Robots & Algorithms: Long Term Threats to Developing Countries?

Self-checkout machines at supermarkets replace human workers
Self-checkout machines at supermarkets replace human workers

Software substitution, whether it’s for drivers or waiters or nurses … it’s progressing… 20 years from now, labor demand for lots of skill sets will be substantially lower. I don’t think people have that in their mental model.
– Bill Gates


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Microsoft co-founder Bill Gates to George Mason University economist Tyler Cowen have been sounding the alarm that many professional jobs will be replaced by software automation.

The great challenge is not how Developed Countries will deal with software automation, but how will Developing Countries like Indonesia (with a booming population of over 250 million) find economic growth when competition will come from relentless, scalable, and cheap computer software and robotics.

Software is Eating the World…and your job

Secretaries and Travel Agents have all disappeared, what's next?
Beyond Mad Men. Secretaries and Travel Agents have nearly all disappeared, what’s next?

We have already seen smartphones and the internet replacing many office jobs in the United States – from travel agents to office secretaries. Google and Uber are working on self-driving cars, potentially displaying jobs for truck drivers, taxi drivers, to valet drivers.

What jobs are next? Automation already threatens many professional jobs:

Automated Journalism: Since 2011, journalists have been talking about Narrative Science a firm that uses software to writing both sports and financial articles for the like of Forbes Media.

Legal Services: In 1978, it cost CBS USD 2.2 million to hire an army of lawyers to shift through 6 million documents as part of legal discovery process. In 2011, Blackstone Discovery, a legal software firm, can easily analyze millions of documents for about 20% of the cost and at fraction of the time. (source)

Automation will test our cognitive limits

“Go back to the history of the loom. There was absolute dislocation, but I think all of us are better off with more mechanized ways of getting clothes made.” – Eric Schimdt, Chairman of Google

A common refrain from technologist is that jobs replaced by automation – be it truck drivers, factory jobs or even legal services – will produce new jobs and leave overall society better  off, just like during the Industrial Age (1760s to 1840s).

It now takes years of training and schooling to secure these newer knowledge-intensive jobs, which are also fewer in number. Even today, we cannot expect everyone who lost their job as an salesman at RadioShack or Tesco today to be able to become Big Data Scientist by tomorrow or even next year.

Can we expect the workers of the world to make the cognitive leap to higher skilled and higher specialized job that will remain for humans?

Will everyone want to or be cognitively able to enter into the remaining jobs available? Will everyone have the opportunity to become a material scientists, human-centered design experts, or specialize in bioinformatics?

Can Developing Countries afford Basic Minimal Income?

Savione a robot butler being tested in California, to steal human jobs
Savione a robot butler being tested in California, to steal human jobs

With automation threatening jobs from checkout clerks at supermarkets to office jobs, the idea of a Basic Minimal Income has become a constant discussion to address both wealth inequality and lack of jobs as automation takes over.

In 2014, Switzerland was the first to test this idea with a proposal for unconditional guaranteed basic income of (2,500 Swiss francs or USD 2,800 per month) for all Swiss citizens. The measure failed to pass but marked the first time basic income because a point of serious political and social discussion.

But will countries like Ethiopia or Bangladesh (with 90 and 157 million people respectively) be able to avoid a comprehensive Basic Minimal Income?

How Can the Developing World Compete Against Robots?

Over 28 million people live in Jakarta metro area. Can they survive the robot revolution?
Over 28 million people live in Jakarta metro area. Can they survive the robot revolution?

Discussions about the software automation and robotics have been focused on the Developed World: United States, Europe, Japan, South Korea, Australia et cetera. But what of the Developing World?

Recent developed countries like Japan, South Korea, and Singapore had their start as export oriented economies. China, still a developing country, has become an economic powerhouse as the world’s workshop. These countries used export-focused manufacturing as a springboard in to professional industries (aka creative & knowledge economies).

We have the majority of the world population in developing countries like Nigeria (183 million), Indonesia, (255 million), Pakistan (188 million), Philippines (100 million), and not to speak of China and India as well. How will countries like Indonesia and Pakistan compete as an export economy or knowledge economies when robots excel in both manufacturing and knowledge worker (aka professional) jobs?

Can countries like Indonesia provide Basic Minimal Income to those who cannot enter manufacturing jobs, service jobs, or professional jobs? How can Developing Nations compete with robots taking over manufacturing jobs, robots taking over service jobs and robots taking over the jobs of lawyers and writers?

If tablets replace servers, what will immigrant workers do?
If tablets replace servers, what will immigrant workers do?

While thought leaders look at the impact of robots and automation in the Developed Countries, there are still 108 Developing Countries and that are looking for economic growth. Technophile’s dream about “Post Labour Scarcity” economics as discussed now will not help the Developing world.

Where does this leave Developed Countries?

How would you advise developing countries like Indonesia prepare for the coming onslaught of robots and software automation?

Is it reasonable for countries like the Philippines or Indonesia to strive for economic development? Should developing countries forsake hopes to become a based for manufacturing or professional services, and focus on sustainable social welfare instead?

Should only countries like the United States and the like reap the benefits of Post-Labour Scarcity?


 

Image Source:

  1. Martin Alexius, “Trans Jakarta in Car Free Day event”, https://www.flickr.com/photos/martin_alexius/6223012922
  2. pin add, “Self Checkout”, https://www.flickr.com/photos/pinadd/2858659917
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Daniel writes on foresight and explores new economic systems. He has over 15 years of experience in technology & digital marketing and has worked with clients in Europe, Asia, and the United States. Daniel is currently part of the University of Houston's Foresight Program.

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