A Closer Look

The Future of Work – Differences in robotization across industries and countries

Akamatsu’s “flying geese” paradigm describes this shifting international division of labor based on dynamic comparative advantage. American, European, and Japanese firms moved a lot of their production to developing Asia and Latin America, first helping countries like Malaysia and Chile, then others like China and Mexico, and then others like Vietnam and Bangladesh. Lower-wage countries in Asia and Africa are hoping to be next in line. Will robotization slow down the offshoring of production to lower-cost locations and ground the flying geese? In a new paper, we move beyond anecdotes to analyze the impact of robotization in high-income countries on greenfield FDI flows from high-income countries (HICs) to low- and middle-income countries (LMICs). Unlike trade flows and other investments, which can be sticky and slow to change in response to other factors, greenfield FDI data represent announcements and are therefore forward-looking.

DIFFERENCES IN ROBOTIZATION ACROSS INDUSTRIES AND COUNTRIES

The intensity of robot use varies widely across manufacturing industries and high-income countries. In 2015, the number of robots per 1,000 employees was the highest in the Republic of Korea, Germany, Sweden, the United States, and Denmark. Among these, the intensity of robot use increased discernibly between 2004 and 2015 in Korea and the United States but remained largely unchanged in several European countries. Robotization remains more limited in China (Figure 1). Among industries, robotization is most pronounced and has advanced most rapidly between 2004 and 2015 in electronics, automotive products, rubber and plastics, and metal products. In contrast, the intensity of robot use in textiles, apparel, and leather products remains the most limited (Figure 2).

Chosen excerpts by Job Market Monitor. Read the whole story @ Have robots grounded the flying geese? Automation and offshoring in the manufacturing sector

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