Robotlution: A new IDB publication on the automation of employment and how it will impact productivity

Mexico and Brazil are leading the region in the use of robots: one to two robots per thousand workers

 Will robotization destroy or displace jobs or will it create new, more sustainable ones? Can technological change play a part in reducing inequality in Latin America and the Caribbean? 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,” a publication that analyzes the automation of work and its impact on the region’s production matrix and export model. 

The publication was presented by Gustavo Beliz, director of the Institute for the Integration of Latin America and the Caribbean (INTAL) at the Integration and Trade Sector at the Inter-American Development Bank (IDB), who stressed the need for a new “sociotechnological contract” that will enable the region to make the most of the opportunities that new technologies are opening up.

The manager of the IDB’s Integration and Trade sector, Antoni Estevadeordal, emphasized the importance of bringing trade negotiations in line with new technological demands in order to promote a diversification of production in Latin America. 

The event took place at INTAL’s headquarters in Buenos Aires, Argentina, and included presentations from Jacques Bughin (McKinsey Global Institute), Irmgard Nübler (International Labour Organizations), Tang Jun (Zhejiang University), Lydia Harriss (UK Parliamentary Office of Science and Technology), Miguel Acevedo (Industrial Union of Argentina), Beatriz Nofal (Eco-Axis), and Eduardo Levy Yeyati (Torcuato Di Tella University), among others. 

The main findings of the publication are: 

Fine-tuning metrics: there is a need for new metrics for monitoring the impact of innovation on employment. Differences in current estimates of the share of jobs that robots will replace range from 5 percent to 47 percent, depending on the method used. Impact assessment studies also need to consider the indirect creation of new jobs: each technological job generates 4.9 other jobs as part of a spillover effect. 

Granular information: the probability of jobs being automated varies by country and by sector. For the agricultural sector in Uruguay, the risk is as high as 82 percent, and is greater among people with lower levels of formal education, young people (those between 15 and 30 years of age), and men. In Argentina, it is 76 percent for the transportation sector. 

Robot numbers: Switzerland, Germany, Japan, and South Korea are the countries with the highest numbers of robots per industrial worker (more than 20 per thousand workers). In China, sales of robots have grown by 67 percent in the last two years, almost double the 34 percent global average. In Latin America and the Caribbean, Mexico and Brazil are leading the way in the use of robots, although at one to two robots per thousand workers, they are still far behind more developed countries. 

Trade 4.0: bilateral exports in the automotive sector have grown by 2 percent for each 10 percent increase in robot numbers despite the incentives for firms to reshore their operations. The technological divide between countries that sign trade agreements containing technology transfer clauses may shrink by up to 15 percent.