Trade, technology and jobs
The World Trade Report is an annual publication that aims to deepen understanding about trends in trade, trade policy issues and the multilateral trading system.
The 2017 World Trade Report examines how technology and trade affect employment and wages. It analyses
the challenges for workers and firms in adjusting to changes in labour markets, and how governments can
facilitate such adjustment to increase the positive impact of open trade and technological progress.
Unprecedented economic growth over the last quarter of a century has necessarily been accompanied by unprecedented economic change.
The dramatic opening of the world economy, combined with the rapid pace of technological change, have improved the welfare and living standards of billions of people around the world, including its poorest citizens. But this process has necessarily been accompanied by economic change and upheaval in the jobs market, as economies have
shifted from lower to higher productivity and from declining industries to rising ones.
Technological progress and openness to trade – the two most important drivers of economic advances and change today – are also inextricably linked.
The rise of a more integrated global economy has accelerated the spread of innovation, information and know-how, and has spurred cross-border collaboration and competition, all of which have helped to fuel technological advances. At the same time, these technological advances – from containerization to improvements in air-travel, to the
invention of the internet – have helped to bring about today’s increasingly integrated global economy. The
result tends to be a virtuous circle in which advances in technology lead to more openness to trade, and
economic openness spurs technological advance, all helping to underpin deepening growth and greater
integration of developing countries into the global economy.
The scale and pace of recent global economic change is unprecedented but the process is not new.
Since the Industrial Revolution some 200 years ago, economic development has progressively widened,
deepened and accelerated, thanks in no small part to the interplay of technological innovation and global
integration. Successive “waves” of development – for example, in Europe and North America in the
19th century, in the newly industrializing economies after the mid-20th century, and in the big emerging
economies over the last 25 years – have depended both on harnessing new technologies and on
integration into an increasingly global economy.
Continued economic progress hinges on the ability of societies to adjust, adapt and encourage inclusiveness.
The ability of workers to move from lower- to higherproductivity jobs, and from declining sectors to rising
ones, is the essential mechanism by which trade and technological progress increase overall economic
efficiency, promote development and improve living standards.
Although total labour market adjustment costs are typically much smaller than the total benefits of
trade and technological change, these costs are often disproportionally borne by certain groups or
communities, in the form of declining incomes or job losses.
The fact that some countries seem to be adapting to technological change and globalization better
than others, by reducing obstacles to labour mobility in particular, and by more equitably and actively
sharing the costs and benefits of change more broadly, suggests that government policy can play an
important role in helping economies and societies to adjust to a changing world.