country as yet fully provides them to all its citizens in practice.
3. Education: The capacity to utilize the opportunities afforded by a peaceful and free social environment depends directly on the knowledge and skills of the workforce, which in turn are a direct function of levels of education. Educational levels around the world continue to rise. The aspiration for education has become an urgent demand in country after country. Yet, even today universal primary education is far from a reality in many countries. For several decades, rapid expansion of college enrollment spewed out millions of new graduates with aspirations for higher levels of achievement but few opportunities or real qualifications to fulfill those aspirations. The very rapid spread of computer and internet technology is now opening up new employment opportunities by the millions for those who possess a quality higher education. Every effort to expand the reach and upgrade the quality of education at all levels will pay rich dividends in the changing international economic climate.
4. Velocity of Social Transactions: Development is a function of the velocity of social transactions. The speed of movement of information, ideas, decisions, technology, people, goods and money has significant impact on the productivity of the society and its further advancement. The shrinking of the world through better transportation and communication opens up commercial opportunities inconceivable just a few years ago. Over the past two decades the volume of international travelers, freight, telephone and other forms of electronic communication has increased by more than an order of magnitude. An additional 324 million telephone lines have been installed worldwide since 1990, of which 25% were in China. With the advent of cellular telephone technology, progress in this field can be dramatically accelerated. Since 1995, China has increased the proportion of its citizens with telephones from 1% to 10% of the population. India quadrupled its total lines during this period. Between 1980 and 1994, overseas telephone traffic to and from the USA increased from 200 million to 3.4 billion calls. New technologies such as cellular phones have dramatically reduced the cost of expanding the communications infrastructure. The meteoric growth of the Internet, from a few thousand to more than 80 million connections in 15 years, provides instantaneous low cost access to global sources of information and commercial markets. Electronic mail, which one study projects will be employed by as many as one billion people worldwide in 2002, has drastically cut the cost and increased the speed of written communications. The speed of technology diffusion is also accelerating. The Xerox machine was not introduced into India until the late 1970s, more than 15 years after its use became widespread in the USA. Today, new versions of the latest computer hardware and software are often introduced simultaneously in USA, Europe, India and China. Every measure that increases the volume and speed of knowledge, information, people, goods, money and technology is a potential catalyst of the development process.
5. Technology Application: The rate of technological innovation and diffusion is one thing, the extent of technology application is quite another. Technological development far outpaces the extent of technology application, even in the most advanced societies. Adoption and full utilization of already proven technologies can dramatically elevate performance in every country and in every field. To cite a single example, the average yield of tomatoes in India is 10 tons per acre, yet some advanced farmers achieve yields of 20 tons or more. The average yield of tomato in California is 35 tons in California, but Californias leading tomato farmers routinely obtain average yields of 55 tons or more by applying advanced systems for micro-nutrient management applicable to all crops and climates. Applying even more sophisticated and capital intensive technology, Israeli farmers achieve yields of 250 tons or more of tomato per acre. This wide variation in the application of technology within and between countries is nothing new. But it is a factor that is at least partially responsive to social policies.
Social organization: People the world
over are fascinated by new technology and eager to embrace it as a means for economic
advancement. Yet, organizational innovation has contributed at least as much as
technological innovation to the astonishing progress of society in the 20th
Century. Each significant developmental advance
leads to the emergence of a host of new organizations designed to support it and puts
pressure on existing organizations to elevate their functioning to meet the higher demands
of the new phase.
These are but a few of the major levers available for accelerating the development process.
Nor is the possibility of full employment limited to theoretical speculations. During the 1950s and 1960s the leading industrialized countries of the world not only achieved full employment but even exceeded it, creating strong demand for import of workers from abroad. In Germany and France, nearly 10% of the labor force consisted of foreign workers.  During the 1980s and early 1990s, the Newly Industrializing Economies (NIEs) Hong Kong, South Korea, Singapore and Taiwan-China achieved full employment and experienced acute labor shortages. Prior to the Asian financial crisis which began in mid-1997, Malaysia, Thailand and Indonesia were rapidly approaching a similar status. That crisis did set back economic growth and employment in all these countries, yet their faster than expected recovery and return to high growth rates suggests that the earlier performance can be repeated.
While the Chinese economy still remains very far from full
employment, its phenomenal progress on employment over the past two decades is an index of
what other countries can strive to achieve. According to ILO estimates, from 1987 to 1997
China created more than 160 million additional employment opportunities.
The second major goal of the Summit should be to generate awareness of the factors that make the present decade highly conducive for an initiative to eradicate youth unemployment.
Hundreds of millions of new jobs can be created by commercialization of agriculture and expansion of agri-businesses in developing countries. At a time when employment in agriculture has declined to just 7% of the workforce in developed nations compared to 61% in developing countries, many will question the wisdom of trying to create more jobs in this sector. But a clearer understanding of the stages of development that most economically-advanced countries have passed through in the process of industrializing and modernizing will justify an agriculture-led strategy.
In his study to determine why the Industrial Revolution took off in England before it occurred in other European countries, Nobel laureate Arthur Lewis observed that industrialization in England was the result of a prior revolution in British agriculture. Rising levels of farm productivity and farm income generated surplus food and rural purchasing power. This freed up a large portion of the rural workforce to leave employment in agriculture. Increasing rural wealth also created greater demand for manufactured goods.
The same process occurred during the mid 20th Century in the more advanced developing nations of Asia such as Taiwan and South Korea. Dramatic increases in agricultural productivity led to rising incomes and investment in manufacturing. In regions of India where the Green Revolution has been most successful, agricultural development has been followed by rapid industrial development as well.
Many developing countries have not yet completed the agricultural revolution that forms the basis for rapid industrialization. Even in countries such as India, which has quadrupled food grain production since 1965, development of untapped agricultural potential can be a powerful engine for employment generation. A study entitled Prosperity 2000 by the International Commission on Peace and Food estimated that India could generate 100 million additional jobs within 10 years by a full exploitation of its agricultural potential. The key to employment generation through agriculture is the multiplier effect that higher farm production and income have on this and other sectors of the economy. The Commission found that the 100 million jobs can be created by a combination of increased on-farm employment, employment in down-stream agro-industrial and business activities, and employment in other sectors of the economy created by the increased purchasing power of farmers. The relatively low nutritional levels in countries such as India are another key element of the strategy. The higher rural purchasing power generated by raising farm production, employment and incomes creates its own market for much of the additional crops and processed goods produced.
The agricultural potential in developing countries has several major components. First, there is the potential for raising agricultural productivity. Even after Indias highly successful Green Revolution has popularized hybrid wheat, rice and maize production, yields of most major crops are still far below world averages, let alone the yields achieved in countries with the highest productivity. Table 1 compares the average yield on a range of major crops in the USA and India. Yields on some crops comparable to those in the USA have already been achieved by private farmers under Indian conditions, but remain isolated achievements. Improving cultivation practices to raise crop yields in Indias labor intensive farm economy will result in a nearly proportionate increase in labor input for planting, harvesting, processing and transport of crops. It will also increase demand for labor for processing, handling and distribution.
Table 1: Crop Yields in USA and India (kg per hectare) 
Higher employment can also be created in agriculture by a shift from traditional food crops such as wheat and rice to commercial crops such as sugar, cotton, vegetables, and flowers, which require higher labor input and generate far higher incomes per unit of land cultivated, and by promotion of downstream processing industries, agri-service and food distribution businesses linked to these commercial crops. Cotton, for example, creates employment in spinning mills, textile factories, and garment production units.
A study of Pune District in Maharashtra, India by the Agricultural Finance Corporation strongly supports the Commissions findings. The study concluded that an additional 750,000 jobs could be created in this single district by an agriculture-led strategy. If extrapolated over Indias nearly 400 districts, the total employment potential would far exceed ICPFs estimate of 100 million jobs. Since 1990, many of the ICPF strategies have been successfully implemented in Pune. The area under horticulture crops in the district has been expanded from 125,000 to 1.5 million acres, which is 20% of the increase projected in ICPFs report for the whole of India.
Additional employment generation in agriculture can also be a highly effective strategy in many other developing countries with relatively low crop productivity and agro-industrial development. If widely applied, an agriculture-led growth strategy could generate hundreds of millions of additional jobs in developing countries on the farm and in agri-businesses and in other sectors of the economy that benefit from higher rural purchasing power.
Although concern over rising levels of unemployment loomed large in the minds of Western economists through much of the 1990s, demographic trends indicate that in future developed nations will face a shortage of labor, rather than a shortage of job opportunities. Worldwide the rate of population growth is ebbing. Although by the year 2050, there likely will be 9 billion people on the planet, demographers predict the population will level off at this point, perhaps even decline. In the last few years, worldwide population growth rates and fertility have dropped faster than anyone projected.
For all intents and purposes, the developed world has stopped growing. In North America, Europe and Japan birthrates have been steadily declining for the past decade; in some countries, birthrates are too low to even sustain current population size. Family size in Mexico has dropped from seven children to just 2.5, below the U.S. average of 2.71. In Italy and Spain, women now average 1.17 babies. In 1997, Italy became the first nation in history to have more people over the age of 60 than under age 20. The Italian population is actually shrinking. Greece, Spain, France and Germany will soon face the same situation. Today, the fertility rate exceeds the replacement rate in only three of the 23 richest countries in the world.
A UN study released in March 2000 estimates that the 15 nation European Community would have to accept 150 million new immigrants over the next 25 years in order to maintain present levels of working and tax-paying population. Though immigration on such a massive scale is unlikely, this trend will soon eradicate unemployment within developed nations and generate increasing opportunities for employment growth among developing nations.
Despite surging immigration, the labor force in the United States, Europe and Canada is not growing quickly enough to meet demand for workers, a trend line that will continue well into the new millennium. As US baby boomers retire or reduce their work hours, there will not be enough younger workers to replace them. By 2013, labor-force growth in the United States will be zero. These demographic trends are already resulting in labor shortages in a number of developed countries.
The current concern in Japan regarding rising levels of unemployment is one of the ironies of the global employment context resulting from a very temporary, short term restructuring of the Japanese political and economic system that is now underway. In the mid-term, government projections indicate that Japan will face acute labor shortages. As a consequence of an aging population and declining birth rate, the United Nations estimates that Japan would need to admit 600,000 immigrants annually for the next 50 years in order to maintain the size of its working population at the 1995 level. In the absence of increased immigration, the size of the workforce would decline from the current level of 127 million to 105 million by 2050, placing an inordinate burden on a shrinking workforce to support an increasing population of retirees. The aging of the Japanese population will create increasing opportunities for younger nations to create jobs to fill this shortage of workers.
Preparatory to the Summit, research should be undertaken to quantify the impact of demographic changes on the complexion of the global workforce over the next half century. This will help highlight the underlying social forces that will generate new opportunities in the coming decades.
In the early 1990s, there was a widespread belief in most industrial nations that the increased deployment of technology would lead to a prolonged and, perhaps, permanent era of jobless growth, an increasing shortage of employment opportunities, and even what was metaphorically termed by one author the end of work. In retrospect, it is clear that the rise in unemployment rates at that time was the temporary result of a combination of transient factors. The end of the Cold War, which led to a 35% reduction in global military spending, brought on an economic recession as large, defense-related industries struggled to refocus their businesses on civilian markets. This was coupled with a large increase in the number of women entering the workforce, higher rates of immigration from developing countries, and downsizing of major corporations.
There is now ample evidence to conclude that what first appeared to be a long-term or even permanent trend among industrialized countries was actually a short-term adjustment which is already well on its way to reversing itself. In fact, present indication suggest that the long-term prognosis is for an increasing shortage of workers in the industrialized world.
With unemployment rates at a 30-year low in the USA, many jobs remain unfilled, particularly those requiring specific skills. The unemployment rate for engineers is 1.6 percent, for computer programmers 1.4 percent, and for computer scientists 1.2 percent. Recruiting workers is difficult, but retaining them is becoming an even greater challenge in Europe and the United States.
A 1999 study conducted for the National Tooling & Machining Association (NTMA) in the USA, a group of 2500 manufacturing companies, found that the No. 1 problem faced by American manufacturing companies was the growing shortage of skilled workers to fill jobs in industry. Although skilled toolmakers and machinists commonly earn upwards of $40,000 to 50,000 a year, many of these companies are being forced to make huge investments in automated equipment or to subcontract work to overseas firms due to the scarcity of job applicants. High skill jobs are not the only ones facing labor shortages in the USA. The Associated Builders and Contractors estimates that it would take 240,000 workers to ease the current skilled-labor shortage in the construction industry.
Although labor and, especially, skilled labor shortages are more prominent in the most developed nations, it would be a mistake to assume that they do not exist in developing countries as well. The explosive growth of population in these countries has no doubt resulted in an imbalance between population and job growth, but here too there are signs that the gap is narrowing and labor shortages have emerged in specific regions of many countries. This is even the case is some relatively low income developing countries such as India in states such as Punjab and Maharashtra where commercial agriculture has advanced rapidly. Farmers and businesses in these and other areas report an acute shortage of both farm and factory workers.
Surveys should be conducted preparatory to the Summit to document the skill shortages in different countries and sectors of the economy, so that specific strategies can be formulated to fill these gaps.
The best documented and most celebrated example of the emerging skill shortage has been in fields related to information technology. McKinsey & Company, one the worlds largest management consulting firms, estimates that global demand for information technology will exceed $1.9 trillion by 2008, including $1 trillion for I.T. services, $700 billion for software products, and $142 billion for I.T.-enabled services. For the past two decades, worldwide growth of the computer industry has outstripped even the very rapid increase in the availability of trained workers. Annual studies in the USA routinely assess the shortfall of information technology professionals at upwards of 200,000. Between escalating salaries and lost business opportunities, the labor shortage in Silicon Valley alone is costing technology companies an estimated $4 billion a year. Similar shortages of high tech workers exist in most industrialized nations.
In one of the largest, most comprehensive studies yet undertaken, the Information Technology Association of America (ITAA) examined demand over the boarder category of information technology workers and found that the IT workforce and the current IT skill shortage are both far larger than previously estimated. ITAA estimates that the US currently employs 10 million information technology workers and will create 1.6 million new positions in this category during year 2000 alone. Of these 1.6 million new jobs, approximately 800,000 or 50% will remain unfilled due to the growing shortage of skilled workers. The greatest need for IT workers is in the largest segment of the economy--smaller non-IT firms. Greatest demand is for people with both technical and non-technical skills. By one estimate the I.T. skill shortage in Europe is about 20% lower than in the USA.
The achievement of Indias software industry serves as one index of this growing domestic shortage in developed nations. Indias software industry, which exports software services primarily to the USA, Western Europe and Japan, has increased from a mere $10 million in 1984 to $8 billion in 1999. A study by McKinsey forecasts that India's software industry could generate $87 billion in revenues and employ 2.2 million people before the end of this decade.
For many years, Western nations responded to the increasing shortage of high technology workers by increasing levels of immigration and raising quotas for the temporary employment of skilled foreign workers. Over the past five years, the USA increased the quota of new H-1 visas allotted annually from 65,000 to 115,000. After doubling the allotment, the entire quota for year 2000 was filled within the first half of the year. Businesses are requesting that the annual quota be increased to 200,000 and a Congressional Committee has recommended abolishing the quota entirely for the next three years. Many of these temporary workers eventually obtain green cards for permanent residence in the USA. One result of this trend is an astonishingly large number of immigrants providing professional services. By one estimate, 38% of US doctors and 12% of all US scientists are of Indian origin.
High domestic costs and public sensitivity in developed nations regarding the increased immigration has generated another trend that can dramatically expand employment generation in developing countries. Increasingly, companies in developed countries are looking to outsource service sector jobs to workers in developing countries. The prospects in this field are not only at the high end of the technology spectrum where a limited number of highly educated software engineers can earn salaries nearly equivalent to levels pertaining the West. Exciting opportunities are opening up across a broad spectrum of Information Technology-enabled services, cross-border businesses that utilize information technology to provide services to customers around the world.
This field is not entirely new. For years, several leading US banks and insurance companies have been outsourcing and out-locating human resources, customer service, telemarketing, back office and administrative operations to firms in the Caribbean and Ireland. The explosive growth of the Internet has drastically reduced the time, cost and effort required to do so, thereby opening up this field to many more companies and to countries around the world.
The category of I.T. enabled services includes a range of rapidly emerging opportunities:
· Call Centers -- State-of-the-art telecommunications technology makes it possible to provide 24 hour telephone contact for telemarketing and customer support from facilities located anywhere in the world. US-based Convergys provides billing and customer care services to other companies through 30 call centers employing 30,000 people. GE Capital, a division of the giant American conglomerate General Electric, operates a facility near New Delhi where Indian graduates place telephone calls to GEs credit card customers in the USA.
· Medical Transcription Pressure to reduce the cost of medical care in the USA have created an overseas market for transcription services. Digital recordings of physicians patient case notes are sent over the Internet to companies in India and the Philippines, where the recordings are processed into text form and sent back electronically to update medical records. During 1999-2000 alone, approximately 70 new companies were established in India to provide this service.
· Back Office Operations & Accounting Services All types of data entry, analysis and processing are now being outsourced to developing countries by airlines, book and magazine publishers, universities and other institutions. British Airways and Singapore Airways are the first of several airlines planning to process ticket information and frequent flyer records at facilities in India. America On-Line now has 600 Filipino customer-service employees who answer 10,000-12,000 e-mail technical and billing enquiries a day, most of them from AOLs U.S. customers.
· Insurance Claims Processing -- Large insurance companies, which receive millions of claims that need to be processed according to clearly defined rules, are also outsourcing this work to college graduates and medical professions in countries with lower labor costs.
· Technical Support The large US engineering firm, Bechtel, operates an engineering design center in Bangalore which employs 500 people to support the firms customers worldwide over telecom and data networks.
· Legal Research -- Legal firms in the West have started to outsource legal research to organizations that have a large English-speaking, lower-priced workforce of trained lawyers. This business includes creation of databases of existing legal records, indexes on cases, tracking new documents and incorporation into the database.
· Content Development/Animation Computer animation is expected to be a $35 billion global industry by 2001. The development of computerized animation systems has dramatically reduced the cost of creating animated video material for full-length motion pictures, medical and other types of training, educational documentaries and CDs, games, and advertisements. The high labor content involved in using the software provides ample opportunities for developing countries.
· Payroll & Human Resources Payroll processing and other human resource functions are also being out-located. The large oil company, Caltex, operates from Manila a shared human resource center for its offices in five regional countries.
The outsourcing and out-location of service sector jobs is still in its infancy, so it is difficult to project the full magnitude of the potential. However, it can be reasoned that for every new job created in the software industry, 50 or 100 jobs can be created by application of information technology in other fields. If this is the case, this single trend could generate fresh employment opportunities for as many as 100 million people worldwide during the coming decade.
At each stage of social development, different fields of activity generate the impetus for further growth. The most successful employment strategies will be those that accelerate growth of fields which are already expanding rapidly. For instance, although the entire service sector category is growing rapidly in developed nations, certain service activities are leading the charge. Emphasis on removing obstacles and stimulating faster expansion in these fields will be most effective in stimulating employment growth.
Table 2 shows the growth rates for the fastest growing service industries in the USA over the past quarter century. Table 3 gives the projected growth rates of specific occupations in the USA from 1994 to 2005.
Lists of fast growing sectors and occupations should be compiled for every country, so that educational and training courses can be refocused on those with the largest potential, not only within the country but in other countries that can be serviced from overseas.
Table 3: Fastest growing occupations in US
Although poverty has plagued large sections of humanity throughout history, the problem of unemployment is a relatively recent phenomenon. Prior to the industrial revolution and development of the factory system, relatively few people held jobs. For the vast majority, work meant livelihood rather than employment. That livelihood consisted of the multiple tasks individuals performed, whether for themselves or for others, that supported a subsistence-level existence for their families.
The introduction of the factory system transformed our concept of work from livelihood to employment or job. The institutionalization of work as jobs meant that most people became fully dependent on one external source of employment for their entire livelihood. It forged a division between the role of men as paid career employees and women as unpaid housewives. The extension of this same model to all types of white collar work raised enormously the cost of expanding the workforce, since each additional worker required a place and facilities to work outside the home. In recent years the high economic and social costs of this model have created strong pressure on business to reduce the number of institutional jobs.
This has partly been achieved by automation of work. But more significantly, the advent of advanced communication technology is leading to a reverse trend from institutionalized jobs back to personal livelihood. Technology and changing organizational cultures are enabling more people to work wherever they choose to live. In the USA, a rapidly growing number of people are engaged in telecommuting, employment in the home linked to the institutional workplace over telephone and internet networks.
A study by AT&T estimates that 19.6 million Americans carry on paid work from their home at least one day per month, compared with 3.4 million in 1990. A report by FIND/SVP estimates that three-quarters of these US telecommuters utilize a computer. The average telecommuter is over 40 years of age, earns $51,000 a year and works about 19 hours a week from the house. Seventy-six percent of them are married and 46% have children. Other studies indicate that this trend is accelerating rapidly and could effect a large portion of the US population. The Gartner Group predicts that there will be 37 million US telecommuters by 2003. Telecommuting is also growing in many areas of Europe, Canada and the Pacific Rim.
Within the next decade, it is likely that more than half the US workforce will be virtual, telecommuting from home or regional office co-ops shared by several companies. Virtual partnerships between independent contractors also will flourish, as sophisticated telecommunications capabilities enable people to link-up with anyone, anywhere. As this trend accelerates, jobs will follow individuals, not the other way around. Since telecommuting can be done from virtually any place in the world over the internet, this trend will open up vast opportunities for creation of additional service sector jobs in developing countries.
Far-sighted thinkers such as Harlan Cleveland have been stating for decades that job or employment-based societies will eventually give place to societies in which individuals are politically, socially and economically free to choose personal livelihoods suited to their own capacities and interests. Formal jobs as we know them will give way to more flexible work structures. In other words, the evolution of society from individual livelihood to organized employment is coming back a full turn of the wheel, or rather of the spiral; for it is not coming back to where it started but rather to a far higher evolutionary position in which individuals will have maximum security and maximum freedom. An inevitable stage in the transition to this utopian-sounding achievement is a period in which society generates far more jobs than there are people to fill them. When that occurs, the status and function of job will give way to a more flexible and humane organization of work. Trends now emerging on the global horizon suggest that the time for this accomplishment may be very much sooner than anyone presently believes possible.
Having established the theoretical possibility of creating 500 million jobs and having identified some of the major trends and opportunities that support accomplishment of this goal at the present time, the Summit must turn to the task of identifying specific recommendations for implementation by participating countries and agencies. In formulating recommendations several criteria should be kept in mind.
In formulating recommendations to achieve the global goal of creating 500 million additional employment opportunities, the Summit will have to address a very wide range of initial conditions in countries at different stages of development and with different historic, geographic, demographic and political profiles. One possible approach is to prepare sets of recommendations appropriate for different groups of countriesdeveloped nations, transition economies, newly industrialized nations and other developing countries. Of course, country-to-country differences would still require further differentiation: even between the relatively homogeneous European Community, policies and performance vary to widely to cover all cases with a common formula.
This paper does not take this approach. Instead it focuses on common underlying factors or principles that influence employment generation in every country, regardless of its level of development and specific local context. It points to basic social forces that can be activated by every country to accelerate the process of development and employment generation. It then illustrates how some of these principles can be applied in different contexts. If the Summit were to follow this approach, the preparatory task would be to formulate a complete list of such strategies, illustrate how specific countries are currently performing, and assess the potential benefits of raising performance on each strategy. It could further develop the specificity of the recommendations by examining the application of each principle to different levels of development and then leave it to each individual country to identify the strategies most appropriate for its context and the level of implementation possible in the local context. In essence, the Summit would provide a set of tools that policy-makers and other agencies can wield to achieve full employment.
The Summit will be most effective if it eschews out-dated notions of development strategy that have proven ineffective in the past. The following principles can serve as useful guidelines:
1. Welfare and public works programs may serve to alleviate the short-term distress resulting from inadequate job opportunities, but cannot serve as an effective basis for permanent solutions.
2. Foreign Aid is not a viable recipe for meeting the worlds employment needs. Emphasis on aid and charity should be replaced by emphasis on investment, empowerment, local initiative and full utilization of all available social resources within each society.
3. Subsidies may be effectively employed under some circumstances as incentives to promote the introduction and spread of new activities in society, but prolonged subsidization of out-dated modes of production or employment only postpones the inevitable decline of these activities and diverts investment of scarce resources in more promising fields.
These recommendations will fall under a variety of different headings:
1. Broad strategies that will accelerate economic development, thereby increasing the rate of employment generation.
2. Specific strategies to accelerate development and employment in specific regions, countries and sectors of the economy.
3. Public policy measures that will shift the focus of regulations to increase their positive and reduce their negative impact on employment.
4. Government programs that will act as catalysts to accelerate real and permanent job creation in the economy, rather than short term programs with only temporary impact.
This paper illustrates of few representative types of recommendations under each of these headings.
In discussing a conceptual framework for employment generation, we said that employment is a natural outcome of social development and that measures which accelerate the process of social development can generate large numbers of permanent new jobs. Global experience over the past five decades has demonstrated the positive contribution of a wide range of factors that increase the velocity of social transactions and the rate of social development, including:
1. Peace: Strategies to promote global security, regional and domestic stability.
2. Democracy: Strategies to increase the practical expressions of political, economic and social freedom in society.
3. Education: Strategies to increase the quantity, quality, ease of access and relevance of general and vocational, formal and non-formal, public and private education at all levels of society in all countries.
4. Training: Strategies to identify skill gaps and impart training to expand the availability and upgrade the quality of employable skills, with special focus on occupations where demand is growing and shortages are projected.
5. Information: Strategies to increase access to and the quality of all types of information relating to human rights, governmental regulations and programs, business opportunities, markets and prices, technological advances and applications, financial resources, non-governmental activities, etc.
6. Organization: Strategies to upgrade the productive capacity of all aspects of the social organization in order to support more rapid development and improve the quality of life.
7. Telecommunications: Strategies to increase access to and reduce the cost of telephone and data communications, domestically and internationally, which serve as essential infrastructure for participation in the emerging global information-based economy.
8. Transportation: Strategies to increase the speed and quality and reduce the cost of all types of transportation for people and goods, especially road transport in rural areas.
9. Technology diffusion: Strategies to increase the dissemination and adoption of improved technologies to expand the range of economic activities and enhance their quality, productivity and profitability.
10. Investment & Credit: Strategies that increase access to capital for investment in productive activities at all levels and in all fields of economic activity, including micro-credit, hire purchase, leasing, mortgage, and gold deposit schemes.
The ten categories listed above are representative rather than exhaustive. Each encompasses a broad field in itself. Many are the subject of intensive study and initiative by specialized agencies. A selective effort should be made to identify and concentrate on specific recommendations under these headings that will have maximum impact on youth employment. Several illustrative examples are given below:
Improve quality of pre-school & primary education: The
demand for better quality early childhood education is soaring in both developing and
developed countries, because it is recognized as so important for later academic and
career achievement and because more and more women are becoming working mothers. An
experimental program for early childhood education in South India has demonstrated that
average children can progress academically at least two or three times faster than the
norm prevalent in public schools when student-teacher ratios are reduced from current
levels of 1-60 down to 1-20 or below, the norm in many developed countries. The preschool
student-teacher ratio is currently 3.4 times higher in East Asia and 4.8 times higher in
South Asia than it is in Europe. For primary school, the level in Asia is 50% higher than
in Europe and in Africa it is double the European level.
Raise minimum standards for education: Most countries have
established mandatory minimum levels of education for their citizens, though the required
level and degree of enforcement vary widely. Among African countries, the range is 4 to 10
years of compulsory education with an average of 7 years. It is eight years in India and
nine in China. By comparison, the compulsory minimum in among developed nations ranges
from 10 years in the USA and 11 in UK to 12 in Belgium and Germany and 13 in Netherlands.
This partially accounts for the very low level of secondary school enrollment in
Sub-Saharan Africa (26%) and South Asia (45%) compared with the world as a whole (60%) and
developed countries (100%).
§ Funding further investment in education: While every country will concede the value of upgrading the quality and quantity of education, not all will agree that they have the financial capacity to do so. Public investment in education varies widely from country to country. Among the advanced industrial countries, it ranges from a low of under 4% up to a high of nearly 7% of GDP. Among developing countries, the range is from under 2% to a high of over 8%. For most countries in both categories, there is need and strong justification for increasing total investment in education. For many of these countries, the best trade off will be to redirect resources from defense spending to education. In addition to increasing total allocations for education, there is also scope for increasing utilization of allocated funds in some countries. At the end of every fiscal year, education departments in India scramble to find ways to spend allocated funds that have not been utilized and will otherwise have to be returned to the treasury. Policy can be formulated to channel all of these unutilized funds into pre-approved programs designed to upgrade quality of education, such as investment in computers.
§ Entrepreneurial opportunities: Over the past three years, the Internet has become an important means for recruitment of new employees. By the end of 1999, 10% of jobs in the USA were being filled by means of on-line recruitment. The internet is a cost-effective system for enabling employers and job seekers to match needs and capabilities across long distances. A similar system can be developed to promote entrepreneurial activities by young adults. The system should provide reliable information on attractive business opportunities together with information on the market, technology, financial, human and organizational resources needed for success. Databases can be compiled at the national level with the participation of business associations, universities and government agencies. Increasing the rate of new business start-ups can create tens of millions of additional jobs.
§ Information broadcasting: In most developing countries, information about development and employment opportunities spreads slowly and inaccurately to other people and regions for which it would be very meaningful. Cashew farmers in one Indian village obtain yields ten times higher than farmers in villages just ten miles away, because reliable information about their highly successful cultivation practices never spreads beyond the local area. Similar examples can be drawn from every field of economic activity. Government extension services, university outreach programs, business associations and NGOs fill in the information gap to a limited extent, but leave many important types of commercially useful information and many geographic poorly covered. Special agencies can be established to conduct studies to identify these information gaps and unpublicized success stories, to formulate reliable information packages and to project them to the population through a variety of mechanisms.
§ Innovate Organizationally: Creation of new types of social systems and organizations can create markets and jobs in many ways. Significant improvements in the competitiveness and growth of businesses in developing countries can be achieved by raising organizational efficiency and dynamism through better internal management practices and better commercial systems in the marketplace. The establishment of manned pay telephone booths in India during the 1980s is an example of a highly successful organizational innovation that has generated self-employment for tens of thousands of people and made telephone services readily available to the masses that previously lacked access. The same system has subsequently been expanded to provide fax and internet services. A comprehensive study of successful social systems and institutions in both developing and developed countries should be conducted to identify those that can be transferred and adapted to local conditions in order to accelerate development in each field of activity.
§ Computerization: The importance of computer technology for communication, education and commercial activities is now widely recognized, resulting in a their rapid proliferation in business, government, schools and homes. Computers provide access to enormous amounts of information and dramatically increase individual productivity. In earlier decades, there was widespread concern that the spread of computers would significantly, perhaps even drastically, reduce employment opportunities. Recent experience indicates that just the opposite is true. While the introduction of computerized robots in a factory or ATM machines outside a bank, may in fact eliminate jobs that were previously carried out by people, this direct impact seems to be more than offset by the catalytic effect of computerization, enhancing the speed and increasing effectiveness of any activity and, thereby, promoting both quantitative expansion and qualitative development of the activity. In this sense, computerization is a highly effective means for increasing the velocity of social transactions and the rate of employment generation in society. Studies of the US automobile industry have shown that the impact of automobile technology on employment extend far beyond direct employment in car manufacturing companies. The industry has contributed to tremendous expansion of virtually every other industry, including tourism, hotels, restaurants, amusement parks, whole and retail trade, manufacturing and agriculture. Thus, about 9 percent of the entire US workforce is employed in occupations directly related to automotive manufacture, sales and services, road construction and maintenance, and transport of freight and passengers. While much more research is needed to accurately assess the multiplier effect of computerization on employment in the wider economy, efforts to accelerate the proliferation of this technology can make a significant contribution to employment generation.
§ Complementary or local currencies: When we hear the word currency, almost all of us think of the forms of money created by national governments or central banks. However, there are many other types of currency in circulation that serve a similar purpose yet are created by local communities, both public and private, rather than central governments. By recent count there were nearly 3000 such currencies being utilized in countries around the world. We refer to them as complementary currencies because in most instances they serve a complementary rather than competitive function alongside the national currency, filling in where the national monetary system is not fully effective. Every society possesses a wide range of resources that are not fully utilized under normal conditions because there is no demand for these resources in terms of the national currency, i.e. no one has the money to pay for them. Complementary currencies give value to resources that the national money system does not assign value to, such as the knowledge and skill of most people in retirement. It is an extension of the monetary system that can tap unutilized social resources and has the potential to grow to 10 or 20% of the total present money supply.
There are over 2,700 complementary currency systems operational in the world today, most of which have sprung up to generate local work in high unemployment areas. In the US, 39 communities have followed Ithaca, NY, in creating their own paper currency, redeemable only within the community. More than 400 communities in the UK have started their own electronic complementary currency system called the Local Exchange Trading System (LETS). Similarly, in Germany they are called Tauschring, in France Grains de Sel, and several hundred such grassroots projects are now operational in these countries as well. All of these systems will be explained in detail later. These initiatives are often treated as marginal curiosities by mainstream media and academic circles. However, in New Zealand, Australia, Scotland and 30 different US states, regional governments have been funding the start-up of such systems because they have proven effective in solving local employment problems. In New Zealand, the Central Bank has discovered that complementary currencies actually help to control the overall inflation in the national currency.
Micro-financing: Micro finance agencies have proven
extremely effective in extending credit to the poor, especially to women, for
self-employment and commercial activities. Survey responses from 925 out of the more than
1500 micro-credit agencies operating around the world in 1999 revealed that they are
currently serving more than 22 million client families worldwide, of which 95% are in
developing countries. More than 50% of these clients are from families living below the
poverty line. Growth of micro-financing has been very rapid over the past two decades. The
agencies surveyed project that a more than 300% growth in terms of families being served
by year 2005. Intensive efforts should be taken to extend successful practices in
micro-financing, not only in developing countries but among poorer communities in
developed countries as well.
§ Bank financing: In most developing countries, the majority of employment opportunities are generated in the informal sector, but commercial banks are poorly equipped and disinclined to lend to small clients who lack immovable assets to secure their loans. Non-banking financial institutions (NBFIs) providing consumer credit and industrial leasing may fill this void to some extent through their greater capacity to effectively deal with small borrowers, but often the NBFIs also have restricted access to bank finance. In India, for example, 60% of national savings is generated by businesses in the informal sector, including hotels, restaurants, wholesale and retail businesses, yet they have very little access to bank funds. Central Bank restrictions also limit commercial bank lending to NBFIs. Thus, growth of employment in the informal sector is limited by lack of access to institutional resources. Stricter government regulation of the NBFIs would enable banks to more accurately access their credit-worthiness, increasing their access to funds and their role as an effective intermediary between the banks and the informal sector.
§ Analyze job impact of government policies: Almost every government policy has a direct or indirect impact on employment. Often the relationship is not recognized or intended. An analysis of the impact of major public policies on employment at the local, state and national level can result in avoidance or removal of significant legislative and administrative road-blocks to job growth. As environmental impact assessments are now routinely required before new policies are put into effect, governments should require employment impact assessments for new policy initiatives prior to adoption. The purpose of these assessments should be to reduce government restrictions on job creation, rather than to impose greater restrictions in order to protect existing jobs, an approach that retards social development by artificially preserving the status quo.
§ Voluntary part-timism: Increasing the flexibility of working hours will serve the interests of both businesses and workers. Encouraging voluntary part-timism by removing the artificial barriers to job-sharing created by employment laws, social security provisions, administrative procedures and trade unions would raise the morale and productivity of those who prefer to work less, while creating openings for many who are now without jobs. Proportionately reducing working hours and salaries can spread the existing work more evenly over more people. Evidence suggests that reduced working time can raise productivity significantly. Work or job sharing is not an ultimate answer in itself, but it can have beneficial short term impact, allowing time for longer term measures to take effect. As a minimum, governments should remove the artificial barriers to job-sharing created by employment laws, administrative procedures and trade unions. Social security tax systems should also be modified to remove the in-built bias that increases the taxes of those who hold multiple, part-time jobs, rather than one full-time job. Such constraints limit part-time jobs to around 10 percent of the total in Belgium, France, Italy and Spain compared to around 25 percent in Britain and Denmark.
§ Modify tax policies: The present income and payroll tax system in most countries raises the real cost of labor relative to capital, and thereby discourages job creation. It heavily taxes people for working, which indirectly raises the cost of labor and reduces the number of jobs. At the same time the system provides investment and depreciation incentives that encourage industry to shift from labor intensive to capital intensive modes of production. Much of the shift from labor to capital may not be economically justified were it not for the in-built bias in this system. Tariff policies also influence employment levels, both domestically and internationally. Low levels of taxation on the depletion of non-renewable energy resources in countries such as USA is another distorting influence that makes machine-driven activity more cost effective than it would otherwise be.
§ Industrial policies: The attempts of government to promote or restrict the development of specific industries can have unintended negative impact, even on growth and employment of the very sectors they are intended to support. Often such policies are at least partially motivated by efforts to raise government revenues without full regard for their impact on employment. In India, the textile industry accounts for 16% of GDP, 30% of exports, and 40% of industrial employmentabout 20 million direct jobs in factories not including indirect employment in trade and transportplus on-farm employment cultivating 20 million hectares of cotton. As important as this sector is, its growth is constrained by government policies and bureaucratic bottlenecks. Tax policies and licensing restrictions imposed to promote development of small scale textile units retard reinvestment and modernization of the large mills, while the tax exemption for small units prevents the growth of these businesses into units large enough to qualify for bank finance for investment in more sophisticated equipment. Many countries have successfully utilized industrial policy to promote development of specific industries. Unfortunately, experience shows that once partiality is shown to an industry, it is very difficult for government to withdraw the privileges when they are no longer necessary or even conducive to economic development. While industrial policy may be quite helpful for stimulating growth of nascent industries, it often used to sustain or subsidize industries that are declining or uncompetitive, thereby reducing the incentive for business to adjust to changing economic realities. Every country should re-evaluate policies that currently support specific industries to assess their impact on employment growth.
§ Studies of agri-business potential: Developing countries with a large section of the population still engaged in agriculture should conduct studies on the model of ICPFs Prosperity 2000 to identify opportunities to stimulate employment generation through higher crop productivity and links to downstream agro-industries and agri-businesses. Special emphasis should be placed on development of rural infrastructure for storage, cooling, processing and marketing capabilities to increase the value-added from agricultural crops and extend the reach of marketing activities.
§ Raising agricultural productivity: Raising farm output has a direct effect on rural employment and incomes in the poorer developing countries where most agricultural harvesting and handling operations are performed by manual labor. It also has a corresponding multiplier effect on non-farm employment in processing, transport and distribution, which in countries such as India can be approximately one for one or even greater. A range of proven strategies can be utilized to raise agricultural productivity on wide variety of crops.
Soil testing and soil enhancement for micro nutrients that are not replenished by conventional chemical fertilizers has been shown to double or triple farm yields and income under a variety of conditions in India. The quality of soil testing facilities may need to be upgraded to perform these tests. A detailed program has been drawn up and demonstrated in India by California Agricultural Consulting Services.
Government agricultural extension services, research stations and agricultural colleges in poorer developing countries often play a limited role in dissemination of best practices because of lack of clear targets or administrative discipline. These agencies can be required to demonstrate achievement of specific targets for higher yields and profitability on farmers fields rather than under non-commercial conditions on government property.
Farm Schools to create agricultural entrepreneurs: In many
developing countries, agriculture is a low prestige occupation. Even in areas where the
average income earned in agriculture far exceeds the average salary level in government
and the private sector, educated youth are choosing in large numbers the prestige of
salaried employment in urban areas to managing the family farm. Agricultural colleges
often become unwitting accomplishes by educating rural youth for employment as
agricultural extension officers and bank officials. Thus, the best talent from the rural
areas is being continuously drawn off from the sector which offers them and the nation the
greatest opportunities. For example, in India cultivation of horticulture crops on a small
5 acre holding can earn a net income of $5000-10,000 per annum, while the salary of an
agricultural graduate in a government or corporate job averages less than $2000.
§ Public policy: Developing countries should draw up comprehensive strategies and policies to promote and accelerate the development of Information Technology-Enabled Industries. Areas requiring special attention include cyber laws to enable e-commerce to flourish and protect consumers, deregulation of the telecom industry to spread access to internet connectivity and attract private investment, investment policies related to foreign acquisitions by firms in developing countries, reform of capital markets to encourage venture capital funds and promote new enterprises in this field, procedures to reduce bureaucratic hurdles, revision of labor laws to increase flexibility, tax policies to encourage rapid growth of this sector, elimination of tariff barriers on computer equipment and peripherals, special entrepreneurial training programs, and establishment of technology parks fully equipped with broadband, satellite telecom linkages to foreign markets.
Rapid population growth and urbanization have severely aggravated
housing shortages and pushed up real estate prices in countries around the world. In
India, for example, the current housing shortage is estimated at around 40 million units.
Even this enormous figure does not fully take into account the millions of people who live
in substandard, crowed, unhygienic conditions in urban slums. Housing is a basic human
need and powerful motivating force for development. The aspiration to own a home is shared
by people in every country and at all levels of society.
The Summit may succeed in drawing up a very extensive list of potentially beneficial strategies that can be implemented locally, nationally and internationally to generate 500 million additional employment opportunities or even more. However, critical decisions will still need to be taken to determine which strategies can be implemented most successfully in each country and region of the country at any given time. Therefore, the Summit should also present an overall strategy that will help decision-makers determine the most appropriate package of strategies for their specific area, the priority to be given to each, and the sequence of their implementation. This is what we refer to as the strategy of strategies.
In the course of its development, every society passes through a progression of stages and sub-stages from less to more advanced levels. The early stages form the essential foundation and basis for greater, more sophisticated developments. This principle is true both for development of the society as a whole as well as for development of specific geographic regions and fields of activity within the society.
This progression can be illustrated in the field of agriculture, which has passed through a natural evolution from rain-fed subsistence cultivation to irrigation by river water, man-made irrigation tanks, and wells to tap groundwater resources. These advances have been followed by introduction of various levels of mechanization, as well as hybrid seeds and fertilizers to increase soil fertility and plant productivity. Sprinkler and drip irrigation are later innovations that have dramatically increased the productivity of water resources in agriculture. Biotechnology is now being applied to advance agricultural development even further. This progressive development of on-farm practices has been made possible by and has stimulated corresponding advances in related fields. As agriculture became more productive, infrastructure facilities such as roads, storage and cold storage facilities, soil labs, veterinary and extension services, weather forecasting, market forecasting, research institutes, training and educational programs have been expanded and upgraded. Increasing farm productivity has led to the introduction of commercial crops, processing plants, links to downstream industries and to global export markets.
A similar gradation exists in every field. Indias recent accomplishments in the software industry are based on a long series of prior stages, including the education of large numbers of English speaking college graduates; the opening of world class technology and engineering universities in the 1950s that generated a huge surplus of engineers; the sending of large numbers of people for higher education and employment in the USA and UK, where they were exposed to the latest technology and demonstrated a high level of competence in this field; establishment of firms to place Indian software professionals on temporary work assignment in the USA; the return of well-educated and experienced Indians from abroad to found new software export companies in India; the proliferation of software training institutions to train hundreds of thousands of graduates in a wide range of computer-related skills; the liberalization of computer imports; opening up of the telecommunications sector for private and foreign investment; software export promotion incentives; and so forth.
Regardless whether the field is agriculture or computer technology, different countries are at different stages of progression. There are also considerable differences between regions within countries. The most appropriate strategy for any country or region will be to identify precisely where it currently is on the development progression in each specific field and to identify and implement measures that will advance activities in the field in a logical sequence to the next higher stages.
This does not mean that every developing country needs now to pass through the entire sequence of steps that nations have earlier passed through in each field, since access to knowledge, technology, organizational know-how and markets is far greater today that in the past. Nor does it imply that the time required for each stage of progression today need be similar to what it was in the past. The world is much better prepared for rapid change today than during any earlier period. However, it does mean that there are essential prerequisites for each further stage of advancement and that the maximum progress will be achieved in the minimum time by identifying and fulfilling these conditions. The more conscious a society becomes of the essential stages and conditions for the development process, the more rapidly it can traverse the ground that others have already passed over, abridging the time and avoiding the errors and problems of those who have come earlier.
The goal of generating 500 million additional employment opportunities within the coming decade may have been inconceivable at any time in the past. Even now, many may find it difficult to believe this goal is achievable. But, so too were many of the worlds recent accomplishments in different fields before and even after their realization. The end of the Cold War and imminent threat of nuclear annihilation, the peaceful unification of Europe, and global spread of the Internet are striking recent instances of humanitys heightened capacity for rapid advancement. Never before has world society had the power for such a significant undertaking, one that can provide greater economic security for vast sections of humanity. The very fact that the YES initiative has been conceived and set in motion is an expression of an enhanced capacity for creative thinking and constructive action.
In an age when human rights and needs are continuously reaffirmed in the international arena, it is easy to mistake the call for full employment as one more in a long list of unfulfilled and, perhaps, unachievable human aspirations. But that would be an error of judgment equivalent in magnitude to that to which many Europeans fell prey a few centuries ago when they looked upon the call for political democracy as utopian idealism or idle fancy. In retrospect it is now evident that the political emancipation of the common citizenry from the exercise of arbitrary power and tyranny by monarchical rule, which the advent of modern democracy has brought about, represents that indispensable foundation for humanitys enormous social progress over the past several hundred years. Political freedom has liberated human thought, aspiration, energy and initiative from the oppression of physical power. The principle of might is right has largely given place to the principle of right is might in the governance of advanced democratic nations.
But political democracy can only be considered the first step, the first of four great freedoms that are necessary to fully liberate the power of the human spirit for the fulfillment of life on earth. Political emancipation must be succeeded by an economic emancipation that will permanently abolish the insecurity and threat of deprivation that still looms like a specter over the lives of large sections of humanity. No amount of technological development or prosperity can by itself ensure economic security for all. This second great freedom can only be brought about by the proclamation and enforcement of the right of every citizen to a sustainable livelihood, which means a commitment and dedication of every society to the goal of full employment. The sense of peace and security generated by such a commitment will release a hitherto unimaginable outpouring of human energy, creativity and accomplishment in all fields of activity. If instituted now, it can bring within the century just beginning greater progress for humanity than has been achieved during the entire millennium that has just come to a close.
Political and economic emancipation together constitute the necessary foundation for two higher levels of human freedom and fulfillment. First, it will make possible a psychological emancipation of the human individual from oppression, confinement and conformity to the ruling ideas, values, thoughts, feelings and behaviors that the dominant majority in every society seeks to impose as a subtle form of control and domination over itself and everyone else. Psychological emancipation will give rise to a society of thinking, creative individuals capable of conceiving and realizing in life ideals we dare not believe in or even dream of today. And finally, this third freedom will make possible a fourth, a spiritual emancipation of humanity from the limitations and oppression of the human ego and a discovery of the spiritual infinity which is our true source and destiny.
Social development is a process of self-conception by which the collective progressively realizes in action new ideas and values that it has previously embraced in thought. The insistence on affirming the human right to assured employment opportunities does not issue merely from an idealistic call for a social justice or from sympathy with the economic insecurity and profound physical suffering of those who live in physical deprivation, though both justice and human sympathy demand nothing less. Rather this insistence arises from an understanding that this affirmation is an inevitable next step in the natural course of human development, which sooner or later the human community will demand and take by force if it is not extended by consent.
In retrospect we take for granted the previous steps in this evolutionary progression of humanity, steps which at the moment they were proposed seemed utopian, unrealistic or even anathema to many who were called upon to take them. The extension of property rights and voting rights to the un-enfranchised majority in monarchical Europe, the abolition of slavery in North America, the end of West European imperialism and colonial empires around the globe, the elimination of military rule in Latin America and totalitarianism in Eastern Europe, the eradication of social ostracism, religious persecution, untouchability and caste privilege, and the global battle to eradicate famine, illiteracy and epidemic disease are inevitable steps from humanitys primitive, feudal past in which a small minority possessed all the privileges at the expense of the unpossessed majority to a free and prosperous future in which every individual is not only free to strive but empowered to achieve and enjoy the fruits of freedom and prosperity.
Yet, at the moment these rights were first proposed, they were vigorously denied or scorned by those few who enjoyed the security and privilege of prior possession. A landed aristocracy ridiculed the notion that the masses could or should choose their own representatives, formulate their own laws and govern themselves. An educated minority derided the idea that every citizen could or should acquire literacy and book knowledge. But these and so many other apparently unrealizable and, perhaps from the perspective of an earlier period, undesirable goals have been accepted in principle as the rightful heritage if not yet the concrete possession of all humanity.
The process of this evolutionary progression is well documented and its lessons can readily be drawn. Every society has the option of utilizing one of two modes of progress, evolutionary or revolutionary; either to accept the natural and inevitable course of human development that is gradually extending greater and greater rights and privileges to all human beings or to resist the inevitable course until the growing social pressure of evolutionary force explodes and wipes out the old order. While both courses are possible, they are certainly not equally desirable. The first can result in a very rapid and smooth advancement leading to a far higher level of material prosperity for everyone. The second may easily result in a more or less prolonged period of social disorder, insecurity and destruction of the old, before the new can be built on a stable foundation. The Summit should project the evolutionary pathway to a more peaceful and prosperous future, reveal the great magnitude of the opportunity that exists for rapid progress at this time, and provide a map for those willing to convert this opportunity into reality.
 International Labour Office, World Employment 1998-99.
 The convention is Employment Policy Convention, 1964 (No.122) cited by ILO in World Employment 1995.
 International Commission on Peace and Food, Uncommon Opportunities: An Agenda for Peace and Equitable Development, Zed Books, 1994, p.86.
 World Employment 1995, p.193.
 Bout, J.K., et al., A Dutch Approach for creating growth and employment, Institute de lEntreprise, 1999.
 International Monetary Fund, World Economic Outlook 2000, p.51 and 54.
 A comprehensive theoretical study of soils, climate, vegetation and topography conducted by Buringh, van Heemst and Staring (1975) indicated that both land and water utilized for agriculture could be doubled, if necessary, and that the earth could support 36 times the 1975 level (18 times the 1990 level) of cereal production using the same share of cultivated land for cereal production. There would be severe practical obstacles to such a vast expansion of croplands, but these findings suggest that physical limitations to food production are not the primary constraints. A more commonly accepted estimate indicates that the world's land and water used for agriculture could more than double.
 Similar analysis is needed for other developed nations.
 Data from US Bureau of Labor Statistics.
 This estimate is based on rough approximations. An accurate assessment of the potential would provide useful data for the Summit.
 International Commission on Peace and Food, p.53, 57.
 ILO has identified three key factors that ensured full employment during this period. First, the post-Second World War international economic system gave high priority to the objective of full employment. It is a recurring theme in most official documents of the new post-war international economic order Second, there was a social consensus in the industrialized countries over institutional arrangements in respect of setting wages and prices, the distribution between wages and profits, and the state fiscal, credit and welfare policies that guaranteed minimum living standards and maintained aggregate demand Third, at the international level, the global economic system functioned under stable monetary and trading arrangements. (p.195-6)
 Figures extracted from ILOs on-line employment database.
 These are 1990 figures
 A complete program for enhancing crop yields and income has been developed by California Agricultural Consulting Services, Davis, CA, USA.
 Crop yields prepared by California Agricultural Consulting Services, USA.
 Statistics from UNESCO online 1999 Yearbook 1999 database
 Statistics from UNESCO online 1999 Yearbook 1999 database
 Lietaer, Bernard, The Future of Money.
 Repackaging the micro-credit programme, Businessline, May 2, 2000, p.12.
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