Should-Read: Jörg Mayer: Industrial robots and inclusive growth

Should-Read: Jörg Mayer: Industrial robots and inclusive growth: “Robots are not yet suitable for a range of labour-intensive industries…

…leaving the door open for developing countries to enter industrialisation processes along traditional lines. At the same time, it suggests ways that developing countries should embrace the digital revolution….

Assessments of the employment impact of robots have generally been based on a task-based approach, which hypothesises that a job is composed of different tasks and that new technology does not always favour better-skilled workers but often complements workers in certain tasks of their job, while substituting for them in others (Autor et al. 2003). This approach distinguishes between manual, routine, and abstract tasks…. Routine-task intensity indices, which link routine tasks to occupations that workers perform on their jobs…. Studies indicating robots’ dramatic job displacement potential… emphasise this technical feasibility of workplace automation….

The technical feasibility of job displacement in manufacturing is highest in food, beverages and tobacco, followed by the textiles, apparel and footwear sector…. Job displacement by robots is more profitable in relatively skill-intensive and well-paying manufacturing, such as the automotive and electronics sectors, than in relatively labour-intensive and low-paying sectors, such as apparel. The sizes of the bubbles reflect the sectoral distribution of actual global robot stocks in 2015…. Taken together… economic factors are more important for robot deployment than the technical possibilities of automating workers’ tasks…. Robot deployment has remained very limited in those manufacturing sectors where labour compensation is low, even if these sectors have high values on the routine task intensity index….

[This] suggests that robot-based automation per se does not invalidate the traditional role of industrialisation as a development strategy for lower income countries. Yet the dominance of robot use in sectors higher up on the skill ladder implies greater difficulty for latecomers in attaining sectoral upgrading and may limit their scope for industrialisation to low-wage and less dynamic (in terms of productivity growth) manufacturing sectors. This could seriously stifle these countries’ economic catch-up and leave them with stagnant productivity and per capita income growth…