The impact of robots and industry 4.0 in Latin America

The impact of robots and industry 4.0 in Latin America

New technology presents opportunities in terms of productivity, but also has potential drawbacks in terms of the profile of jobs and available employment. A new publication explores the impact of robots and industry 4.0 in Latin America.

Robotlution. The Future of Work in Latin American Integration 4.0,” analyzes the automation of work and its impact on the region’s production matrix and export model. It brings together 40 experts from around the world to analyze the future of work in Latin America in the light of automation. Through research articles, interviews and case studies, they respond to the main questions that the so-called ‘fourth industrial revolution’ is posing in the region:

  • How will exponential automation impact Latin America’s international role and the diversification of its production system?
  • Will ‘robotization’ destroy jobs or will it create new, more sustainable ones?
  • What skills will people need in the future and how can we rethink education for the coming generations?
  • Can technological change play a part in reducing inequality in Latin America?
  • How can the multilateral negotiation agenda be made compatible with the latest technology?
  • What hopes and fears does the future of work conjure up among Latin Americans?

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), the producers of the publication, 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 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.

The full publication can be downloaded here (172-page PDF file).

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