Eradicating poverty and income inequality in a Hi-tech Era

Dr. Alfred Mak

This is the introductory part of the series of articles I am prepared to share with readers my view concerning the impact of technological change on wealth and income distribution in this hi- tech era, and how we should make sense of the more pertinent issues related to the topic. This part essentially highlights the effect of groundbreaking development in scientific and digital technologies, which not only has greatly improved our standard of living, turned the world into one global village, but also has brought us a series of problems, which, if continues to proliferate, will harm mankind’s sustainable development in the long run.

Subsequent issues of this series will discuss how technological development vis-à-vis globalization impacts on our economy and the way we live, not the least including its effects on income inequality, wealth gaps, solutions as proposed by NGOs concerned, and counter-actions being taken by governments in major cities, including the place where we live – Hong Kong.

As a starting point here, it is perhaps appropriate to first give meaning to the nature of technological development. To the ordinary folks, the term sounds positive as it implies progress of humankind. The concept is much vaunted by most nations, who see it as a reliable way for improving our living, mitigating poverty, or connecting people more quickly and efficiently irrespective of their locations. With it, we now generally live a much better life than our fore- generations. Not only are we able to enjoy a higher living standard, better health care, convenient travels, but also, for most of us, shorter working hours. The effect of fast developing digitization since the turn of the century is especially pronounced when a paradigm shift is underway in shaping how we work, communicate, and entertain ourselves. Indeed, as the world is embracing what K Schwab (2016) has called the fourth industrial revolution, advances in technology notably provide us with new capabilities, which change hugely the mode we work and relate to one another. Never before can automation and digitized machines find solutions for us at much higher accuracy and speed, or people interact so conveniently and frequently through the internet. New ways of using technology has in fact modified extensively our systems of production, consumption behaviour as well as our mode of living. These changes are extraordinary in terms of their size, speed and scope.

Despite all this, there are downside stories. Achievements in science and technology come at a cost, as they give rise to problems that impact adversely on human sustainable development. In fact, same as our fore-fathers, we similarly meet with challenges, differing only in nature and scope. For example, global warming continues to deteriorate despite promises from world powers for better control. Incidents of environmental pollution increase across the globe, especially in developing countries. Meanwhile, income inequality, as measured through the Gini coefficient for disposable income, continues to surge both in advanced economies and emerging markets and developing countries (EMDCs) (IMF, 2015). Not surprisingly, the wealth gap between the rich and the poor in these places has never been greater. According to Suisse’s Global Wealth Report 2015, half of all assets around the world are now controlled by the richest 1% of the global population, while “the lower half of the global population collectively own less than 1% of global wealth. In the USA, the top 1 percent of American households now collects around 21 percent of household income, which amounts to around 15 percent of GDP (Sachs 2011: 229). As recent data has revealed, inequality is only getting worse: the top 1 percent captured 95 percent of income growth from 2009 to 2012, if capital gains are included (Piketty, 2014). In China, its Gini Index rose from approximately 30 in the 1980s to over 45 by 2010 (Solt, 2014). Locally, the number of poor households in Hong Kong is on the rise, with the richest in the city now earning about 29 times what the poorest get, and more than 1.1 million people live in poverty despite efforts by the government to help the impoverished (OHK Poverty Report 2015). The belief that technological progress leads to the triumph of human capital over financial capital, and skill over nepotism at least seems contestable, if not illusory.

In view of the magnitude of the problems these changes have brought to us, we really need some soul searching about the role technology plays in our modern societies. While we applaud the unprecedented speed of scientific and technological development, realizing that human civilization ought to move forward without turning back, we must invest attention and energy to face new challenges that lie in the path of development. We all are stewards of our children for sustained development. Agreeably, we are also rested with the responsibilities of ensuring them a sustainable future so much so that our achievements today not only facilitate us in passing down to our future generations a renewed version of knowledge and culture, but more importantly, a better place to live.

At this point, it seems that we are now locked in a dilemma, being constrained by a binary choice between ‘accept and live with it” or “reject and live without it”? Certainly, whichever way we choose to answer this, we need reasons for support. But if we agree that technological change and scientific developments are nothing but the natural products of human progress, we have to make choices anyway and contribute as citizens, government officials and business leaders to design systems that will ensure benefits and minimized risks for mankind. For this to happen, we certainly need concerted efforts to create new systems with common values and clear purpose that will benefit us all on this planet.

Inasmuch as sustainable development is a broad topic touching on a wide range of issues, I shall in the next issue focus discussion on ‘why’ and ‘how’ advances in technology impact on distribution of wealth. Sensing and detecting drivers responsible for the increasing wealth gap and the continued existence of poverty not only is enlightening, but also gives us reasons and strength to convince policy makers, community leaders and NGO executives to properly address inequality and poverty in the new global economic order.


  • 樂施會《香港貧窮狀況報告(2011-2015)》,
  • 國際貨幣基金組織 2015 環球財富報告  IMF (2015). Causes and Consequences of Income Inequality: A Global Perspective, June 2015, International Monetary Fund.
  • Credit Suisse, Global Wealth Report 2015, Oct., 2015.
  • Piketty, Thomas (2014). “Capital in the 21 Century", Harvard University Press.
  • Sachs, Jeffrey (2011). “The Price of Civilization”, Economics and Ethics after the fall. London: Bodley Head.
  • Schwab, Klaus. (2016) “The Fourth Industrial Revolution.” New York: Crown Business.
  • Solt, Frederick (2014) “The Standardized World Income Inequality Database,” working paper SWIID, Version 5.0, October, 2014.
  • Stiglitz, Joseph (2013). “The price of inequality”. England; Penguin Books

About the author

Dr. A. Mak was a senior civil servant and later a NGO director before retirement. He is presently an honorary lecturer/tutor at a few tertiary institutions.