ZURICH • Global inequality is going to worsen unless governments do more to ensure that those most affected by rapid technological change are not just cast aside and forgotten, according to the World Economic Forum (WEF).
As it prepares for its annual Davos, Switzerland, gathering of leaders this week from the worlds of business, politics and finance, the WEF said it is time to change the fact that a person's lot in life is still largely determined by his socio-economic status at birth.
The result, it said, is that societies "too often reproduce rather than reduce historic inequalities".
The WEF yesterday released the findings of its social mobility report. The Global Social Mobility Index benchmarks 82 economies, assessing their levels of mobility in 10 fields including health, education, technology and wages.
The report said Europe scores well, particularly Nordic countries, with Denmark coming in first, followed by Norway, Finland, Sweden and Iceland.
Calling these five countries "the closest economies to the ideal state", the report said they combine provision of access, quality and equity in education with provision of work opportunities and good working conditions, social protection and inclusive institutions.
Japan is ranked 15th, the highest among Asian countries.
Singapore is in 20th spot, the highest among South-east Asian countries. It ranks within the top 10 globally on education access, as well as education quality and equity. South Korea is ranked 25th and China 45th. The United States came in at 27th spot.
The report noted that there are only a handful of countries with the right conditions to foster social mobility. Most countries underperform in four areas: fair wages, social protection, working conditions and lifelong learning.
"In most countries, individuals from certain groups have become historically disadvantaged and poor social mobility perpetuates and exacerbates such inequalities. In turn, these types of inequalities can undermine the cohesiveness of economies and societies," said the report.
The long-running issues have fed a growing sense of unfairness - even where economic measures suggest inequality is broadly narrowing - and an erosion of trust and disenchantment with politics.
"The Fourth Industrial Revolution, and with it, continuing and future disruption to labour markets, will likely compound differences in social mobility for those countries unprepared to take advantage of new opportunities," the report said.
It said that giving everyone the chance to fulfil their potential would not only improve personal well-being, but also bring broader benefits by boosting economic growth.
"Inequality has become entrenched and is likely to worsen amidst an era of technological change and efforts towards a green transition," it said.
Reversing the outlook is possible but requires concerted action, political will and time. Governments must play the role of equaliser, levelling the playing field for all citizens regardless of their socio-economic background, the report added.
The WEF offered a number of recommendations for governments and businesses.
These include altering personal taxation and addressing wealth concentration, improving education to better equip people throughout their working lives, and more social protection for those whose industries are facing upheaval.
Businesses can also promote a culture of meritocracy in hiring, providing vocational education, reskilling and upskilling as well as by paying fair wages.