(Yicai Global) June 25 -- Digital technology is fundamentally changing our economy and society.
Luohan Academy, a research platform established by tech titan Alibaba Group Holding, held an annual meeting in Hangzhou today to discuss the basic issues of the digital economy concerning 10 aspects of human beings' future.
More than 200 high-profile scholars, political and business leaders from around the world attended the conference.
Michael Spence, Nobel Laureate in Economics in 2001, believes that the benefits of the digital economy are difficult to accurately measure and estimate, and will affect our balance between its risks and benefits. The current metric for the economy focuses on economic growth and ignores other benefits, including health and convenience for life. The long-term impact of the digital economy is deep and multidimensional, and so it requires a multidimensional framework to gauge its personal and social benefits.
The development of China's digital economy not only shows in its growth rate, but also in the speed of its connection with remote and poor groups and existing economic resources, which displays a startlingly inclusive growth pattern, Spence said.
Robo-advisors in the financial sector can help users allocate assets more steadily, especially for those with less investment experience, high cash holdings, and frequent trading, said Alberto Rossi, an assistant professor at the University of Maryland.
Will the ever-burgeoning civilian financial services lead to more risks? Bengt Holmstrom, winner of the 2016 Nobel Prize in Economics, holds that information is the new collateral in the digital economy. With the information collected on digital platform, small borrowers now need no collateral to scure credit since the lender knows a borrower's reputation better than the borrower herself. In this respect, the platform pattern is close to the basic model of Western credit cards and much cheaper than them and more fraud-proof since it is based on digital recognition and contains a plethora of data.
No evidence indicates that technology will lift unemployment, Sir Christopher Pissarides, winner of the 2010 Nobel Prize in Economics, said on the issue of whether digital technology will lead to more unemployment or shorter work hours. During its development, however, technology does indeed promote the structural transformation of employment. Data since 1980 show that employment has gradually shifted from manufacturing to the service sector.
Economic globalization has shown a reverse trend in recent years. Will globalization in the digital age move backwards? Spence believes that China's digital economic growth pattern that developing its vast domestic market will bring huge growth opportunities can inspire other countries.
On this basis, we can easily imagine that only a little smidgeon of international cooperation will promote this developmental pattern all across the world, he said, adding the participation of small and micro enterprises in various countries in the global market may become the next growth engine, and this is the most exciting development, in his view.
The Luohan Academy's questions on the digital economy are as follows:
1. Balancing Benefits and Challenges
Digital technology promises immense benefits but imposes daunting challenges.
Can we embrace the technology proactively while managing the new challenges at the same time, or must we think through the risks first?
And do we have this choice?
2. Inclusive and Sustainable Growth
Will the digital technology lead to a new version of yet another digital divide between the haves and have-nots?
How can we best make the case that digital technology can deploy to benefit society in an inclusive way?
3. Jobs, Work and Income Distribution
How does the digital technology affect jobs and job opportunities?
How should a society and its government help the adversely affected to become better equipped to adapt to and, hopefully, exploit the challenges?
More generally, how shall we prepare society for the challenges to future jobs, work and income distribution?
4. Data, Privacy and Security
How should we perceive and deal with digital data?
To what extent do we understand privacy as a tradeoff?
Are private sector incentives sufficient to provide adequate data security?
5. Coordination and organization
Who are the beneficiaries of a platform economy, all the participants, or some platform companies?
What are the most important changes digital technology might bring to the society's coordination and organization of production and commerce?
Are these new forms of coordination and organization of the economy captured by current economic theory?
6. Governance and Regulations
How should governance and regulations adapt and evolve in the digital age?
7. Inclusive Digital Finance
How shall we promote inclusive finance while managing the attendant risks at the same time?
8. International Digital Cooperation
How shall we promote international digital cooperation to benefit all human society?
9. Cognition and learning
How have human beings progressed from Plato's Cave to exploit this potential?
Do we understand the ways in which digital technologies may expand the tools for acquiring knowledge?
10. Ethics and Responsibilities of Technology
What are the new ethics of digital technology to ensure the direction towards a better society?
Editor: Chen Juan, Ben Armour