China is leading the rise of platform marketplaces that allows the effects of technology to reach more people more quickly than before, a World Bank official has said.
New business models, known as digital platform firms, are evolving from local start-ups to global behemoths, enabling clusters of business to form in underdeveloped rural areas, said Simeon Djankov, director of the latest World Development Report 2019, with a theme on the changing nature of work.
“It took Walmart 20 to 25 years to establish a global presence. But Taobao only took over 10 years to have 9 million global merchants on its site,” he said during a global road show on the report at Fudan University in Shanghai.
Djankov noted that digital technologies allow firms to scale up or down quickly, blurring the boundaries of firms and challenging traditional production patterns.
Meanwhile, the advent of technologies reshapes the need for different work skills. While routine, job-specific skills are losing luster, the demand for non-routine cognitive and social-behavioral skills appears to be on the rise, he said.
As opposed to worries that technology may make people jobless, Djankov pointed out that they also create many more new occupations. For example, instead of hiring traditional loan officers, JD Finance, a leading fintech platform in China, created more than 3,000 risk management or data analysis jobs to sharpen algorithms for digitized lending.
The report also released a cross-country metric, Human Capital Index, as a gauge of identifying the productivity of the next generation of workers. Taking into consideration survival rates, education and health levels, China ranked 46th among all 157 surveyed countries.
But according to Djankov, cities like Beijing and Shanghai are very advanced in these aspects and might be placed among the top five using the same criteria.