Daniel Riveong is one of our Emerging Fellows. He and our other Emerging Fellows will be posting throughout the year. His first article discusses the potential opportunities and risks that Bangladesh may face in a post-automation world.
The global textile industry is a lifeline for many of its 60 million workers throughout the world, especially in developing countries such as Bangladesh, and others like Vietnam and Cambodia. The optimistic capitalists among us see these factories as part of the age-old story of economic progress. They are the ladder of development. From Manchester during the Industrial Revolution to South Korea in the 1960s, their start in low-skilled textile manufacturing has been the gateway to greater economic development and prosperity. But will Bangladesh have a chance to climb up the same economic ladder?
Industry 4.0, which brings together AI and robotics, threaten to wipe away this very economic ladder. Already, the effects are being felt. According to the Bangladesh Institute of Labour Studies, “automation is mainly responsible for the shedding of workers” of over 800,000 garment-related jobs since 2013. Such job losses may only continue as China pursues greater automation, as evidenced by Guangdong province’s allotment of $150 billion USD to automate its manufacturing base.
The immediate risk is Bangladesh’s 3.8 million fabric workers (mostly women) and 80% of its annual exports. At stake is Bangladesh’s future: how else can it easy bring millions of jobs to its low-skilled workers? How else may it pursue more sophisticated industrialization and climb the economic ladder? What is the future of post-automation Bangladesh?
The competition of automation is not the only threat that Global South countries like Bangladesh face. There are secondary effects of automation, such decentralization, and shifts in consumer behaviors like the slow fashion movement. These trends will impact its economic options and ability to develop:
- Decentralization. Automation will enable greater decentralization and flexibility in global manufacturing. Addida’s first factory in Germany in over 20 years, called the Speedfactory, creates customized on-demand shoes using computerized knitting and high-tech additive manufacturing. It signals potential job losses for textile hubs like Bangladesh due to “insourcing” to advanced economic countries.
- Slow Fashion. How people view fashion has begun to change. Trends such as fair trade, eco fashion and most recently “slow fashion” have become more prevalent. Slow fashion advocates buying less, buying quality over quantity, and eschewing fast fashion by brands such as Zara. For export-focused industries, declining consumption – while beneficial for the environment – hampers economic productivity.
Sajeeb Wazed Joy, ICT Affairs Adviser to Bangladesh’s Prime Minister, has called for the country to meet the threat of automation by growing the ICT industry. While ICT-related skillsets are a sine qua non for the future, ICT alone is not a panacea to counter the impact that automation, decentralization, and slow fashion brings. Automation makes it difficult to produce jobs at scale, as witnessed in India, and can eliminate ICT-related jobs too. Decentralization challenges the need for specialized export-based hubs. Slow fashion is part of a larger trend of shifting away consumerism, lowering the demand for physical goods.
Yet, the challenge of automation is a profound opportunity. By taking away the “default” path of development – industrialization – the Global South has both the urgency and need to re-examine the most basic questions to reimagine our future:
- What is the economy for? How might we increase living standards without growing GDP?
- How might we provide jobs – or ways to improve people’s lives – at scale?
- How might we economically empower women? What readily-available jobs exist for women outside of textiles?
- And last, but not least: How can we better help the 800,000 displaced garment workers today? How will we help prepare the next 3,000,000 workers, when they become displaced?
The post-automation economy is already here and will impact the Global South the hardest. The Global South is both the most populous and vulnerable region, yet it is here that the future of capitalism and post-automation economics will be most urgent to explore and define. This is the world’s moment to redefine progress and economics in human-centric terms appropriate for each society.
© Daniel Riveong 2018