Asia’s participation in global value chains has been critical for job creation in the continent. However, these jobs could now be under threat from technology. According to new research, technologies, such as digital manufacturing and robots, could result in job losses in the region.
In a study published by the Asian Development Bank, Donald Jay Bertulfo and others examine how jobs in developing Asia respond to consumption, trade, and technological advances in a dozen economies, including India, China and Indonesia, which accounted for 90 per cent of Asia’s employment between 2005 and 2015. They first show how “task relocation” associated with integrated production networks benefited certain countries. Both Bangladesh and India witnessed faster growth in manufacturing employment between mid-2000 and mid-2010, which the authors attribute to greater integration with global value chains.
However, the authors also find that technological advances along these value chains are associated with a decrease in employment in both routine and non-routine occupations. Moreover, the negative effects of technological change exceed the favourable effects of task relocation, thus hurting overall employment. Textile workers in developing countries, who are an important example of how labour-intensive countries contribute to the global value chain, are now being replaced by robots in advanced countries.