A highlight from Outsourcing, automation and the messiness of global labour

Future Tense
|

Automatic TRANSCRIPT

Losing industry all over the country and they're moving to moving to other places a lot of moving to mexico. Don't underestimate it's like the new china on a smaller level but like the new china so we will bring our jobs back sean. We're going to bring our jobs. Assures you're sitting that we are going to bring our jobs back into this country for the first it's a popular populace narratives built on people's fees about the offshore outsourcing of jobs and the rise of automation. Those fees may be well placed but our understanding of the specifics of outsourcing and automation is fuzzy to say the least blurred by political spin industry. Mistreats and media hype. Hello antony fennell here. Welcome is always to future tense. The reality as we'll say is that the globalized labor market is far more interesting complicated and messy than one might imagine. Let's start with the labor cost advantage for decades now. Companies in the rich west have been moving their operations to developing countries in order to drive down their labor costs. A country like china for example attracted considerable foreign investment because wages were low but that dynamic has begun to shift dr chris hartley assistant professor of asian and policy studies at the education university of hong kong. Well i think labor cost advantages. Getting wiped out and automation is one component of that. Of course there are other forces that are prompting that as well it. Coastal china as productivity per worker has increased so to have wages per worker. And that's why we've seen a bit of an exodus of the very low. Skilled manufacturing jobs from china already and even from northeast asia two parts of southeast asia with labor cost structure is very low so i think that's certainly one element is kind of a natural evolution of incomes gradually increasing especially in least developed countries. But i also think of course that automation is is certainly playing a big part as well obviously producers face labor costs is one of their most significant input costs. They're interested in replacing those not only with cheaper ways of producing things but also sort of more reliability regularity etc. That obviously can be programmed into automation. That sort of may take more effort or have less predictability when dealing with humans so as these jobs kind of move off to southeast asia. We have to wonder and then other parts of the developing world. We have to wonder what point those countries are going to lose their labor cost advantage and as we have seen a situation in which those labor cost advantages are actually producing momentary gains for countries. But many of these countries will not see those kind of labor cost advantages in the long run and we call upon them therefore to parlay those momentary advantages and the economic gains from those advantages into investment in education infrastructure and those other types of things that will allow them to capture the mid level or high value added production that they may be competitive for the future and yet we know from the experience i india or the philippines that there are lots of people with pilot degrees. Who even currently at the moment can't find employment so a focus on employment and upskilling as they often say is not necessarily the full answer. Is it no absolutely. I mean even breakdown types of skill levels in inter variety of different ways you can think of routine cognitive routine manual non-routine cognitive and non routine manual or whatever of ways. You want to look at that. And it's sort of the the non-routine cognitive jobs at an increasing. Since the nineties and the non-routine manual whereas retain cognitive oath routine types have been stagnant. So this is kind of a structural challenge that is not unique to the western world and certainly in india where increasing percentage of the population is being college educated and is going onto a into a labor market that needs to produce eight million jobs a year just to maintain current employment levels. The situation is fraught and we see this in china as well college degree is certainly no guarantee of economic mobility and underemployment will be a substantial in places like this. They're sort of numerous forces. That are behind this. And another thing that i i like to consider in terms of assuming that the market will continue to provide jobs for mid and high school level are the constraints to growth itself so the limits to growth include population growth but also including logical constraints as well which i think should be a conversation that's had in conjunction with automation in this whole transformation of labor because we can't assume that as has happened since the early twentieth century that we're going to have the kind of population explosion. We had the kind of explosion in quality of life in coming out of poverty et cetera. The twenty-first central quite a different story. And we have to consider not only sort of ecological population strengths to deb. What we consider the political outcomes it as well to something. We're very interesting in the latest density of robot wick index released by the ifi the international federation of robotics south korea is at the top and the us is at number six. China often self described as the world's factory comes in at number fourteen but automation in the people's republic is rapidly rising says the ifi's suzanne bela. It's quite way down has called up a lot in the past years and what comes. Additionally is that you have many. Many workers in manufacturing industry china has huge share of workers in manufacturing industry As a lot of still manual work. So there's a lot of work still done manually. So the rumour density gives you good feeling. How industrialized or how. Robo times the country is having a huge growth rate overall. compound annual growth rate in past

Coming up next