UN report warns economic transitions risk widening inequality

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UN warns of transition inequality

Highlights

UN report warns that major economic transitions risk deepening inequality for vulnerable groups without immediate government action to ensure social inclusion.
UN urges investment in continuous training, digital infrastructure and affordable internet to address labour market disruptions, digital divides and renewable energy transitions.
Guterres highlights that nearly half the world's poorest countries face debt distress risks, calling for fulfilment of financing commitments and reforms to international financial institutions.

UN recommendations on inclusive economic transitions

As reported by UN News, a new report from the UN Department of Economic and Social Affairs says governments need to act quickly to ensure major economic transitions do not leave vulnerable communities behind. The report identifies women, young people, older persons, persons with disabilities, migrants, Indigenous Peoples and low-income groups as among those most exposed to being excluded from the gains of technological and structural change.

The report says benefiting from these shifts often requires specialised skills and access to modern technologies, raising the risk that existing inequalities will deepen. It argues that social inclusion is not only a moral obligation but also an economic necessity because broader access to jobs, skills and services can expand the productive workforce, strengthen human capital and support innovation.

UN Secretary-General António Guterres says in a video message for the report's launch that inclusive societies are more productive, resilient and prosperous. The report adds that delays in expanding inclusion can make it harder for excluded groups to catch up later, especially when they remain outside education, labour and digital systems during periods of rapid change.

Policy pressures for labour markets and developing economies

The report urges governments to invest in continuous training and reskilling as artificial intelligence reshapes labour markets, rather than focusing only on the creation of new jobs. It also says the shift to renewable energy should include retraining, alternative employment and social assistance for workers and communities that depend on fossil fuels.

To narrow the digital divide, the UN calls for wider affordable internet access, stronger digital infrastructure and technology training, particularly in disadvantaged areas. It also recommends moving beyond GDP as the main measure of progress and giving more weight to indicators such as poverty reduction, access to education and healthcare, employment security, inequality and environmental protection.

The report says financing remains a major obstacle for many developing countries. Guterres warns that nearly half of the world's poorest countries are either in debt distress or at high risk of it, with interest payments relative to revenue at their highest levels in a generation, and he calls for commitments under the Doha Political Declaration on Social Development and the Sevilla Commitment on financing for development to be honoured, alongside reforms to international financial institutions.

In our earlier article on AI raising the cost of standing still for companies, we explored how rapid adoption is resetting competitive baselines and making “average” performance less sustainable. We noted that firms increasingly need to rethink investment priorities, workforce skills, and decision-making to stay relevant as automation and data-driven tools spread.

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