Countries like China and South Korea developed rapidly by making themselves into cheap manufacturing hubs for Western companies. Whether or not that’s the smartest and most human option for societies to develop, some economists question whether that route will even be possible for the next wave of developing nations in Latin America and Africa. Robots and other advanced machinery may mean that it’s just as cheap to make goods in America or Europe as it is to outsource overseas.
Robots are normally seen as threats to workers in advanced countries, but the risk may be at least as great in less developed places, according to a new report from the Overseas Development Institute (ODI), a London think tank. Looking specifically at the economics of manufacturing furniture, it finds that African countries will lose their labor-cost advantage relatively to advanced countries within 15 years.
“It has been thought that automation will not replace labor and export intensive manufacturing in poorer countries because of the high cost of robots,” says Dirk Willem te Velde, one of the authors of the report. “Our research shows that this is overly optimistic. Currently the cost of operating robots in furniture manufacturing is still higher than labor, but this will not be the case within 15 years.”
ODI encourages African countries to invest in industries that are less susceptible to automation, including food, beverages, garments, and metals and to improve digital skills in their workforces, so the digital divide between richer and poorer countries doesn’t expand any wider than it is now.
Some economists argue that threat of robots to employment is overhyped. It’s more likely that machines will replace some of the tasks that make up jobs than whole positions, they say. The argument against this is that robots are becoming more sophisticated–less like convenience-making helpers and more like sensing, thinking, acting humans. Developing countries tend to do less advanced manufacturing, making them particularly vulnerable to automation, it’s said. One analysis from Oxford University and Citigroup found that 87% of jobs in Ethiopia could be computerized within two decades.
Adidas, for instance, has developed two “speed factories” in Ansbach, Germany, and Atlanta, in the U.S., where it’s now 3D-printing shoes. The plants have resulted in 160 new jobs in those places, the report says, but also caused the loss of 1,000 jobs in Vietnam.