Tech for People: Avoiding a K-Shaped Future

ByKen Hu

February 8, 2021

Ken Hu

COVID-19 is deepening inequity both within and beyond borders. And as the world shifts increasingly online, uneven access to technology is leaving much of the global population behind.

If we are to avoid uneven socioeconomic recovery and deeper divisions between people, industries, and nations, tech companies can’t just focus on innovation – we need to focus on people, on inclusion, and on empowering individuals and communities. Otherwise, inequity will continue to grow.

You can see the divide deepening in education. When schools closed, learning was disrupted for more than 1.6 billion students around the world. Some communities quickly got online and bridged the gap with remote education, but families without access to the Internet or digital devices at home were hit hard – in developing and mature economies alike.

In the UK, for example, schools in some areas have reported that up to 70% of children lack computers at home. At the same time, children with shared access to devices are spending less time in online classes – 2.6 hours per day for secondary school pupils, compared with 3.8 hours per day for their more advantaged peers. With other households lacking the unlimited broadband or speeds necessary to power online classes, the Royal Society predicts that lost school time could hurt the UK economy for 65 years.  

Similar findings can be seen in the EU and US. In October 2020, Members of the European Parliament (MEPs) overwhelmingly voted for measures to close the digital skills gap – research showed that 32% of pupils in some member states had been without access to education for several months during 2020. In the US, 59% of parents with lower incomes surveyed by the Pew Research Center in April 2020 revealed that their children would likely face at least one of three digital obstacles with remote education.

As UK research suggests, continued interruptions to education can have devastating long-term effects both on children today and national economic prospects for decades to come.

You can see the divide deepening among the elderly. Many senior citizens embraced digital technology for the first time during the pandemic, stepping out of their comfort zones to shop on Amazon or keep in contact with their families on Zoom. While this is exciting progress, it’s still hard to argue that the older demographic are ready for a world where digital life is the new normal. Many key aspects of digital life are still inaccessible – things like e-payments, food delivery platforms, and online healthcare, which can mitigate isolation and increase empowerment, remain out of reach.

If senior citizens don’t know how to get a green health code on their smartphone in China, for example, they can’t use public transport or go to the hospital. In the UK, more than half of people over 75 years old have never used the Internet.

With over 700 million people aged 65 years or over in the world, accounting for 9.3% of the population, the digital generation gap is not new, but it’s taken on a new level of severity this past year.

You can see the divide deepening in business. 2020 saw a swathe of household names and iconic brands wiped out. While many – but not all – large corporations have the financial muscle to weather the pandemic storm, countless smaller companies do not. Many lack the agility, infrastructure, finances, or know-how to quickly shift their businesses online, ramp up e-commerce, seamlessly transition to work-from-home, or automate processes. Other sectors that provide face-to-face services, such as the hospitality industry, simply aren’t designed to transition to an online model.

This has had a devastating effect on SMEs the world over, and the repercussions are likely to continue throughout 2021, with double-digit increases in insolvencies expected globally. Compared with 2019, bankruptcy rates are predicted to increase by 57% in North America, 34% in Central and Eastern Europe, 33% in Latin America, 32% in Western Europe, and 31% in Asia.

As 25 million SMEs account for 99% of all companies in the EU – generating more than half of the EU’s GDP and providing more than two-thirds of all job opportunities – the potential impact on broader economies cannot be taken lightly.

You can already see the divide deepening in employment. The OECD reports that the impact of COVID-19 on jobs is 10 times higher than what we saw during the financial crisis, in turn creating a burgeoning social crisis. In the sectors that have been hardest hit, 40% to 50% of workers are under part-time or temporary contracts or are self-employed, all scenarios with limited job security and access to unemployment benefits. Women and low-paid workers are most affected by job losses, while young people face a bleak job outlook that could affect them for years to come.

Moreover, much of the workforce lacks the digital skills to rapidly transition from the offline to online world of work, even in the most advanced nations. In the EU, for example, the European Commission reports that 37% of the labor force lacks sufficient digital skills, despite their growing importance in the workplace.

Two Possible Job Scenarios

 Quarterly data, projections from Q2-2020 forward

A K-Shaped Future?

Estimates from the World Bank hold that COVID-19 will push an estimated 424 million people into poverty, reversing decades of progress and widening socioeconomic inequities both in developing and developed nations.

Unlike previous cycles of recession and recovery, this widening gap is likely to result in a K-shaped recovery where different groups of people, industries, and different parts of the economy recover at different rates. The socioeconomic restructuring that takes place may not just widen inequality, but entrench it by polarizing wealth both within borders and between nations. And of course it’s individual lives that are affected – a job loss that plunges a family into poverty, the extended isolation and lack of support for a senior citizen that results in depression, missed schooling that affects the future of a child.

Moving Forward

The complexity and scale of what the world is going through means that no easy answer is available. Which is why we need to get to work now. We need a systematic approach that brings together governments, businesses, and the people who are affected most.

From my perspective, one that is grounded in technology, I think there are a few steps that we can take: First and foremost, we need to connect the unconnected: half the world still doesn’t have Internet access, and that’s simply untenable in an increasingly digital world. Second, we need to tackle the lack of digital skills in society. People can’t be empowered by technology if they don’t know how to use it. Third, we need to focus on underserved communities, including women, girls, and older generations. Widening inequity and a lack of inclusion will hamstring any efforts to create a more sustainable economy as we slowly pull our way out of this pandemic.

Technology has the potential to increase inequality, and it has. But if we plan well and work together with focus, technology also has the power to close socioeconomic gaps. It’s imperative that we treat it and apply it as a tool of inclusion, one that benefits and empowers people and one that underpins a fairer, more even recovery.


Learn More

This article is based on the talk I gave at DAVOS 2021 on January 28, 2021 on “Harnessing the Fourth Revolution.”


Disclaimer: Any views and/or opinions expressed in this post by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Huawei Technologies.

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Ken Hu

Rotating Chairman, Huawei

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