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The Rise of the Robot Reserve Army: Automation and the Future of Economic Development, Work, and Wages in Developing Countries

Author

Listed:
  • Lukas Schlogl

    (King’s College London)

  • Andy Sumner

    (King’s College London)

Abstract

Employment generation is crucial to spreading the benefits of economic growth broadly and to reducing global poverty. And yet, emerging economies face a contemporary challenge to traditional pathways to employment generation: automation, digitalization, and labor-saving technologies. 1.8 billion jobs—or two-thirds of the current labor force of developing countries—are estimated to be susceptible to automation from today’s technological standpoint. Cumulative advances in industrial automation and labor-saving technologies could further exacerbate this trend. Or will they? In this paper we: (i) discuss the literature on automation; and in doing so (ii) discuss definitions and determinants of automation in the context of theories of economic development; (iii) assess the empirical estimates of employment-related impacts of automation; (iv) characterize the potential public policy responses to automation; and (v) highlight areas for further exploration in terms of employment and economic development strategies in developing countries. In an adaption of the Lewis model of economic development, the paper uses a simple framework in which the potential for automation creates “unlimited supplies of artificial labor” particularly in the agricultural and industrial sectors due to technological feasibility. This is likely to create a push force for labor to move into the service sector, leading to a bloating of service-sector employment and wage stagnation but not to mass unemployment, at least in the short-to-medium term.

Suggested Citation

  • Lukas Schlogl & Andy Sumner, 2018. "The Rise of the Robot Reserve Army: Automation and the Future of Economic Development, Work, and Wages in Developing Countries," Working Papers 487, Center for Global Development.
    • Handle: RePEc:cgd:wpaper:487
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    Cited by:

    1. Finkelstein Shapiro, Alan & Mandelman, Federico S., 2021. "Digital adoption, automation, and labor markets in developing countries," Journal of Development Economics, Elsevier, vol. 151(C).
    2. Gearoid Millar, 2021. "Ambition and ambivalence: Reconsidering positive peace as a trans-scalar peace system," Journal of Peace Research, Peace Research Institute Oslo, vol. 58(4), pages 640-654, July.
    3. Melia, Elvis, 2020. "African jobs in the digital era: Export options with a focus on online labour," IDOS Discussion Papers 3/2020, German Institute of Development and Sustainability (IDOS).
    4. Giuntella, Osea & Wang, Tianyi, 2019. "Is an Army of Robots Marching on Chinese Jobs?," IZA Discussion Papers 12281, Institute of Labor Economics (IZA).
    5. Pablo Casas & José L. Torres, 2023. "Automation, automatic capital returns, and the functional income distribution," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 32(1), pages 113-135, January.
    6. Bronwyn McCredie & Kerrie Sadiq & Larelle Chapple, 2019. "Navigating the fourth industrial revolution: Taxing automation for fiscal sustainability," Australian Journal of Management, Australian School of Business, vol. 44(4), pages 648-664, November.
    7. Federico S. Mandelman & Alan Finkelstein Shapiro, 2019. "Digital Adoption, Automation, and Labor Markets in Developing and Emerging Economies," FRB Atlanta Working Paper 2019-22, Federal Reserve Bank of Atlanta.
    8. John Gilbert & Reza Oladi, 2021. "Labor‐eliminating technical change in a developing economy," International Journal of Economic Theory, The International Society for Economic Theory, vol. 17(1), pages 88-100, March.
    9. Theo Papaioannou, 2020. "Reflections on the entrepreneurial state, innovation and social justice," Review of Evolutionary Political Economy, Springer, vol. 1(2), pages 199-220, August.
    10. Theo Papaioannou, 2021. "The Idea of Justice in Innovation: Applying Non-Ideal Political Theory to Address Questions of Sustainable Public Policy in Emerging Technologies," Sustainability, MDPI, vol. 13(5), pages 1-14, March.
    11. Cock, James & Prager, Steven & Meinke, Holger & Echeverria, Ruben, 2022. "Labour productivity: The forgotten yield gap," Agricultural Systems, Elsevier, vol. 201(C).

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