INTHEBLACK July 2022 - Magazine - Page 22
F E AT U R E
// T R A N S F O R M AT I V E T E C H N O L O G Y
“ M O S T E C O N O M I C M O D E L S T H AT W O U L D T RY T O
U N D E R S TA N D T H E I N F L U E N C E O F T E C H N O L O G Y O N
G D P W O U L D B E D O I N G I T T H R O U G H P R O D U C T I V I T Y,
N O T T H R O U G H PA R T I C I PAT I O N A N D P O P U L AT I O N .”
JOHN O’MAHONY, DELOITTE ACCESS ECONOMICS
THE GOLD STANDARD FOR ECONOMIC GROWTH
The three elements of the “PPP model of economic
growth” all work differently.
Increasing the population boosts both the pool of
workers and the pool of consumers, but it isn’t the best
lever to lift economic growth on its own.
While adding more people might increase the
economy’s output, there are more people for that
output to be shared between, so it doesn’t lift living
standards.
Participation is about taking people from outside
the workforce – those who are neither working
nor looking for work – and bringing them into the
workforce. This of course requires those who join the
workforce to give something up, which might involve
reducing the time they spend caring for their parents
or children or reducing their leisure time.
Productivity growth is the “gold standard” for lifting
economic growth, because it makes everybody better
off without people having to work longer.
“They work smarter, so that’s why productivity
is so much more important than those other two,”
says John O’Mahony, a partner at Deloitte Access
Economics.
“Most economic models that would try to
understand the influence of technology on GDP
would be doing it through productivity, not through
participation and population.”
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The economic benefits of technology are not always
easy to measure. Nonetheless, O’Mahony and his
colleagues found in a research paper published in the
Economic Record that new technologies including
social media, mobile technology and data analytics
have added about 6 per cent to GDP over a 20-year
period.
While increasing productivity might be the main
prize, there are still opportunities to boost economic
growth by increasing population and participation.
THE ROLE OF CITIES
Jannat Maqbool CPA, interim executive director of
the Smart Cities Council Australia and New Zealand,
says there is a huge opportunity to boost economic
growth with technology, and liveable cities have
a central role to play in increasing the size of the
workforce by attracting more people and increasing
the participation rate by making it easier for people
to travel to work.
Key to good city planning is a digital twin. This
is a digital replica of a physical environment, which
draws on AI to help designers understand how cities
are used and can be better used, such as by running
different public transport and motorway scenarios.
The twin is also linked to the physical environment
with IoT sensors, which show how the city is being
used. The Smart Cities Council is working with a