Technological Unemployment: Should we be worried?

Monday June 20 2016

By BITANGE NDEMO
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A conference organised by the African Centre for Technology Studies and Kenyatta University (KU) on 3D printing technology was held last month at KU.

One of the questions that was repeatedly raised at the conference was whether technologies such as 3D printing would destroy jobs.

There is, indeed, something simultaneously scary and reassuring about the advance of technology. The reality that technology eliminates jobs is as real as the fact that it creates new ones.

It is negative news that travels fast and gets attention. The spectre of technology-induced mass unemployment has recently grabbed the headlines.

A report on automation of jobs, Technology At Work v2.0: The Future is Not what It Used to Be, was recently published by the Oxford Martin School and Citi.

The report was widely cited for its projection of the impact of automation on the chances of developing countries following in the footsteps of the developed countries, whose economies took off in pre-mass automation times.

In developed countries, 57 per cent of existing jobs are destined for the history books as digital and robotic automation removes them from the payroll.

In developing countries like Kenya and Ethiopia, close to 85 per cent of jobs can be automated, ushering an early settling in of what has been called "premature de-industrialisation".

In some developing and emerging countries, factories are vacating industrial parks in large numbers even as new industrial parks are being put up. 

This is no theoretical conjecture as it is happening right now, leading to speculation that, as the Financial Times put it, "China may be one of the last nations to ride the wave of industrialisation to prosperity".

These developments are compelling reasons to rethink our industrial policies. 

The ongoing robotic revolution in China is also a clear indication of what is ahead for industrialisation in developing countries. China’s resolve to replace its human workforce with a robotic workforce should be a reason for us in Africa to reconsider our manufacturing policies and strategies.

How can the manufacturing sector cope with "the race against the machines" in China and the developed world? How should we react to the advent of the more intelligent, agile and versatile machines that are being deployed in countries that used to be our trading partners and importers of our manufactured products?

The intelligent, agile and versatile technologies such as 3D printing and robotics, though still in their early stages of maturity, are relatively more accessible, and even cheaper than comparable previous technologies.

The projections from the explosive growth of these emerging technologies in the past few years give a strong indication of the accelerated exponential growth pervading all areas of economic and social life.

For those not preparing well ahead of their full impact, the costs, when they finally hit, might be unbearable and the consequences might be really traumatic. Preparedness is therefore of the essence as jobs become increasingly fluid and unpredictable.

However, it is not all doom and gloom. After all, technology has made humans wealthier, healthier and wiser and will continue to do so. 

The advance of technology is almost unstoppable. We need to adjust accordingly, capitalising on the opportunities created on the way.

Africa may miss the industrialisation stages that China and the rest of the world went through. However, it is important to note that skipping some stages of industrialisation does not mean that Africa will be thrown into irrelevance in the context of the global economy.

It means Africa is presented with the opportunity to leapfrog and that it is relieved of the onus of reinventing the wheel by adopting the latest technologies for its economic and social growth.

To do so requires a fundamental change in policy orientation that may involve a focus away from imitating and copying others to bypassing them altogether.  

Copying China and trying to woo foreign industries to Africa is the dominant policy that African countries have currently adopted.

While time will tell for how long this policy will remain effective and sustainable, there are signs that China itself is not sticking to the policies and patterns of industrialisation that African countries are trying to emulate.

China’s aggressive move towards high value manufacturing, design and innovation is proof of a policy change, and of the economic veracity of adopting high technologies.

As Foreign Policymused in “It’s Official: China Is Becoming a New Innovation Powerhouse”, China is making the historic transition from 'the factory of the world’ to ‘the factory of the future’.

This transition is not without its implications for Africa. Primarily, Africa has a chance to replace China as the factory of the world if jobs that are lost in China migrate to Africa.

This is what many would think, but as a UNECA report warned last year, the destination of these jobs is unknown.

There are at least two reasons for this uncertainty. One is the rise of manufacturing hubs in the "Mighty Five" (Malaysia, India, Thailand, Indonesia, and Vietnam or MITI-V), deflecting interest away from Africa.

The other reason is the automation of jobs leading to their retention in China, propped up by the fall in robot prices and government subsidies that support the robotic revolution.

These should be disquieting developments for Africa and should lead to policy changes and requisite action.

There is nothing wrong in copying from China or any other country that provides a reasonably adaptable model. Indeed, copying China is attractive given the country's leap out of poverty in a relatively short period of time.

Whether Africa can replicate China’s feat is, however, an issue that has to be approached with great caution, partly for the reasons mentioned earlier. Africa need not, and cannot, go through the stages that China has, for the same reasons that made China repudiate that strategy of development and adopt high-value manufacturing.

Africa also needs to explore graduating, or rather leapfrogging, to high-value manufacturing just like China.

Again, just like China, Africa needs to train and retrain its workforce. China is educating its young to prepare them for the jobs in the factory of the future, and so should Africa.

The factory of the future, sometimes referred to as Industry 4.0, is technology- and knowledge-intensive and does not rely on the labour-intensive tasks typical of the mass manufacturing system that is fast turning obsolete.

The concept ties together technologies such as the Industrial Internet of Things (IIoT) and modular automation, big data, advanced analytics, human-machine interface and digital manufacturing or 3D printing. 

Jobs in the mass manufacturing system will be wiped out and replaced by high-quality rewarding jobs, which the markets will be looking for in the factory of the future.

The loss of jobs is not as worrying as commonly thought. What is more worrying is the lack of a workforce to take up the jobs in tomorrow’s job market.

By graduating a million PhDs a year, mainly in science, technology, engineering and mathematics (STEM), China is set towards averting such an eventuality.

This is pretty much what Africa should be doing, for there seems to be no choice. It will be bliss for those who are ready for it and a disaster for those clinging to their old ways. 

Prof Ndemo is an associate professor at the University of Nairobi’s School of Business. Twitter: @bantigito; Dr Demissie is a senior research fellow in the Inclusive Bioeconomy programme at the African Centre for Technology Studies.