Dear Ms Glennerster,

As the world advances further, with the world’s richest people just getting richer while the poor’s

wages stagnate, it is increasingly vital that governments battle rising global inequality to increase

productivity and improve living standards for everyone. We can take the USA as an example. As

shown in Figure 1, the wealth of the top 1% in America has soared over the past thirty years with

the bottom 50% remaining the same. To combat global inequality, governments should raise

spending on education, give more support to smaller entrepreneurs and invest in tech companies

to create more jobs.

Figure 1 (FRED, 2020)

One of the primary factors of global inequality is the shortage of people with secondary

education, let alone university education. Figure 2 shows that millions of children are kept out of

school, either to work at home or out of an inability to afford education. For more children to

receive education, governments need to make secondary education free for everyone. Making

secondary education free for all children will create a wider pool of skilled employees to further
contribute to economic growth. The world’s most developed countries all have free schooling

and some have even moved onto free university for citizens, with Norway offering free

university to non-citizens (UIB, 2019). Through increasing spending on education, a government

can decrease future inequality.

Figure 2 (SDG4, 2018)

Additionally, governments should encourage innovation by supporting smaller entrepreneurs.

More support will incentivise people to create new technology to solve their own problems, such

as lack of clean water or electricity. One example of this is William Kamkwamba, who was

incentivised to build a windmill to supply his family with electricity to eliminate the need for
kerosene, which was inadequate and expensive (Kawkwamba). Moreover, more entrepreneurs

will benefit the country in the long run by setting up their own firms, employing more people,

allowing the government to collect more taxes, reducing unemployment and heightening GDP

(Seth, 2021). Entrepreneurs will also bring more advanced methods of energy usage with their

new innovations, As shown in Figure 3, the world’s most innovative economies are also some of

the world’s richest countries. This proves that the more a country encourages innovation, More

tax revenue for governments will mean they can spend more on education, healthcare and

decreasing inequality.

Figure 3 (Jamrisko et al, 2021)

Finally, governments should invest in technology to create more jobs for workers and decrease

inequality. The technology industry has proven resilient, growing constantly for years and
shrugging off COVID-19. If a government invested in technology by subsidising training and

providing them with more capital stock such as factories to build their products in, a firm would

be incentivised to produce more goods for a higher profit, thus needing to hire more workers,

who will incur no extra cost for the firm to train due to the government subsidising training. In

addition, the implications of investing in technology will be vast, with a government able to

collect more tax revenue from the company and the employees to continue investment and firms

in a position to increase research in making more advanced devices for cheaper prices. As shown

in Figure 4, technology has grown by billions in the last few years. Moreover, Figure 5 displays

how the profits of tech companies such as Microsoft, Apple or Facebook grew during

COVID-19, seeing increases in the hundreds of billions, with Figure 6 showing that the global

tech industry is worth nearly 4 trillion dollars. With how the world is moving more towards

technology every year, it is likely that jobs will keep growing, creating more opportunities for

employment and reducing inequality.

Figure 4 (Richter, 2019)

Figure 5 (Richter, 2020)
 Figure 6 (Statista, 2020)

In conclusion, global inequality is an issue that will vastly damage the potential for future

economic growth, but can be combated by governments instituting various policies, raising

spending on education, industries and supporting entrepreneurship. These policies will bring

benefits to consumers, firms and the government, aiding wealth distribution and increasing tax

revenue.
 References

FRED (2020) Total Net Worth Held by the Top 1% (99th to 100th Wealth Percentiles) and Total

Net Worth Held by the Bottom 50% (1st to 50th Wealth Percentiles) [online]. Available at:

https://fred.stlouisfed.org/graph/?g=CVHV. (Accessed: 22 Mar 2021)

Jamrisko, Michelle and Lu, Wei and Tanzi, Alexandre. (2021) South Korea Leads World in

Innovation as U.S. Exits Top Ten [Online]. Available at:

https://www.bloomberg.com/news/articles/2021-02-03/south-korea-leads-world-in-innovation-u-

s-drops-out-of-top-10?sref=fDPa8NQZ. (Accessed: 13 Mar 2021)

Kawkwamba, William. William Kawkwamba [Online]. Available at:

https://williamkamkwamba.typepad.com/about.html. (Accessed: 9 Mar 2021)

Richter, Felix. (2019) How Big Are the "Next Big Things" in Tech? [online]. Available at:

https://www.statista.com/chart/10692/emerging-tech-sales-in-the-us/. (Accessed: 19 Mar 2021)

Richter, Felix. (2020) Tech Giants Shrug Off COVID-19 Crisis [online]. Available at:

https://www.statista.com/chart/21584/gafam-revenue-growth/. (Accessed: 19 Mar 2021)

SDG4 (2018) New education data for SDG4: Focus on out-of-school children, 27 September

2018 [online]. Available at:

https://www.sdg4education2030.org/new-education-data-sdg4-focus-out-school-children-27-sept

ember-2018. (Accessed: 14 Mar 2021)

Seth, Shobhit. (2021) Investopedia [Online]. Available at:

https://www.investopedia.com/articles/personal-finance/101414/why-entrepreneurs-are-importan

t-economy.asp. (Accessed 12 Mar 2021)

Statista (2020) Global business and government purchases of tech goods and services by

segment from 2016 to 2021 [online]. Available at:

https://www.statista.com/statistics/269635/worldwide-spending-on-ict-products-and-services-in-

2017/. (Accessed: 19 Mar 2021)

University of Bergen. (2019) University of Bergen [Online]. Available at:

https://www.uib.no/en/education/109728/norway-offers-tuition-free-quality-education.

(Accessed: 6 Mar 2021)