Sustainable for Some, But Others at Height- already automated or potentially amenable ened Risk of Default. A prolonged period of to automation in the next decade. Studies low interest rates, similar to the post-昀椀nancial have estimated that automation could elim- crisis period, would increase the a昀昀ordability inate 9 percent of existing jobs and radical- of debt for some economies, including ad- ly change approximately one-third in the vanced economies in Asia, Europe, and North next 15 to 20 years. Emerging technologies America, allowing them to sustain higher will also create jobs and will enable greater national debt ratios. The world’s major central virtual labor mobility through Internet-based banks, including the European Central Bank, freelance platforms that match customers the Federal Reserve, and the Bank of Japan, with self-employed service providers as have pursued an ultra-low interest rate policy well as speed-of-light commercial data and for at least the past decade, and most econ- software transmission. omists expect these countries to be able to sustain high debt ratios because they have Demographics, speci昀椀cally aging populations, borrowed in their own currency. Departures will promote faster adoption of automation, from this policy could increase debt servicing even with increases in the retirement age. costs and increase the risks associated with Most of today’s largest economies will see high debt ratios. their workforces shrink over the coming two decades as aging workers retire. South Korea Emerging and developing economies that is projected to lose 23 percent of its work- have 昀椀nanced at least some of their debt with ing-age population (age 15-64), Japan 19 per- external borrowing are at increased risk of cent, southern Europe 17 percent, Germany 13 debt distress and could face a debt crisis, even percent, and China 11 percent during this peri- if global interest rates remain low, because od, if the retirement age remains unchanged. local currency depreciation and increased Automation—traditional industrial robots and risk premiums could increase servicing AI-powered task automation—almost certainly costs. Some governments are likely to face will spread quickly as companies look for ways the choice of reining in public spending and to replace and augment aging workforces risking public discontent, or maintaining public in these economies. Automation is likely to spending, which would further increase debt spread more slowly in other countries, with burdens and borrowing costs and risk local the key being whether it o昀昀ers cost advantag- currency depreciation. Facing these choices, es, including over low-skilled labor. some governments are likely to prioritize The number of jobs created by new technolo- spending on domestic issues rather than the gies is likely to surpass those destroyed during global commons. the next 20 years, judging from past episodes. DISRUPTIONS IN EMPLOYMENT One study by the World Economic Forum The global employment landscape will con- estimates that by 2025, automation will have tinue to shift because of new technologies, created 97 million new jobs and displaced 85 notably automation, online collaboration tools, million existing jobs. Several factors, including arti昀椀cial intelligence (AI), and perhaps addi- skills, 昀氀exibility, demographic factors, underly- tive manufacturing. Tasks that once seemed ing wages, the share of jobs susceptible to au- uniquely suited to human abilities, such as tomation, and access to continuing education driving a car or diagnosing a disease, are could in昀氀uence how well individual countries 46 GLOBAL TRENDS 2040