Three economic shifts shaping the global economy
The global economy is transforming and is driven by technological innovations and financial systems. According to the World Economic Forum (WEF), three influential key trends are artificial intelligence (AI) in wage increases, the role of fintech in empowering and enabling MSMEs, and the rising importance of interoperability in digital finance.
Understanding and adapting to these shifts will allow stakeholders to harness innovation, drive inclusion, and build a more robust and equitable global economy.
AI is transforming businesses and recalibrating the labour market. Employees working in industries with more AI exposure are experiencing wage increases at twice the rate compared to those in less exposed sectors.
Today, AI skills command a wage premium of 56% for similar positions without AI. Over the years, individuals feared and professionals predicted that the rise of Industry 4.0 would profoundly impact work and life. The skills employers seek in AI-exposed jobs are evolving 66% faster than in other occupations. Workers who adapt and acquire AI competencies are rewarded with higher salaries and better job prospects.
Contrary to the fears of mass job losses, employment is also rising in automated roles. This surge in productivity translates into higher revenue per employee, which allows companies to pay higher wages. Both automated and augmented jobs are expanding faster. All industries have experienced a quadruple jump in productivity. Industries leveraging AI have also reported that revenue per employee has increased three times faster than those in AI-exposed industries.
Another trend that is catching up fast is fintech, which can empower small and medium enterprises to participate in global commerce. Adopting fintech solutions enables MSMEs to conduct their financial transactions faster and at a lower cost. MSMEs can build trust with international partners as these platforms offer real-time exchange rates, transaction fees, and up-front pricing, making the process transparent and accessible.
The fintech platforms can reduce settlement time and regulatory hurdles, thus freeing up working capital for MSMEs. Now, banks are participating in fintech to offer alignment to customer-centered innovative solutions. Blockchain-based solutions streamline cross-border transactions, improve security, and enable small businesses to access sophisticated financial tools previously reserved only for large corporations.
Today, global trade is democratised and has empowered small businesses to compete globally by ensuring safety and making cross-border payments faster, cheaper, and more transparent. Interoperability is the foundation of modern commerce, scalable and intrusive digital financial systems that are no longer optional but have become essential for global growth and stability.
Another shift witnessed in the digital finance field, which has now shifted from a nice-to-have to a must-have, is interoperability in digital finance. Interoperability in digital finance significantly transforms global regulatory compliance by embedding compliance mechanisms directly into financial systems and creating standardised frameworks for cross-border oversight.
It refers to the ability of different financial systems to seamlessly communicate and exchange data, which is now a strategic necessity for the digital economy. Promotes regulatory compliance and improves efficiency as it allows for identity checks and cross-border roads to be built directly into payment flows of digital assets, which helps reduce fragmentation and aligns with public policy.
It supports global cooperation and coordination as it aims to standardise instant payment systems and regulatory frameworks, ensuring that international finance is more resilient and accessible. Interoperability also underpins open banking that allows customers to share financial data securely across providers, providing innovation, competition, and economic inclusion. Interoperability enables real-time compliance monitoring functionalities for central banks and regulators.
The confluence of these three trends will redefine the global economic landscape to become the backbone of a genuinely international, digital financial ecosystem.
2022 © All right reserved for Oman Establishment for Press, Publication and Advertising (OEPPA) Provided by SyndiGate Media Inc. (Syndigate.info).
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