INTAL has launched a new publication on the future of employment. The study contains contributions from 40 international experts.
Will robotization destroy or displace jobs or will it create new, more sustainable ones? What skills will be needed in the future? Can technological change play a part in reducing inequality in Latin America and the Caribbean? How can we bring the multilateral trade negotiations agenda up to speed with new technological realities?
These are some of the key questions that 40 international experts responded to in “Robotlution. The Future of Work in Latin American Integration 4.0.” The report was officially presented on August 23, 2017, at the INTAL/IDB auditorium in Buenos Aires. (Download the publication)
Argentina’s chief of staff, Marcos Peña, praised the initiative in his welcome video and said that “this book provides many tools that can help us take the challenges of the future and those of the present.” He added that “we need to take this sort of analysis to the G20 summit to ensure that our region has a voice in the process of re-examining education and work in the 21st century.”
Ambassador Pedro Villagra Delgado, Argentina’s sherpa to the G20, said that new technologies are opening up extraordinary opportunities for those countries that are currently lagging most behind in development terms. “They can rapidly incorporate these new forms of production and improve their people’s welfare, which is what this is all about. The world is changing fast and there will be disruptions that will affect the future of employment,” he said.
From Washington DC, the manager of the IDB’s Integration and Trade sector, Antoni Estevadeordal, analyzed the effect that advances such as 3D printing, the Internet of Things, big data, or cloud computing will have on logistics, storage, trading goods, and other core components of trade policies. Mr. Estevadeordal said that “at INTAL, we have been observing for years how disruptive technological changes modify the classic negotiation parameters of trade agreements. Bringing ongoing negotiations in line with new technological demands could promote export diversification in Latin America.”
The publication was presented by INTAL/IDB director Gustavo Beliz, who stressed the need for a new “sociotechnological contract” to enable the region to make the most of the opportunities that new technologies bring, generate high-quality jobs, and incentivize the creation of skills that will allow it to successfully transition to a digital economy. Mr. Beliz underlined that the multiplier effect for each technological job creates an additional 4.9 new jobs. “We need new metrics for measuring automation, which would be a fundamental tool for states in making decisions and designing policies to shape a future that is not something out of science fiction but is already here among us,” he concluded.
High-profile global experts took part in the presentation, including Jacques Bughin, director of the McKinsey Global Institute; Irmgard Nübler, coordinator of the Technology, Structural Transformation, and Jobs program at the International Labor Organisation (ILO); Tang Jun, researcher at Zhejiang International Studies University; Lydia Harriss, adviser to the House of Commons Science and Technology Committee; Miguel Acevedo, president of the Argentine Industrial Union; Beatriz Nofal, director of the consultancy firm Eco-Axis; and Eduardo Levy Yeyati, dean of the School of Government at Torcuato Di Tella University.
After the opening panel, Mr. Bughin summarized the main findings of the study that he contributed to Robotlution. He argued that private companies could play a key role in education and that learning-by-doing is fundamental for innovation. “This is why we need to take care of the private sector and not leave education exclusively in the hands of the public sector. Companies know the problems that they are facing and the best ways to solve them,” he explained. He also summarized the conclusions of the recent McKinsey report on artificial intelligence, which shows that productivity increases will allow several sectors to create value and new jobs. “Latin America’s productivity has grown at an annual rate of just 0.4% in the last 50 years, so there is enormous potential if the region decides to really pursue productivity,” he concluded.
Irmgard Nübler from the ILO highlighted the importance of work that builds socially supportive jobs and insisted that work is much more than a source of income: “it is a form of connection with others, the scaffolding for social ties, and a source of dignity.” For these reasons, she suggested that universal basic income could be a remedy for technological unemployment. “Latin American countries have a lot to learn from Asia, especially if they are to increase the complexity of their production systems, which is what has enabled Asian countries to be the global leaders of the electronics market today,” she emphasized, adding that of the five countries with the highest robot density per industrial workers (more than two robots per hundred workers), three are in Asia: South Korea, Japan, and Singapore. Ms. Nübler argued that capacity building is the key to navigating these new trends in production in which automation and artificial intelligence are playing a growing role.
Cambio en la complejidad económica en Asia y Sudamérica
Lydia Harriss commented that the British Parliament has a special interdisciplinary group of scientists working on the challenges that the automation of tasks and jobs may bring. “We have put together three special committees, one on robotics and artificial intelligence, another on digital skills, and a third to debate the scope of a universal income.” According to the specialist, many jobs that are at risk of being automated include education professionals, the healthcare economy, domestic work, and accounting and financial services, among others. “We run the risk of the salary gap growing along with inequality, which is why Parliament has decided to pay particular attention to these phenomena and invest resources to get a better sense of what is going on,” she said, and also mentioned that Parliament has earmarked £100 million for researching new rules and regulations for autonomous vehicles.
Tang Jun commented on the implications of the Made in China 2025 plan and insisted that automation is seen in a positive light in his country. China currently manufactures one out of every five robots that are built in the world. “The annual growth rate for robot sales in the country is averaging 12% and it is estimated that figures will reach 130,000 units per year in late 2017,” he said.
The second panel included Ady Beitler, integration specialist at the Inter-American Development Bank, who commented that many of the changes that new technologies are bringing are inevitable, as are factors related to climate change and population, so we should be prepared to adapt to them. “It’s not a bad idea to think about what happened to the dinosaurs every now and then. We need to realize as soon as possible that the situation has changed to ensure that we don’t miss out on the opportunities that these new circumstances are bringing,” he concluded.
During the closing panel, Eduardo Levy Yeyati and Miguel Acevedo talked to Gustavo Beliz. For Mr. Levy Yeyati, the key issue is generating a consensus around the redistribution of the benefits that come with increased productivity due to automation. “The accumulation of wealth is recessionary because the rich save. It is the poor who spend most of their income and who feed demand and consumption,” he explained while arguing that we should welcome the automation of many jobs. “Perhaps those of us in this auditorium are used to thinking about work as professional careers, but the truth is that most jobs are heavy going and largely unpleasant. It would be good for robots to do them. I would lean toward doing pilot projects to see how universal basic income works all toward reducing the working day,” said Mr. Levy Yeyati, who teaches at the Torcuato di Tello University.
From the world of industry, Mr. Acevedo described how washing machines that are connected to cell phones are already being manufactured in Argentina’s Córdoba province, an example of industry 4.0 that includes the Internet of Things. “It is a real data revolution, both for consumers and manufacturers, who are getting an increasingly better idea of what the market’s needs are,” he said. Mr. Acevedo agreed with the need to invest in education: “We need more and better engineers to lead this technological process.”
Robotlution also includes articles from international experts such as Nobel laureate Robert Aumann, Carl Frey and Daniel Susskind (Oxford University), Alan Krueger (Princeton), Dani Rodrik (Harvard), John van Reenen (MIT), Arun Sundararajan (New York University), José Manuel Salazar-Xirinachs (ILO), Anders Samuelsen (Denmark’s minister of foreign affairs), and Manuel Blum (Carnegie Mellon University), among others.
The publication’s main conclusions are as follows:
. Fine-tuning metrics: we need to build new metrics for monitoring the impact of innovation on employment, as the differences in current estimates of the share of jobs that robots will replace range from 5% to 47%, depending on the method used. Impact assessment studies also need to consider the indirect creation of new jobs.
. Granular information: the probability of jobs being automated varies by country, sector, and the features of each population. For example, this risk is as high as 82% for the agricultural sector in Uruguay and is greater among people with lower levels of formal education, young people (between 15 and 30 years of age), and men. In Argentina, it is 76% for the transportation sector.
. Concentration: Switzerland and Germany are the two European countries with the most robots per industrial worker (more than two per hundred workers), although they are still outranked by Korea and Japan. In Latin America and the Caribbean, Mexico and Brazil are leading the way in the use of robots, although with between 0.1 and 0.2 robots per 100 workers, they are still far behind more developed countries.
. Trade 4.0: bilateral exports in the automotive sector have grown by 2% for each 10% increase in robot numbers despite the incentives for firms to reshore their operations. The technological divide between countries that sign a trade agreement with clauses on technology transfer and scientific or production-related cooperation may shrink by up to 15%.
Through this publication, INTAL, which is part of the IDB’s Integration and Trade Sector, is contributing to building a regional agenda which will monitor the impact of new technologies on employment, production, and trade, and take the necessary steps toward mitigating potential negative impacts of the technological revolution while building on the benefits that it may bring.