- Increased use of robots in developed countries erodes traditional labour-cost advantage of developing countries.
- Labour-intensive manufacturing in large developing countries with domestic production linkages is unlikely to be reshored to developed countries.
- Whatever the impacts, outcomes will be shaped by policies.
- Developing countries need to redesign education policies and embrace the digital revolution – this approach should be combined with supportive macroeconomic, industrial and social policies.
Industrialization has historically been synonymous with development, while
deindustrialization is a well-established trend in mature developed economies as they
move towards services-based economies. Yet recent trends show that many developing
countries – especially in Africa and Latin America – have witnessed their shares of
manufacturing employment and output shrinking long before they have attained income
levels comparable to those in the developed world. Such premature deindustrialization
began during the adjustment programmes in the 1980s and 1990s, yet has continued, as
commodity booms and speculative financial inflows have led to currency appreciation
and a loss of manufacturing competitiveness, compounded by the rise of China’s
manufacturing exports. The current question is therefore: now that the commodity bonanza
is over, capital flows are reversing and China is turning towards a more balanced growth
path driven more by domestic demand than exports, how can Africa and Latin America
reignite industrialization? Whatever the chosen strategy, it will have to account for the
rapidly increasing spread of new automation technologies and artificial intelligence in the
form of robots.
And here’s the full report (PDF):