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The Middle-Income Trap 2.0: The Increasing Role of Human Capital in the Age of Automation and Implications for Developing Asia

Linda Glawe and Helmut Wagner

No 15/2018, CEAMeS Discussion Paper Series from University of Hagen, Center for East Asia Macro-economic Studies (CEAMeS)

Abstract: We modify the concept of the middle-income trap (MIT) against the background of the Fourth Industrial Revolution and the (future) challenges of automation (creating the concept of the "MIT 2.0") and discuss the implications for developing Asia. In particular, we analyze the impacts of automation, artificial intelligence, and digitalization on the growth drivers of emerging market economies and the MIT mechanism. Our findings suggest that improving human capital accumulation, particularly the upgrading of skills needed with the rapid advance of automation, will be key success factors for overcoming the MIT 2.0.

Keywords: automation; AI; human capital; middle-income trap; developing Asia; economic development; economic growth; employment (search for similar items in EconPapers)
JEL-codes: J24 O10 O11 O15 O33 O47 O53 (search for similar items in EconPapers)
Date: 2020, Revised 2020
New Economics Papers: this item is included in nep-big, nep-gro, nep-knm, nep-pay and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ceames:152018

DOI: 10.18445/20190124-114606-0

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