Global Development in the Age of Automation: Catapult or Detour?

Automated FactoryBy Jessica Davis Pluess

The Fletcher Forum of World Affairs

Earlier this fall, renowned physicist Stephen Hawking told readers on Reddit’s Ask Me Anything question series that despite machines having the power to enable humanity to enjoy a life of luxurious leisure, current trends point toward “technology driving ever-increasing inequality.”

Hawking joins a chorus of influential voices from academia and public and private sectors who express cautious optimism about this era of expansive technological change and its impact on quality employment and economic inequality. The growing sophistication and declining costs of technologies such as 3D printing, robotics, and the Internet of Things that define this new age of automation are changing the way goods are produced and delivered and, by extension, transforming labor markets around the world.  Experts point to labor’s declining share of GDP, structural unemployment, and rising economic inequality in many countries as signs that this transformation is underway. Some estimates suggest that more than 47 percent of the U.S. workforce is at high risk of automation.

The risks and opportunities of this era of technological change are important to consider from the viewpoint of low-skilled workers and vulnerable groups, particularly in developing and emerging economies. These groups make up a large portion of the workforce in global manufacturing and agriculture value chains – areas that are increasingly at risk of being replaced by machines. They also stand to gain the most from harnessing technology as a driver of economic opportunities and improved well-being.

Labor-intensive manufacturing has been an important engine of economic growth for many economies, such as Bangladesh, where the garment industry is the largest employer in the country. More than 3.5 million people work in the industry, 90 percent of them women. The industry helped reduce the poverty rate in the country from 56 percent in 1992 to less than 32 percent two decades later.

Technology has played an important role in the growth of these industries and economies. This era of technological progress could serve as a catapult for many developing countries, helping them leapfrog low-skilled manufacturing to create high value industries that meet the demands of an increasingly digitized and knowledge-based economy. This development catapult will create jobs as well: according to one study, over 1 million robot-driven jobs could be created by 2016. Research also shows that the Internet creates 2.6 jobs for every job lost to increased technological efficiency.

Continue to full article . . .

Picture: English: Cherie A. Thurlby [Public domain], via Wikimedia Commons

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