Asian countries like China and South Korea developed rapidly by offering cheap labor to western companies. But, because of advanced technology, that path to growth may not be open to the next wave of emerging economies from Latin America and Africa. According to a new report, these countries are threatened by "premature deindustrialisation," whereby low-skill jobs disappear before low-income countries get rich.
That dark prediction comes from Carl Benedikt Frey and Michael Osborne, two Oxford University researchers. Back in 2013, they received attention for saying that 47% of U.S. jobs are susceptible to "computerization" over the next two decades. Now they widen that research and find that poorer economies are even more threatened than richer ones.
"Industrialization is likely to yield substantially less manufacturing employment in the next generation of emerging economies than in the countries preceding them," they say in a joint Oxford-Citigroup publication. "Increased automation in low-wage countries, which have traditionally attracted manufacturing firms, could see them lose their cost advantage and potentially lose their ability of achieving rapid economic growth by shifting workers to factory jobs."
The analysis is based on what can and can't be done by machine learning and artificial intelligence. It assumes that certain routine manufacturing jobs can be done by robot, but that most engineering tasks—which require creativity and social intelligence—aren't yet ready to be automated. Eighty-five percent of employment in Ethiopia is automatable, the report says, 77% in China, 69% in India, and, at the least automatable end, 58% in Uzbekistan (we're not sure what makes the Uzbeks more resilient to robots).
Just because something is automatable doesn't mean it will be automated. It's possible to distribute cash using ATMs, for instance, yet there are three million cashiers still employed in the U.S. But the analysis suggests next generation emerging countries will have to develop differently, offsetting losses in low-skill employment with investment in higher-skill employment instead.
See the full report here: It contains more dystopian stuff about the impact of new tech on labor markets.
Slideshow Credits: 01 / Baloncic via Shutterstock;