“To date, the gains and pains of globalization and automation have been felt mostly by the manufacturing sector. In the future, the gains and pains will be felt by […] service-sector jobs. That’s because digital technology is going to lower the third constraint to globalization as arbitrage: the cost of moving people around, or facilitating face-to-face interaction.

Service jobs have been shielded from globalization because they require people to be face-to-face, or at least near each other. For most services, you can’t put them into a container and ship them from China to New York. So global competition was deflected by the shield of high face-to-face costs.

Digital technology, however, is opening a pipeline for direct international wage competition. In other words, labor from countries such as Kenya, Nigeria, or the Philippines can come and work in G7 offices directly through telecommunications.”