Technology progression creates a policy dilemma

FE Online Desk | Published: July 25, 2017 12:30:08 | Updated: October 25, 2017 01:16:10

Since the inception of human civilisation, there has been relentless effort to find ways and means to delegate roles from humans to machines. Such role delegation has been the underlying fact of increasing productivity-leading to the growth of per person wealth creation. 

It's inevitable that such role delegation leads to job-loss, as machines are performing those delegated roles. New jobs are created in innovating, manufacturing and maintaining those machines. But these jobs are far less in number than those lost to machines on the factory floor. Of course, with the expansion of demand of consumption, new jobs are being created on the factory floor. In the past, new jobs created on the factory floor were far more than jobs lost to machines. But with the rapid progression of automation, the tipping point has been crossed. As a result, speedy technology headway has been taking away more jobs than it is creating. 

This reality has been the underlying cause of job loss in major industrial economies, like the USA. For example, although the USA did indeed lose about 5.6m manufacturing jobs between 2000 and 2010, but according to recent reports more than 80 per cent per cent of these job losses are actually attributable to technological change - largely automation. To deal with this situation, should nations reduce the technology progression or pursue protectionism? 

Developing nations have been facing another aspect of the puzzle. To benefit from industrial economy, developing countries, including Bangladesh, have been following liberal policy supporting the import of technology for adding labour in manufactured outputs. But the rapid progression of technology is reducing the demand of labour. For example, it has been reported that a Denim factory in Bangladesh has installed state-of-the-art production machinery, which needs 1 (one) person to operate in place of 11 persons required to operate previous generation production plant. With far less people, this production plant produces better quality fabrics at lower cost.  Should developing countries increase tariff on import of capital machinery to slow down the progression of substitution of labour with imported technology? If they do so, cost of manufactured outputs increases; as a result, the expansion of industrial activities slows down reducing the demand for labour. 

On the other hand, in developing countries the number of university graduates has been increasing. If these graduates are deployed on factory floor just to operate machines, investment in education does not produce worthwhile return. Both the time and money used to educate them turn out to be non-productive. To deal with the situation, should developing countries reduce the expansion of tertiary education? One of the options for higher value added engagement of these graduates could be to employ them in improving imported capital machinery further to improve the quality and reduce the cost of production. But such strategy reduces the demand for labour on the production floor.  

Technology progression has another dimension. Improved technology usually leads to lower wastage and less pollution-also contamination. For example, according to a report, an estimated 48 million Americans (1 in 6) get sick due to food-borne illness every year. By limiting human contact with food items, robots reduce the risk of contamination leading to food-borne illnesses. Such health issue is one of the reasons for rapid growth of the use of robotics in food industry, which is expected to experience 29 per cent compound annual growth rate from 2015 through 2019. Such advancement is going to cause job loss in food processing. Should we protect those jobs at the cost of human health?

 Similarly, it has also been found that almost 5 to 10 per cent food could be saved if human workers are replaced in the cutting section of the food processing, with robotised cutters. Should we keep wasting food to protect jobs? In Bangladesh's textile and ready-made garments industry, 10 to 12 per cent fabrics are being wasted due to defects. Such wastage could be substantially reduced by installing machine-based inspection systems at different stages of production, starting from cotton processing to finishing of final products. But such approach will reduce human jobs in performing inspection on the factory floor. The obvious question thus: should we protect human inspectors' jobs at the cost of wastage of fabrics? 

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