Automation, the changing world of work, and sustainable development

Automation and digital innovation are likely to have a profound impact on jobs in developing countries. Countries should act now to refocus their economic and social policies to make them more sustainable, says IIED director Andrew Norton.

Barely a week seems to pass without new additions to the literature on technological change and its implications for what we humans are going to be doing for a job in the not-too-distant future. Mostly this focuses on developments in areas such as automation, artificial intelligence (AI), robotics and digital communications – and the implications for rich country economies.

But when looking at the implications for poorer people in poorer countries, much is uncertain. The demand for human labour is clearly not going to disappear – but there are certainly real threats to workers’ bargaining power, voice and ability to organise on a global scale.

One of the clearer trends – already visible and growing – is a steady undermining of the export-led manufacturing route to rapid growth that many countries, particularly in Asia, have followed over recent decades.

Automation has already been acting to erode this pathway and can be expected to continue to do so, as the advantages of abundant cheap labour are eroded and ‘re-shoring’ production closer to rich country markets increases. This is likely to reduce the momentum behind ‘convergence’ – the process by which the GDP per capita of poor countries has been catching up with that of rich countries over the last 20 years. 

Some of the sectors in the front line of the next wave of automation (such as textiles, or call centres using AI and voice recognition software) have been important for expanding opportunities for women in developing countries, so the impact on gender equality could turn sharply negative.  

And for Africa, with a burgeoning cohort of young people entering the workforce, the prospect of not being able to capitalise on low-cost labour to attract manufacturing investment is a particular concern.

The case of Costa Rica

As the export manufacturing route to rapid economic growth is progressively eroded, this ought to bring renewed impetus for developing countries to invest wisely in their rich ecosystems. For those that can, basing their sustainable development strategies on the inherent value of these resources for present and future benefit should be a fundamental part of their economic planning.  

The example of Costa Rica, which embarked on an ambitious programme of forest regeneration through carefully structured incentives to those who manage agricultural and forest land, is worth considering.

I was recently on a panel dealing with the issue of positive links between environment and poverty reduction at the High-Level Political Forum for the Sustainable Development Goals with Edgar Gutiérrez Espeleta, the Minister of Environment and Energy of Costa Rica.

Minister Gutierrez made some striking points. When Costa Rica embarked on this hugely successful vision, which has increased forest cover from around 20 per cent in the 1980s to over half of the country now, the government did not know how it would make reforestation benefit the economy.

Costa Rica piloted ‘eco-tourism’, which became highly successful both in terms of economic growth and in terms of the distribution of the benefits. Minister Gutierrez remarked that the ‘eco-tourism dollar’ is the ‘best dollar’ the country gets in terms of poverty reduction, because the benefits are so broadly distributed.

Automation has already been acting to erode this pathway and can be expected to continue to do so, as the advantages of abundant cheap labour are eroded and ‘re-shoring’ production closer to rich country markets increases. 

Technological disruptions

Not every place or every country is going to be able to make eco-tourism work as a way to achieve inclusive, sustainable development. But to get the world moving on a good footing in the midst of the technological disruptions that the world of work faces in the coming years there is a need to ensure that environmental stewardship is rewarded from the micro to the macro level.

Carbon markets, which tax polluters and reward those who manage the planet’s carbon sinks on land and sea, are an essential direction for public policy and voluntary action.

But even in the absence of global progress on the great global challenges such as climate change, there are many ways in which putting human effort to work for the environment can be done.  

The Mahatma Gandhi National Rural Employment Guarantee Act in India, for example, supports both local environmental infrastructure and the livelihoods of poor people who can claim 100 days of paid employment a year through the scheme as a right. And, increasingly, many local governments around the world are experimenting with paying farmers or landowners for the ‘ecosystem services’ provided by a healthy environment to local communities.

There are many ways in which the explosion of AI-driven technological change can boost environmental progress – from micro-grids that enable renewable energy to become a feasible solution for the millions who currently lack access to electricity, to transformations in low emissions public transport systems.   

The world of work in developing countries will change profoundly over coming years. In addition to shifting locations of manufacturing, service provision in fields such as accountancy or editing will be profoundly disrupted by new global internet platforms which allow people anywhere with good access to the internet to bid and obtain work. These are already having an effect, which is sure to grow. 

For sure there are risks for poorer countries. But if we can identify the opportunities arising from these changes to strengthen sustainability and inclusion there could be real benefits, too.

Andrew Norton is director of IIED. This article is republished from the IIED blog with permisison. 

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