BCG warns growth no longer delivers jobs
Income gap hit 8.4 times in developed economies as labour demand shifts unevenly.
Economic growth no longer translates reliably into job creation and broader opportunity, as policymakers reassess how to pursue growth and employment, according to a Boston Consulting Group (BCG) report.
The firm said disruption from automation, inequality, demographic change, and climate pressures has weakened the link between rising output and improved livelihoods, requiring a shift in how progress is measured and how growth is pursued.
The shift follows signs that gross domestic product no longer captures economic opportunity, with BCG citing data from the Organisation for Economic Co-operation and Development showing that the average income of the richest 10% in developed economies was 8.4 times that of the poorest 10% in 2021.
BCG outlined a framework built on five pillars: new metrics for multidimensional growth, labour force resilience, wider access to infrastructure and finance, human-centred innovation, and enterprise-led expansion.
It added that governments and companies should test policies at a small scale before scaling them.
Advances in artificial intelligence (AI) and automation have increased output whilst reducing labour demand in some roles, with gains from new jobs unevenly distributed.
At the same time, ageing populations and smaller workforces have strained pension systems and limited access to stable employment, whilst climate-related disasters have disproportionately affected low-income communities.
Changes in global supply chains have also favoured countries with stronger infrastructure and skills, leaving others more exposed to shocks, the report said.
Under the framework, policymakers would expand the use of indicators such as job quality, social mobility, regional activity, and public trust alongside economic output.
Governments have begun incorporating such measures into budgeting and planning through well-being indicators and cross-department scorecards.
The report also proposes policies to support continuous reskilling, including subsidies, tax credits, and digital platforms that match training with labour demand.
It cited measures such as apprenticeships, return-to-work programmes, and skills-based hiring, whilst portable benefits could support workers across different forms of employment.
BCG also called for expanding access, noting that 2.7 billion people remain outside the digital economy and many lack access to banking services. Public-private partnerships and regulatory reforms aim to address these gaps.
The framework includes oversight of AI to manage risks and limit bias, alongside aligning technology investment with broader economic access.
BCG said companies would be expected to expand access to products, services, and markets, particularly for small and informal enterprises.
Policymakers face trade-offs in applying these measures, including balancing carbon pricing with energy costs, labour flexibility with job stability, and the pace of AI adoption with risk controls.
