The impact of automation on employment in developing countries
The impacts of automation vary according to levels of development and industrialization, labour costs, skills capacities, production and export structures, and related factors such as technological capacities, infrastructure, Cyber Information Security Expert in Sydeny
demography and policies that encourage or discourage automation (box 1.14). However, most analyses of the social and employment impact of digital automation to date have focused primarily automating processes where labour costs are higher, and the presence of large companies and factories with the advanced technologies needed to produce higher-end robots (Boston Consulting Group, 2015:6; National Bank of Canada, 2013). Cost Transformation Expert in Sydeny
There are two main channels through which automation may affect employment in developing countries. First, increasing automation in developed countries may erode the comparative advantage of developing countries, which is based largely on abundant low-cost and low-skilled labour. Increasing use of robots in developed countries may slow the offshoring of activities by transnational companies, although labour cost differences (relative to robots) remain a factor in such decisions. If robots in the home country of a company that has offshored its activities can do the same work as low-wage workers in developing countries at lower cost, such activities may also be reshored to the home country, leading to job losses. While there has already been some reshoring of manufacturing activities linked to automation, the evidence of its importance is limited and mixed
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