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By Frank-Jürgen Richter
Business Times, October 30, 2014

Has China any weakness? Well, yes and no. Of course, an opinion writer might say this, but I believe China is somewhat vulnerable to an incoming factor that will hit all nations big or small, developed or developing – and that’s the third wave of technological change. I will come to this aspect later; first let me discuss other factors, again globally scoped.

China is the most populous nation on earth though soon to be overtaken by India. The United Nations has noted that the 7 billion world population will grow to about 11billion by 2100 With most of that growth coming from sub-Saharan Africa and Asia. The one-child policy of China undoubtedly affected its demographic profile, but many other nations voluntarily reduced their birth rates.

Undoubtedly, it was China’s women who did the most, driven by economics, the better availability of contraception and, above all, by knowledge. The most important aspect of their learning was that reducing infant mortality due to better healthcare and better post-natal care showed less need to have many children to ensure that a surviving male child would continue the family line. Data showed up to nine births were needed to be statistically sure of a surviving boy-child and thus total family numbers grew.

Now, across most of the world, the birth rate has fallen to the replacement rate of 2.05 or below – except for Africa and Asia. In China, the population by 2100 is expected to reduce slightly to about one billion. The increase in global population has many knock-on effects, one of which is food security. This aspect maybe mitigated by a natural drift of the rural population to townships, which permits tiny fields to be sold to agri-businesses able to use large digitally controlled machines to work the land to its best advantage.

According to the UN, more than half of the world’s population had moved to cities by 2008, and by 2050 some 64 per cent of developing and 86 per cent of developed nations’ people would be urban residents. The rural-to-urban migration occurred some time ago in Europe and North America, but is still to occur in Africa and Asia – just those places where the birth rates are still high.

My rough oversight of the figures suggests that developing nations have presently achieved about 69 per cent of the UN 2050 target – but that figure includes single-citied Micronesia, and large-citied South Africa and the Middle East and North African (MENA) states; excluding these regions yields 54 per cent. On the other hand, developed nations have achieved an average of 88 per cent of the 2050 UN target.

According to general consensus, we have passed through two major changes. The first was commonly called the “Industrial Revolution” when machines powered by wind, water, then steam took over from the muscle power we used before: steam power was the greatest driver from the mid-1700s to the early 1800s.

The second great change was the discovery of electricity generation in the late 1800s bringing in the age of electrical power. Through these “waves of change”, we have seen world GDP rise due to increased trade. Of course, workers were displaced for a while, but always they have returned to work on new tasks associated with and developing from the steam or electricity utilisation.

But this is not the case now as the third wave of industrialisation – the digital revolution – will dispense with many laborious tasks. I have already alluded to digitally controlled agricultural vehicles. These are machines that will plough and harvest with little human intervention controlled by satellite guidance systems. They understand how much seed to plant in each field and how much fertiliser to apply to gain optimum yields.

The earlier rural-to-town migration saw muscled men absorbed in the factories, but now this will not be the case as automation is the rule in new factories, and costly manpower will be reduced except for the highly educated able to design and control the machines.

The “Great Global Issue” will be how to manage the masses who wish to move to the cities in which, increasingly, there is less need form annual labour. It is less of a problem in the developed world which has already achieved 88 per cent of the UN target, but the developing world aspiring to the developed world’s lifestyle has achieved only 54 per cent of that target.

Even China with its mega-conglomerations in Shanghai/Suzhou and the Pearl River delta has only recently seen over 50per cent of its population reside in cities. In olden times, there were riots against transitional changes, and people could see which factories were automating; now the digital revolution is accelerating and all of us are forcing it ahead and uplifting the wealth divide as we embrace new nimble Internet giants worth millions but having fewer workers.

How can a State that has little spare cash offer suitable benefits for their poor who might never work again? And how can States mollify hardworking people who look to the others who are long-term idle displaced by the digital tsunami?

New thinking is required especially as we find “premature de-industrialisation” in developing countries where already labour is pricing itself out of the market place.

As I suggested, it is the digital revolution that will cause havoc globally, and it is the populous developing nations that will suffer most. China, I think, has thought ahead. It has built many new cities which await residents from the provinces nearby. It needs to absorb these migrants into meaningful tasks, and to provide the services they will need – including many more services, education and medical staff that were not available in truly rural areas.

Hopefully, the city managers will be able to build online competency-based education suitable for broad Chinese needs rather than Internet-based courses developed by Western academic gurus. Local courses uplifting local competencies will revolutionise their new workforces taking up useful jobs – not horrid demeaning soul-destroying make-tasks.


The writer is founder and chairman of Horasis, a global visions community

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