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Tomorrow's Economy Will Be Very Different To Today's, So Let's Start Talking About What It Should Look Like – Forbes

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A few days ago, thanks to my algorithmic recommendations — not from the sources I usually read, but selected on the basis of subject matter of interest to me — I came across an article about a 57-year-old American who after being released following a 37-year jail term, was asked about his impressions of something as commonplace as a smartphone, or the internet.

The man entered prison at the age of 20, in 1983, when a cell phone weighed more than a kilo and was bigger than a brick, and when no one outside military or very academic circles had the slightest idea what the internet was. Now, after some time getting familiar with the use of technology, he was amazed at the things he could do: not only communicate, but renew his driver’s license, see his favorite team’s results, do the shopping, get directions on an interactive map that also spoke to him… one can only imagine the look on this man’s face the first time that the little gadget they had put in his hand said something like “at the next intersection turn right”.

How much has technology changed in the last few decades? When you are of a certain age and you teach young people, you realize that they regard as completely natural things that to you, even if you use them all the time, still have an aura of magic about them. As somebody who teaches innovation, I make a conscious effort to try to keep myself up to date: I can’t imagine an innovation teacher looking blankly when her students tell her about the latest app, game, service or company… but I can’t hide it: there are things that still seem like magic to me. Getting into my car and being able to choose practically any song from an immense repository that covers practically the entire history of music for several centuries, or the other way around: listening to something, and having an app tell me, after a few seconds, what it is and who is playing it… really, I’m still amazed by these things.

When we reflect on the progress of technology, it is difficult not to be surprised at how far we’ve come in such a short time. Some people may complain about digital distractions, but the internet provides conveniences and possibilities that only a short time ago were unimaginable.

What happens when we see technology behaving the way it does, with rapid improvements in performance over the years? What will happen when many of the developments we are beginning to see now, such as machine learning, continue evolving? A recent article by Sam Altman, former president of Y Combinator and now CEO at OpenAI, properly entitled “Moore’s Law for everything, claims that the development of artificial intelligence alone will also follow Moore’s Law like many other technologies, and will be able to generate an unconditional basic income for every inhabitant of the United States in less than ten years, that the increase in productivity generated by machines capable of doing many of the things that people do today, coupled with their ability to do those same things better and without errors, will lead us to the greatest era of wellbeing ever known.

Others, obviously, criticize his metrics and claim that these productivity gains must be made tangible, but what is more tangible than those factories in China that used to assemble our electronic devices with people dedicated to frighteningly repetitive tasks, and that are now overwhelmingly carried out by robots? In a very short time, the first companies to embark on this route have found that their competitors simply had no choice: either they imitated them or they ceased to be competitive. Will this lead to mass unemployment? No, instead, we will be retrained in new functions, such as tagging images to educate algorithms, otherwise there will be widespread unrest

Adapting our societies to understand the change in the role and definition of work will be an extremely complex task. In the near future, many of the jobs we know will be carried out by machines and algorithms. But we must manage this process differently to the way previous disruptions have been. To think that the greatest increase in productivity in history will trigger a problem of growing inequality that relegates many to absolute poverty is to have no faith in humanity — even if that position sometimes may seem justified.

We now need to have a serious debate as to the pros and cons of some kind of unconditional basic income, to shake off the absurd myths and ignorance around it, and to start thinking about what tomorrow’s world will be like and what economic model it will be based on. And there is no better time for this than after a pandemic.

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Economy

Canada to go big on budget spending as pandemic lingers, election looms

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By Julie Gordon

OTTAWA (Reuters) – Canada‘s Liberal government will deliver on its promise to spend big when it presents its first budget in two years next week amid a fast-rising third wave of COVID-19 infections and ahead of an election expected in coming months.

Finance Minister Chrystia Freeland has pledged to do “whatever it takes” to support Canadians, and in November promised up to C$100 billion ($79.8 billion) in stimulus over three years to “jump-start” an economic recovery in what is likely to be a crucial year for her party.

Prime Minister Justin Trudeau’s Liberals depend on the support of at least one opposition group to pass laws, and senior party members have said an election is likely within months as it seeks a clear majority and a free hand to legislate.

Furthermore, by September, all Canadians who want to be vaccinated will be, Trudeau has said.

Freeland has said the pandemic created a “window” of opportunity for a national childcare plan, and that will be reflected in next Monday’s budget along with spending to accelerate Canada‘s shift toward a more sustainable economy.

“It will be a green and innovative recovery plan aimed at creating jobs,” said a government source who declined to comment on specific measures. The budget will aim to help those “who have suffered most” the effects of the pandemic, the source said.

Critics say the government would be better to hold off on blockbuster spending because the economy has shown it is poised to bounce back, and to prevent the country from racking up too much debt.

“Clearly a garden-variety stimulus package is the last thing we need. This is pile-on debt,” said Don Drummond, an economist at Ontario’s Queen’s University.

“The risk is that at some point interest rates are going to go up and we’re going to be in trouble,” he said, pointing to the mid-1990s when Canada‘s debt-to-GDP ratio skyrocketed, leading to rating agency downgrades and years of austerity.

The Bank of Canada cut its benchmark interest rate to 0.25% to counter the economic fallout of the COVID-19 crisis and has said rates will not rise until labor market slack is absorbed, currently forecast for into 2023. That may change when it releases new projections on April 21.

EXPANDING ECONOMY

More than 3 million Canadians lost their jobs to the pandemic. As of March, before a third wave forced new lockdowns, only 296,000 remained unemployed because of COVID.

Despite still-high unemployment levels in hard-hit service sectors, the economy has expanded for nine straight months even as provinces have adjusted health restrictions to counter waves of infections.

“Once we see sustained reopening, we do think that the recovery will have quite a bit of momentum on its own,” said Josh Nye, a senior economist at RBC Economics.

“We think Canada‘s economy will be operating pretty close to full capacity by this time next year,” he said.

Economists surveyed by Reuters expect Freeland to project a deficit in the range of C$133 billion to C$175 billion for fiscal 2021/22, up from the C$121.2 billion ($96.7 billion)

deficit forecast in November. https://tmsnrt.rs/3wSJPcm

The deficit for fiscal 2020/21 ended in March is forecast by the government to top a historic C$381.6 billion ($304.5 billion).

Canada announced on Monday a C$5.9 billion ($4.7 billion) aid package for the country’s largest airline carrier, Air Canada, and said talks were ongoing with No. 2 carrier WestJet Airlines Ltd and others.

 

(Reporting by Julie Gordon in Ottawa; Additional reporting by Fergal Smith in Toronto; Editing by Steve Scherer and Peter Cooney)

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Economy

CANADA STOCKS – TSX ends flat at 19,228.03

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* The Toronto Stock Exchange’s TSX falls 0.00 percent to 19,228.03

* Leading the index were Corus Entertainment Inc <CJRb.TO​>, up 7.0%, Methanex Corp​, up 6.4%, and Canaccord Genuity Group Inc​, higher by 5.5%.

* Lagging shares were Denison Mines Corp​​, down 7.0%, Trillium Therapeutics Inc​, down 7.0%, and Nexgen Energy Ltd​, lower by 5.7%.

* On the TSX 93 issues rose and 128 fell as a 0.7-to-1 ratio favored decliners. There were 26 new highs and no new lows, with total volume of 183.7 million shares.

* The most heavily traded shares by volume were Toronto-dominion Bank, Nutrien Ltd and Organigram Holdings Inc.

* The TSX’s energy group fell 1.61 points, or 1.4%, while the financials sector climbed 0.67 points, or 0.2%.

* West Texas Intermediate crude futures fell 0.44%, or $0.26, to $59.34 a barrel. Brent crude  fell 0.24%, or $0.15, to $63.05 [O/R]

* The TSX is up 10.3% for the year.

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Economy

Canadian dollar outshines G10 peers, boosted by jobs surge

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Canadian dollar

By Fergal Smith

TORONTO (Reuters) – The Canadian dollar advanced against its broadly stronger U.S. counterpart on Friday as data showing the economy added far more jobs than expected in March offset lower oil prices, with the loonie also gaining for the week.

Canada added 303,100 jobs in March, triple analyst expectations, driven by the recovery across sectors hit by shutdowns in December and January to curb the new coronavirus.

“The Canadian economy keeps beating expectations,” said Michael Goshko, corporate risk manager at Western Union Business Solutions. “It seems like the economy is adapting to these closures and restrictions.”

Stronger-than-expected economic growth could pull forward the timing of the first interest rate hike by the Bank of Canada, Goshko said.

The central bank has signaled that its benchmark rate will stay at a record low of 0.25% until 2023. It is due to update its economic forecasts on April 21, when some analysts expect it to cut bond purchases.

The Canadian dollar was trading 0.3% higher at 1.2530 to the greenback, or 79.81 U.S. cents, the biggest gain among G10 currencies. For the week, it was also up 0.3%.

Still, speculators have cut their bullish bets on the Canadian dollar to the lowest since December, data from the U.S. Commodity Futures Trading Commission showed. As of April 6, net long positions had fallen to 2,690 contracts from 6,518 in the prior week.

The price of oil, one of Canada‘s major exports, was pressured by rising supplies from major producers. U.S. crude prices settled 0.5% lower at $59.32 a barrel, while the U.S. dollar gained ground against a basket of major currencies, supported by higher U.S. Treasury yields.

Canadian government bond yields also climbed and the curve steepened, with the 10-year up 4.1 basis points at 1.502%.

 

(Reporting by Fergal Smith; Editing by Andrea Ricci)

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