As artificial intelligence, automation and the energy transition reshape economies, a fundamental contradiction is emerging: technological capabilities have never advanced so rapidly, yet a substantial share of the world's population still lacks the means to participate in this transformation. Beyond industrial and digital investment lies a deeper question: could social protection become one of the defining economic infrastructures of the twenty-first century?

In October 2026, as governments and major corporations accelerate investment in artificial intelligence, data centres, electricity networks and industrial capacity, the United Nations published a report that challenges some of the assumptions underlying contemporary economic policy. Entitled World Social Report 2026: The New Economics of Social Inclusion — Making Transformations Work for All, the document advances a proposition whose implications extend well beyond conventional social policy: an economy cannot sustainably transform itself if a substantial proportion of its population remains unable to participate in that transformation.

The figures illustrate the scale of the challenge. In 2025, approximately 58% of the world's workers were employed in the informal economy. Among women aged 15 to 24, 27% were neither employed nor engaged in education or training. Nearly 2.2 billion people remained without Internet access, while more than fifty countries experienced rising income inequality between 2000 and 2024, including twenty-three high-income economies.

Together, these figures describe a world in which productive capabilities are modernising considerably faster than the economic and social integration of populations. They also reveal a weakness rarely incorporated into major industrial strategies: technological progress can expand an economy's production potential without ensuring that society possesses the skills, institutions and mechanisms necessary to absorb its consequences and distribute its benefits.

The question is therefore no longer simply how much an economy can invest in physical and digital infrastructure. It is also what proportion of its population will actually be able to use that infrastructure, contribute to its development and benefit from the wealth it generates.

An Incomplete Understanding of Productive Wealth

For decades, economic policy has largely prioritised investments whose effects are directly visible in national accounts: roads, ports, power stations, industrial equipment, telecommunications networks and, more recently, digital infrastructure. These assets share an important characteristic: their contribution to production can generally be identified, measured and incorporated into calculations of economic returns.

Social protection, by contrast, has traditionally been approached primarily as a fiscal expenditure. Pensions, family benefits, healthcare insurance and unemployment support appear in public budgets, frequently at the centre of debates over deficits, taxation and debt sustainability.

This accounting perspective is not incorrect, but it is incomplete.

A healthier population can remain economically active for longer and work under better conditions. Accessible education expands the available pool of skills. Well-designed unemployment insurance can allow workers to search for positions better suited to their qualifications rather than immediately accepting less productive employment. Continuing education and professional retraining facilitate transitions between industries.

These mechanisms do not necessarily produce immediate gains. Instead, they gradually influence the quality of human capital, labour mobility, innovation capacity and the resilience of the productive system.

There is therefore a fundamental distinction between social expenditure that temporarily compensates for lost income and institutional investment that permanently improves a population's capacity to participate in economic activity. Both functions can complement each other, but their economic effects are neither identical nor automatically positive.

Programme design, financing arrangements, targeting and integration with labour markets largely determine their effectiveness.

The significance of the United Nations report lies precisely in this shift in perspective. Social inclusion is no longer treated merely as a secondary benefit of economic growth, but as one of the conditions that can make such growth sustainable.

The Paradox of Technological Acceleration

Artificial intelligence makes this question particularly urgent.

Major industrial transformations have always altered the structure of employment. Agricultural mechanisation reduced demand for labour in rural areas. Industrialisation moved millions of workers into factories. Computerisation transformed administrative, financial and commercial occupations.

Today's technologies, however, possess a distinctive characteristic: they can simultaneously transform activities that were previously considered fundamentally different, from repetitive production tasks to intellectual functions once regarded as relatively insulated from automation.

Automation no longer concerns only physical operations. It increasingly extends to document analysis, programming, accounting, customer service, industrial design and certain research activities.

This does not mean that every occupation exposed to automation will disappear. Most professions involve several tasks, some of which can be automated while others become more important. Artificial intelligence may therefore eliminate certain functions, transform others and generate entirely new demand for skills.

Nevertheless, even when the overall employment balance remains positive, transitions can be profoundly uneven.

Companies that control advanced technologies may capture productivity gains relatively quickly. Workers whose qualifications become less valuable, meanwhile, must bear adjustment costs that can be substantial. Benefits may become concentrated among a limited number of firms, regions or professional categories, while disruption spreads much more widely.

This is where social protection acquires a different economic function.

A worker with healthcare coverage, a minimum degree of income security and meaningful access to retraining can approach professional transition with greater flexibility. Someone without these safeguards may remain trapped in a declining occupation or be forced to accept precarious working conditions.

Social protection can therefore become a mechanism that facilitates the reallocation of labour towards more productive activities.

The objective is not to preserve every existing job indefinitely, which could obstruct necessary economic transformation, but to protect individuals while productive structures evolve.

This distinction is essential. An economy capable of supporting professional transitions may prove more adaptable than one in which every technological disruption directly threatens basic living conditions.

The Informal Economy: An Invisible Frontier of Modernisation

The persistence of informal employment represents one of the greatest obstacles to this transformation.

According to International Labour Organization data, 57.9% of employed people worldwide worked informally in 2025, compared with 57.4% in 2015. Over a decade marked by digital expansion, infrastructure development and improvements in numerous economic indicators, the proportion has barely declined.

Regional disparities remain considerable. Informal employment accounts for approximately 88.6% of total employment in the least developed countries, 87.6% in sub-Saharan Africa and 83.9% across Central and Southern Asia.

These figures describe more than administrative differences between registered and unregistered workers. They reveal economic structures in which a substantial share of the population remains outside conventional insurance, financing, training and professional representation mechanisms.

Informality encompasses highly diverse situations: small family businesses, subsistence agriculture, independent commerce, domestic work, unregistered urban activities and wage employment without effective legal protections.

It does not necessarily imply an absence of productivity or income. However, it complicates the accumulation of continuous social entitlements, access to credit and the implementation of public policies based on reliable information.

For governments, this creates a difficult cycle.

A large informal economy constrains tax collection. Limited fiscal resources restrict the financing available for public services and social protection. Inadequate services, in turn, perpetuate insecurity and may discourage economic formalisation.

The arrival of new technologies does not automatically break this cycle.

A digital platform can improve market access while leaving workers in legally precarious situations. Electronic payments can make transactions more traceable without guaranteeing healthcare coverage or pension rights. Artificial intelligence can improve the efficiency of a small business without changing the institutional conditions under which it operates.

Technological modernisation and economic formalisation are therefore distinct processes.

Bringing them together requires appropriate policies: administrative simplification, proportionate taxation, access to financing, portable social entitlements and protection mechanisms that do not depend exclusively on conventional salaried employment.

In many emerging economies, developing accessible protection systems for self-employed workers could become an essential condition of productive modernisation.

Digital Access Does Not Guarantee Inclusion

The expansion of Internet connectivity illustrates another contradiction.

According to the International Telecommunication Union, approximately six billion people used the Internet in 2025, representing nearly 74% of the global population. The number of users has increased considerably since 2020, yet around 2.2 billion people remain offline.

This exclusion is not evenly distributed. It primarily affects low- and middle-income countries, rural territories and populations with limited financial resources.

Physical connectivity, however, represents only the first stage.

An unaffordable connection, inadequate equipment, unstable coverage or insufficient digital skills can prevent meaningful economic participation. Being connected does not necessarily mean being able to complete professional training, work remotely, access administrative services or use advanced artificial intelligence tools.

As technologies become more sophisticated, this distinction grows increasingly important.

A company with structured data, qualified employees and computing resources can rapidly integrate artificial intelligence systems. A small enterprise lacking these capabilities may remain excluded, even if Internet access is theoretically available.

The risk is one of cumulative advantage.

Already productive businesses become more efficient through new technologies. Their profitability facilitates further investment, reinforcing their lead. Conversely, less-equipped firms and workers struggle to overcome the initial barriers to adoption.

Productivity disparities can consequently widen without technology itself being the sole cause.

Education, vocational training, energy infrastructure and access to suitable financing become decisive variables.

The digital divide may therefore increasingly evolve into a productivity divide.

The Economic Cost of Exclusion

The United Nations report presents a particularly significant estimate: in the countries covered by its simulations, delaying certain social protection investments by ten years could generate potential production losses of up to 12% compared with earlier intervention.

This figure requires careful interpretation. It is neither a global forecast nor a systematic annual loss, and it cannot be applied indiscriminately to every country. It is a modelling result that depends on the assumptions employed and the economies examined.

Nevertheless, it illustrates an important economic mechanism: social inaction can generate cumulative costs.

When a child leaves school prematurely, the consequences extend beyond the immediate loss of education. They can affect future qualifications, earnings, health and labour-market participation for decades.

When an adult postpones medical treatment because of financial constraints, an initially manageable condition can develop into a lasting disability, reducing economic activity and increasing subsequent healthcare expenditure.

When unemployment persists without adequate support, skills can deteriorate, professional networks weaken and prospects for reintegration diminish.

These mechanisms become particularly important in economies undergoing rapid transformation.

Exclusion is not merely an unequal distribution of growth benefits. It can reduce the effective supply of labour, constrain human capital accumulation and slow the adoption of innovation.

At the national level, these losses are frequently dispersed across government departments and generations. They rarely appear as a single identifiable budgetary cost.

This makes them politically difficult to address.

Investment in a power station can be associated with measurable generating capacity. Preventive healthcare or continuing education produces more diffuse benefits, some of which may only become visible years after implementation.

Yet the absence of immediate visibility does not imply the absence of economic returns.

The Climate Dimension of Economic Vulnerability

The energy transition introduces another layer of complexity.

Transforming energy production and consumption systems requires substantial investment in electricity networks, industrial equipment, transport and buildings. It also changes the geography of employment, production costs and demand for skills.

Some regions benefit from emerging industrial activities. Others may lose jobs associated with fossil fuels or technologies that are gradually being replaced.

Meanwhile, the physical consequences of climate change disproportionately threaten populations that already possess limited resources.

The 2025 Global Multidimensional Poverty Index, published by the United Nations Development Programme, estimates that approximately 1.1 billion people experience acute multidimensional poverty. The World Social Report 2026 indicates that 887 million of them are exposed to at least one major climate hazard.

Exposure does not mean that every individual will necessarily experience a disaster. It does, however, demonstrate the considerable overlap between poverty and climate-related risks.

Drought can reduce agricultural income and trigger population displacement. Flooding can interrupt business activity, damage infrastructure and disrupt access to education. Heatwaves can reduce labour productivity, particularly in outdoor occupations.

When households lack financial reserves or insurance mechanisms, a temporary shock can produce lasting consequences: the sale of productive assets, indebtedness, interrupted schooling or forced migration.

Social protection then functions as an economic stabiliser.

Rapid cash transfers, appropriate insurance mechanisms, resilient healthcare systems and employment programmes can help prevent temporary disasters from becoming permanent impoverishment.

Social policy thus intersects with climate policy, not only through its humanitarian dimension but also through its ability to preserve productive potential.

Three Development Trajectories

The implications of this approach differ considerably across economic structures.

In advanced economies, where social protection systems are generally more developed, the principal challenge concerns adaptation to changing labour markets. Population ageing, the expansion of certain forms of independent employment and automation place simultaneous pressure on tax revenues, social expenditure and training systems.

The objective is not simply to increase budgets. It is to improve institutional capacity to support less linear careers, more frequent professional transitions and evolving qualification requirements.

In emerging economies, the challenge is different.

Industrialisation, urbanisation and digitalisation can advance rapidly while insurance systems remain incomplete. The central difficulty is extending coverage without imposing costs on businesses and workers that discourage formalisation or investment.

These countries sometimes possess significant demographic advantages, but demographic potential does not automatically translate into growth. A young population becomes an economic asset only when education, infrastructure, healthcare and employment opportunities allow its capabilities to be mobilised.

In the least developed countries, constraints are more fundamental.

Weak public revenues, debt burdens, dependence on commodities and infrastructure deficits limit the ability to invest simultaneously in productive equipment and essential services.

Budgetary choices become especially difficult when immediate needs are considerable.

Nevertheless, systematically opposing industrial investment and social investment would be misleading.

Transport infrastructure becomes less productive when businesses lack qualified workers. Education generates fewer economic benefits when graduates cannot find employment. Healthcare systems cannot function effectively without reliable energy, equipment and trained personnel.

These investments are complementary.

Economic development depends on their interaction rather than the absolute superiority of one category of expenditure over another.

Financing and Institutional Capacity

Recognising the productive dimension of social protection does not automatically resolve the question of financing.

Governments face genuine constraints: public debt, ageing populations, limited tax revenues, competing budgetary priorities and growing investment requirements.

An increase in social expenditure financed through unsustainable borrowing can weaken the economy it is intended to support. Poorly designed taxation can discourage investment or formal employment. Insufficiently targeted programmes can absorb substantial resources without significantly improving productive capabilities.

Institutional quality therefore becomes decisive.

Governments must distinguish legal entitlement from effective access, measure effects on employment and income, reduce administrative costs and evaluate outcomes over the medium and long term.

Digital technologies can help improve efficiency.

Social registries, identification systems, electronic payments and administrative interoperability can, when properly designed, reduce certain costs and accelerate access to benefits.

However, they also introduce new risks: exclusion of people without digital access, identification errors, technological dependence, excessive surveillance and violations of data privacy.

Administrative efficiency cannot therefore be separated from the protection of individual rights.

At the international level, development financing presents another constraint.

Countries with the greatest social needs are frequently those facing the highest borrowing costs.

Debt-service relief, access to concessional financing, stronger tax-collection capacity and investment in essential infrastructure can help expand their fiscal room for manoeuvre.

Yet no international financial architecture can permanently substitute for national institutions capable of designing, implementing and evaluating public policy.

From Redistribution to Adaptive Capacity

One of the most important intellectual shifts involves moving beyond the traditional opposition between economic efficiency and social protection.

That opposition often rests on a static understanding of economic activity: production first creates wealth, a portion of which is subsequently redistributed to correct inequalities.

In an economy undergoing continuous technological change, however, the distribution of resources also influences future productive capacity.

Access to education determines the availability of skills. Healthcare security affects labour-force participation. Disposable income influences consumption, savings and, in some cases, the ability to undertake entrepreneurial risks. Professional training determines how rapidly technologies spread across an economy.

The relationship between growth and inclusion therefore operates in both directions.

This does not mean that every form of social expenditure automatically generates growth. Trade-offs remain necessary, and poorly designed programmes can produce unintended consequences.

But an economy that persistently neglects the capabilities of its population may ultimately constrain its own development potential.

This perspective also requires reconsidering the meaning of competitiveness.

Competitiveness does not depend exclusively on labour costs, corporate taxation or access to capital. It also depends on a society's ability to educate workers, diffuse innovation, prevent prolonged interruptions to economic activity and maintain an institutional environment sufficiently stable to encourage investment.

Social protection consequently becomes one component of collective adaptive capacity.

The Risk of Technologically Advanced but Socially Narrow Growth

Artificial intelligence could substantially expand productive possibilities across numerous industries. Decarbonised energy systems could transform comparative advantages between countries. Industrial automation could reshape factory location decisions and global value chains.

None of these developments, however, automatically guarantees a widespread improvement in living standards.

An economy can become more efficient while concentrating its gains among a limited number of companies and territories. It can experience productivity growth without equivalent increases in median incomes. It can possess sophisticated digital infrastructure while leaving part of its population without access to essential services.

The risk is the emergence of economies that are technologically advanced but socially narrow, capable of producing more without proportionately expanding participation in wealth creation.

Over time, this divergence can also weaken institutional stability.

When the benefits of transformation appear concentrated while its costs are broadly distributed, confidence in economic institutions may deteriorate.

Social tensions are not merely political concerns. They can influence investment behaviour, reduce policy predictability and complicate the implementation of necessary industrial transformations.

Social cohesion does not guarantee economic growth. Its deterioration, however, can increase the cost of achieving it.

The ability to organise economically viable and socially manageable transitions is therefore becoming a strategic capability in its own right.

The Infrastructure National Accounts Struggle to Capture

The World Social Report 2026 arrives at a moment when major economies are attempting to secure supply chains, strengthen technological autonomy and mobilise substantial capital for energy, industry and artificial intelligence.

These priorities are essential. They respond to profound changes in international competition and the conditions of production.

Yet they sometimes obscure a less spectacular reality: no infrastructure can generate its full economic value independently of the people who build, operate, maintain and adapt it.

A data centre may require billions of dollars in investment. Its economic contribution nevertheless depends on the existence of companies capable of using its services and workers possessing the necessary qualifications.

A new factory may incorporate the most advanced equipment available, but its competitiveness remains closely connected to workforce training, health and stability.

Social protection does not replace capital, energy or physical infrastructure. It helps establish the conditions under which these resources can be used effectively by a broader share of society.

The challenge therefore extends beyond poverty reduction.

It concerns the ability of governments to transform technological progress into sustainable economic progress, limit the loss of human potential and maintain sufficiently broad participation in productive transformation.

Countries that successfully establish this connection will not necessarily be those that spend the most, but those that manage to combine physical investment, skills development, effective institutions and protection adapted to emerging forms of employment.

Economic history has long been told through machines, resources, infrastructure and capital. The next phase of transformation may bring renewed attention to a less visible reality: a society's productivity also depends on what it enables its people to become.

As technology accelerates, the ultimate constraint on economic development may no longer lie solely in the capacity to innovate, but increasingly in the capacity to ensure that populations can participate in innovation.

Social protection is not an alternative to economic modernisation. When properly designed, it can become one of the conditions for its success.

Main Sources

  1. United Nations Department of Economic and Social Affairs (UN DESA) — World Social Report 2026: The New Economics of Social Inclusion — Making Transformations Work for All, October 2026.
  2. International Labour Organization (ILO / ILOSTAT) — The World of Work and the 2030 Agenda: A Ten-Year Review, 2026.
  3. International Telecommunication Union (ITU) — Facts and Figures 2025.
  4. United Nations Development Programme (UNDP) — Global Multidimensional Poverty Index 2025.
  5. United Nations — As Societies Transform, People Are Falling Behind, with Rising Costs of Exclusion, October 15, 2026.