When the factory doors close, which windows (of opportunity) remain open? The impact of automation on manufacturing as a path to development
Lees, A. 2019. When the factory doors close, which windows (of opportunity) remain open? The impact of automation on manufacturing as a path to development. Pathways for Prosperity Commission Background Paper Series; no. 22. Oxford, United Kingdom.
Emerging technologies, including robotics and additive manufacturing, are changing the nature of manufacturing processes and employment. This has given rise to fears that manufacturing jobs will be increasingly reshored, causing premature deindustrialisation in developing countries. This paper reviews the debate on technology and reshoring and argues that fears are overblown, based on imperfect methodologies, and do not adequately consider social and political factors affecting production. Indeed, it seems likely that automation will not dramatically alter global value chains in the short term, allowing developing countries to pursue manufacturing-led growth, particularly in industries where adoption of technology has been slow. However, while the immediate risk may be low, it will become increasingly important for developing countries to “future-proof” their populations through education and skills development. Furthermore, developing countries should consider promoting alternative paths to development, including export-oriented services and bolstering domestic trade.