Robots unsuitable for garment manufacturing: UNCTAD

15 Nov '16

2 min read

Robots are replacing low wage workers in most of the workplaces to promote domestic manufacturing. This step is bound to have an adverse effect on developing countries. However, robots are not yet suitable for labour-intensive firms like garment industries, leaving the door open for developing countries to enter industrialisation along traditional lines.

If robots are considered a form of capital, which is a close substitute for low-skilled workers, there would be reduction in the share of human labour in total production costs. This is bound to affect the garment manufacturing, the United Nations Conference on Trade and Development (UNCTAD) said in its October 2016 Policy Brief titled 'Robots and Industrialization in Developing Countries'.

The use of robots at workplace is aimed at reshoring—promoting local manufacturing by attaining maximum benefits. UNCTAD highlights that reshoring is taking place in developed countries, but it has fallen short of expected reindustrialisation effects. Reshoring has mostly been accompanied by capital investment. Minimal job creation has occurred due to concentration on high-skilled activities, this has thereby sharpened income disparity between rural and urban dwellers.

Expansion of the trade preference programmes of the developed countries will also benefit the least developed countries. This process will begin by providing comprehensive coverage of duty-free and quota-free market access to labour-intensive exports from developing countries, combined with rules of origin that are simple to use and flexible in meeting the producers' needs. Enhanced regional trade integration among developing countries could help them attain a market size that will help industries to forego reshoring and maintain production in their countries. Industries such as textile and apparel will benefit from such integrations. (RR)

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