COVID-19 pandemic has virtually locked down the world. Starting from remote villages of Bangladesh to bustling cities like Dhaka or New York, human settlements are now deserted. Long before the enforcement agencies showed up on the streets to enforce isolation, most dwellers went into self-loneliness. People are scared of human presence, touch, or natural acts like sneezing. Borders are shut, and airports closed. Across the globe, academic institutions, restaurants, and hotels are shut. The global value chain is on a halt. At the pick of the advancement of science and technology like AI, Robotics, and connectivity, the human race as a whole is stunned to find it so vulnerable to invisible viruses. This sudden halt in our way of living, working, loving, and taking care of people, who are in need, will likely cause certain significant transformations.
TOUCH-FREE FOOD PREPARATION AND HOSPITALITY: Human touch is already known as a significant source of contamination in the food processing industry. To comply with health safety regulations, the US food industry has been experiencing the highest growth in robot densities among all major sectors. As opposed to the cost of labour, the cost of food safety will likely accelerate robotics and automation in the food processing industry all over the world. As a result, the labour advantage of developing countries will be experiencing accelerated erosion in the global food value chain. On the other hand, the hospitality industry comprising food preparation, serving, and accommodation will also increasingly rely on technology. Corona fear factor will make robots increasingly more attractive for preparing and serving food in restatements. Similarly, guests may find robots more welcoming than human beings in offering room services. Both the guests and service providers will prefer to have machines as a decoupling means to get the jobs done, whether for handling luggage, checking in/out procedures, or serving food.
FRAGMENTATION OF GLOBAL VALUE CHAIN: The economics of production has made the whole world a single value chain, highly integrated as well as optimised. Unfortunately, such optimisation has so far failed to take into consideration the single point of failure. COVID-19 has highlighted the severity of such a failure. Wiping out trillions of dollars from the global stock market just over a couple of weeks and imperiled future of millions of SMEs are ringing the alarm bell of the vulnerability of such a global value chain. It's likely that post-corona world will leave no stone unturned to find means of decoupling from global value chains and focus on developing local ones. It happens to be that starting from 3D printing to collaborative robotics will provide a helping hand in this mission of addressing the single point of failure. On the one hand, globalisation of value chains fueled the growth of super-rich people in the developed world. On the other hand, it offered millions of industrial jobs to developing countries. The global value chain fragmentation is both a threat and an opportunity for developing countries.
WEAKENING OF LABOuR-BASED ECONOMY: The value chain of any product begins with R&D in advancing science and technology leading to product innovation. Globalisation of value chain starting from innovation, production to consumption found low-cost labour of developing countries like Bangladesh, Vietnam, or Indonesia an economically attractive production factor. As a result, the labour force of these countries got linked with the global value chains, creating industrial jobs. Such jobs became a vital contributor to the uplifting of these countries' economic status, and also reducing poverty. Development planners, bureaucrats, and policymakers alike found it an easy means of driving economic growth. To leverage it, they started borrowing and investing in developing infrastructure and special economic zones to be preferred labour suppliers to the global value chains, whether for producing shirts or shoes. Labour-saving technologies driving the fourth industrial revolution will likely complement the coronavirus fear to take production closer to consumption, leaving the economic model of labour suppliers to the global value chain in peril.
ON-LINE EDUCATION: Since the inception of formal education, delivery of educational services has remained the same. Students are supposed to show up in classrooms, and teachers to engage in the process of peeling knowledge layer by layer so that learners can absorb them. Although we have replaced chalk with a marker pen, blackboards with white ones, and overhead projectors with PowerPoint presentation, the core technique remains the same: teachers and students must be in the same room. Although there have been many attempts starting from computer-based education to MOOCs, disruption force could not keep gaining momentum. The decision of academic institutions and policy makers as well as regulatory bodies all across the world to take refuge to on-line means to connect students and teachers appear to add momentum to technology forces like augmented and virtual reality, visualisation, interactivity, and connectivity to cause disruption to campus-based localised educational service delivery. In contrary to the value chain of physical products, the service value chain will likely experience a push to be globally integrated, though with decreasing human role.
ELDERLY AND HEALTH CARE ROBOTICS: Over the decades, the aging world led by Japan has been experiencing labour shortage to look after the growing elderly population. Most of the advanced countries have also been burdened with the increasing cost of healthcare. To address it, technology is being researched. Particularly, Abenomics has given special emphasis on developing elderly care robotics. But, care receivers, particularly the elderly, were rejecting them as they did not have human-like empathy and warmth. But to counter COVID-19, healthcare professionals in China found mobile robots as useful means in delivering medicines and foods safely. Due to health concerns, it's expected that the future will be more welcoming to robot caregivers.
SLOWING DOWN WORKFORCE MIGRATION: Countries like Bangladesh or the Philippines have been blessed with workforce migration. Remittance sent by them has become the single most important income source for these countries. But during this corona crisis, these countries are finding themselves in a mess to address health concerns brought by the surge of returnees. For example, Bangladesh has become overwhelmed to look after more than half a million returnees within just a couple of months -- many of them from highly infected countries.
FEELING THE NECESSITY OF LOCAL IDEA ECONOMY: In the midst of the shutdown of the global value chain, people are looking for a remedy from local ideas. For example, the invention of a quick corona testing kit by a local health institution has become a ray of hope for the people of Bangladesh. But they need to wait for weeks to get the supply of ingredients to deploy the idea in action.
It seems that the plain and simple economics of globalisation of the value chain has placed the world in a highly vulnerable situation. On the one hand, there has been high vulnerability due to the risk of a single point of failure. On the other hand, developing countries have overlooked their roles across the value chain. Their development strategy of supplying labour neither offers sustainable growth path, nor is it immune to the risk of failure. In the age of the fourth industrial revolution, advanced countries are desperately working on technology to reduce their dependence on low-cost labour. It's time for developing countries to focus on the whole chain to meet their aspirations to keep growing.
M. Rokonuzzaman, Ph.D is academic and researcher on technology, innovation and policy.
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