For several years now, many voices have been warning of the need for new reforms to establish the base of the expansion. The main argument, based on solid and unquestionable historical experiences, is that without reforms it is not possible to increase productivity or reduce economic and social deficits in a sustained manner. However, it is important to take into account the technological changes under way to achieve greater coherence in the reformist agenda and improve its impact.
The priorities can not be the same as in the last century, marked by the globalization of the economy, a process of international economic integration that intensified after the fall of the Berlin Wall. A context conducive to reforms to enhance investment in capital goods, in sectors where the comparative advantage of each country resided, making the markets for goods, services and labor more flexible, raising the level of education and compensating the victims of globalization – vulnerable collectives and low-skilled.
With the digital revolution and artificial intelligence, the context varies radically, demanding new objectives for reforms. Now, the value lies in virtual transactions and reputational capital. The most benefited are the large technology services companies, which concentrate a great market power derived from their intangible assets, which is reflected in numerous benefits close to a monopoly situation. The proper functioning of the economy requires, more than flexibility, protection of the conditions of competition, allowing the emergence of competitors and facilitating the diffusion of technological progress. The exponential growth of digital transactions also erodes the fiscal base of the States, something worrisome for the Spanish Treasury, gripped by debt.
Likewise, we are witnessing a "atomization" of work, which differs from the processes of adjustment between sectors characteristic of the era of globalization splendor (job losses in industries in decline and gains in sectors with comparative advantage in each economy). Today, outsourcing processes cross all sectors without exception, the result of digital technology and robotics. The result is an erosion of the model of full-time work, in one place and for a single company. The work is individualized and new forms appear, such as the dependent self-employed, job nomadism (combining "traditional" employment with another activity), or work platforms that connect directly with the final consumer. The objective of the policies is not so much to make an atomized labor market more flexible, but to facilitate mobility and protect all the employed, regardless of their status in employment.
On the other hand, education is no longer a panacea. Technology reduces the demand for intermediate-rated jobs, producing a phenomenon of polarization that is also beginning to be felt in Spain. Robots are unbeatable to develop complex but automatable tasks, so that educational reform will have to promote the acquisition of skills that complement the algorithms.
Polarization is also perceived as a threat to the middle classes as reflected by the revolt of yellow vests in France. All this contributes to the emergence of populism and protectionism.
In short, technological change, due to its disruptive nature, raises the need for a new reformist agenda, which enhance the innovative and creative capacity of the country, fight against technological oligopolies and facilitate the development of skills that complete the advance of robotics. The reforms can guide technological change towards the satisfaction of collective goods such as the fight against climate change and precariousness. The tax system, adapted to an economy based on companies located in the national territory, has to evolve to cover the growing flow of digital transactions without borders. For labor reform, the challenge is to accompany mobility while avoiding polarization. The task is colossal, in addition Spain part with some disadvantage. But we will recover the lost ground if we act with promptness and perseverance, adapting the reforms to the technological mutation.
Raymond Torres is director of Conjuncture of Funcas. On Twitter, @RaymondTorres_