How Technological Innovation Will Drive a More Inclusive Economy
Some believe that technological change is driving economic inequality. We believe that innovation can, in fact, create a more inclusive and equitable global economy with changes that will far outlast the pandemic and our recovery from it.
The world has changed in incalculable ways in the past two years. Two phenomena have been especially notable to us at Franklin Templeton: Technological innovation has accelerated exponentially, and there has been an increased awareness of and concern about economic inequality.
Some believe that technological change is driving economic inequality. We believe that innovation can, in fact, create a more inclusive and equitable global economy with changes that will far outlast the pandemic and our recovery from it.
Historically, bursts of innovation have often led to an initial increase in inequality as some skills become more valuable and better compensated while others become obsolete. But over time, innovation has frequently led to productivity and wage growth resulting in broad-based higher living standards.
Today, innovation is changing financial services and has the power to increase access to investment opportunities and make financial expertise more equitable and broadly available.
As the trends show, more people will have access to investments previously available only to institutions and high-net-worth individuals. More people will have access to credit. More people will have increased financial literacy leading to greater savings and improved credit standing. And, perhaps best of all, the 2 billion people around the world who are underbanked will gain access to the global financial system.
Consider investments. Fractional shares have opened up higher yielding traditional investments to a broader population. Tokenization will likely enable individual investors to access the kinds of alternative asset classes previously available only to institutions and the wealthy. Digital innovation is enabling increased access to capital aimed at channeling investments from individuals and institutions into loans for small businesses run by underrepresented groups like women and people of color.
Consider credit. Data science is enabling new and better ways to assess the credit worthiness of potential borrowers, providing easier access to credit to a broader range of individuals and small businesses. Technology can help remove bias from lending, and with ongoing efforts to prevent embedded bias in algorithms, these innovations can be especially powerful in helping disadvantaged communities.
Consider the underbanked. In the United States, some companies are experimenting with digital technologies that offer low-wage workers flexibility in accessing their wages, essentially drawing portions of their paycheck as they earn it and when they need it, rather than waiting for fixed paydays—sidelining the predatory “payday loan” industry. Around the world, people in developing markets are gaining access to the financial system thanks to innovative startups, like a mobile phone-based money transfer service for payments and microfinancing in Africa. Crowdfunding platforms are providing people in emerging markets life-changing access to credit. New services are leveraging blockchain technology to help low-income people send and receive money across borders, improving speed and reducing fees for the millions of immigrants and their families who rely on remittances.
Consider, even, everyday financial responsibility. Digital innovations are helping nudge people to save for education or retirement with apps that enable them to save small amounts by rounding up purchases.
There are risks to digital innovation in financial services, of course. As access to complicated financial instruments like options is democratized, inexperienced investors can get caught up with risky investments like “meme stocks” and face dangerous exposure to high volatility. Crypto investing similarly exposes inexperienced investors to losses they might not be able to afford.
Another threat from digital innovation involves cybersecurity. As financial services firms provide greater online capabilities to clients, the risk of exposure to institutions and individuals from various kinds of cyberattacks grows. Users’ and policymakers’ strong expectations for the privacy and security of clients' data make this an important priority of digital innovation.
I am confident digital innovation in financial services, if guided correctly, will help to significantly boost the growth of new business and employment, expand access to economic opportunities to disadvantaged communities, and improve financial literacy and basic financial health.
Today’s innovation has real potential to yield tomorrow’s broadly shared prosperity.
You can read the article here: How Technological Innovation Will Drive a More Inclusive Economy
WHAT ARE THE RISKS?
This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice. This material may not be reproduced, distributed or published without prior written permission from Franklin Templeton.
The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice. The underlying assumptions and these views are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. There is no assurance that any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets will be realized. The value of investments and the income from them can go down as well as up and you may not get back the full amount that you invested. Past performance is not necessarily indicative nor a guarantee of future performance. All investments involve risks, including possible loss of principal.
Any research and analysis contained in this material has been procured by Franklin Templeton for its own purposes and may be acted upon in that connection and, as such, is provided to you incidentally. Data from third party sources may have been used in the preparation of this material and Franklin Templeton ("FT") has not independently verified, validated or audited such data. Although information has been obtained from sources that Franklin Templeton believes to be reliable, no guarantee can be given as to its accuracy and such information may be incomplete or condensed and may be subject to change at any time without notice. The mention of any individual securities should neither constitute nor be construed as a recommendation to purchase, hold or sell any securities, and the information provided regarding such individual securities (if any) is not a sufficient basis upon which to make an investment decision. FT accepts no liability whatsoever for any loss arising from use of this information and reliance upon the comments, opinions and analyses in the material is at the sole discretion of the user.
Products, services and information may not be available in all jurisdictions and are offered outside the U.S. by other FT affiliates and/or their distributors as local laws and regulation permits. Please consult your own financial professional or Franklin Templeton institutional contact for further information on availability of products and services in your jurisdiction.
精彩评论