With the potential of higher productivity and economic growth driven by automation, concerns about job displacement, skill gaps, and regional imbalances also arise.
Many capital-intensive manufacturing industries are gradually becoming automated, causing a substantial number of low- and unskilled workers to lose their jobs and move to other professions.
On this issue, Md Asaduz Zaman of Industry Insider talked to Dr. Sayema Haque Bidisha, a professor of economics and Pro-Vice-Chancellor (administration) at the University of Dhaka. She is the former research director at the South Asian Network on Economic Modeling (SANEM), a think tank in Bangladesh.
Her research includes topics such as the labor market, gender, and women’s empowerment, gender budgeting, migration and remittance earning, credit and food security, population and development, economic growth and exchange rate movements, skill and education, demographic dividend, and youth population. She has worked with several international and national organizations, e.g., the World Bank, IDRC, ILO, FAO, UNICEF, DFID, etc.
The International Labour Organisation (ILO) and the Bangladesh government’s a2i project jointly conducted a study in 2018. It revealed that by 2041, some 5.38 million jobs will be at risk in five key areas of Bangladesh due to automation in the industries and services sector.
Of the five sectors, the ready-made garment sector will be the worst sufferer, as 2.7 million or 60 percent of jobs could be lost, according to the study. It reported that some 4.4 million workers are employed in the garment sector.
According to the report’s findings, furniture will be the second sector to be most affected, with 1.38 million jobs, while the agro-processing, tourism, and leather sectors will likely lose the rest of the jobs.
What’s your take on these findings?
Before commenting on this finding, I would like to know its data sources and methodologies. If you ask me, I don’t have any concrete data. Since the ILO was involved, it likely worked with the proper database. We can treat it seriously.
However, we experienced similar experiences in our research, which we conducted at least ten years ago using the appropriate database. We realized there was a significant risk for lower-skilled people, particularly women, who might lose their employment owing to automation. This result mirrored the actual scenario, regardless of whether the number was lower or higher.
What are the reasons behind it in Bangladesh?
In theory, factories require two sorts of inputs: labor and capital inputs. When one input becomes pricey, factories attempt to move, underscoring another input.
For example, the entire scenario shifted substantially when Rana Plaza collapsed in Savar on 24 April 2013. Garment manufacturers, such as the Bangladesh Garment Makers and Exporters Association (BGMEA), the Bangladesh Knitwear
Manufacturers and Exporters Association (BKMEA), and foreign stakeholders began to take minimum wages seriously. Foreign pressures have also helped to modify the situation.
As a result, labor recruitment grew more expensive, and factories began gravitating toward automation. Automation usually helps to produce more efficiently in a shorter period, allowing producers to acquire more manufacturing orders from importers and deliver them quickly.
What sort of automation is being materialized in Bangladesh?
In various professions, automation is now helping to materialize the highest output, for instance, healthcare, business, agriculture, education, finance, law, and manufacturing sectors. In Bangladesh, we may see the rising use of artificial intelligence in automation, with collaborative robots, coding, and various integrated automation to achieve better and faster output.
When it is difficult for humans to do something or when they are less productive, automation, especially artificial intelligence, can help find solutions.
For example, banks need very few cash officers as the automated teller machine (ATM) has reduced the pressure. In the RMG sector, the manufacturer would use more efficient robotic machines to ensure high-quality products rather than hire many workers.
Apart from this, the world produces a lot of data every day. The medical, financial, and manufacturing sectors have more potential than any other domain. Automation is being used there to organize and manage data.
How will this affect the overall economy as a large number of the population in the near future might join agriculture losing jobs from other industries due to automation?
This means that the major workforce will contribute less to the economy because agriculture is less productive than other industries.
According to the Bangladesh Bureau of Statistics (BBS) Labour Force Survey, the agriculture industry currently employs approximately 45 percent of the workforce. There will be an impact if a big portion of the population transitions from the industrial sector to agriculture soon.
However, there is one factor to consider: which gender is more likely to lose their job? If it occurs in the RMG sector for women, they may fall into the category of not in education, employment, or training (NEET). Currently, around 67 lakh people in Bangladesh are in this category, according to BBS data.
If the majority of those people are men, they will prioritize their wages. And, if the agriculture sector offers a lower wage than other sectors, those people will be less interested in joining the agricultural labor force.
I believe the agriculture sector should be upgraded as part of national strategies and regarded as a source of medium-type employment.
Who will be the biggest victims of automation? Informal or formal sectors?
The informal sector should be the worst affected. However, we must determine which class of workers will be affected, i.e., high, low, or medium skill levels.
In Western countries, neither the highest nor the lowest skilled workers were harmed. Considering that, we might conclude that medium-skilled workers will suffer the most compared to high—and low-skilled workers.
Bringing the lowest-skilled people into diverse professions will not result in success. For example, many basic jobs in the agricultural industry rely entirely on manual labor.
In Bangladesh, it is too early to tell whether the least trained workers will not be hampered. Workers in both the informal and formal sectors, from the mid- to lower-skilled categories, will face the reality of job cuts.
How does the advent of large language models (LLM) based automation technology impact the current prediction? What
sectors are at higher risk of job losses due to these?
Large Language Models (LLM) are a highly trained industry that deals with language-related technology. They are commonly used to generate automated text, translation, modeling, and forecasts. This form of automation may affect mid- to high-skilled individuals in various freelance industries. Incorporating LLMs into numerous businesses represents a fundamental shift in how we engage with information and, consequently, how we work.
However, there is a huge opportunity for businesses and jobs. Higher-skilled persons can take advantage of these opportunities. This transition could result in large productivity improvements and the creation of new jobs, but it also has the potential to cause job displacement and exacerbate socioeconomic inequality.
How will automation enhance productivity and make way for newer jobs in the economy?
The fourth industrial revolution is underway, bringing a series of upheavals. Technologies such as robotics, automation, machine learning, and artificial intelligence are gradually entering the production process worldwide.
AI and machines increase labor productivity by automating routine tasks, expanding employee skills, and increasing the value of work. This creates a huge possibility of employment for higher-skilled people.
As we know, China went through a similar transition in the 1980s. What can we learn and apply from that transition?
I disagree with you in this circumstance. We have a different story than China, as it has a historical heritage and a large workforce. Our resource capability, such as technical knowledge and demographic system, differs from that of China.
We must analyze our perspectives in light of our capabilities. Bangladesh can pursue a medium approach, focusing on its population and financial capabilities. The government can reward the private sector or public-private partnership (PPP) for the three medium-term categories to protect those facing job cuts.
In contrast, highly competent workers have more opportunities in the automation era. But, for lower-skilled workers, the government can implement a medium-term strategy such as agro-based industries.
Structural transformation can be integrated with the labor market. Youth who are not interested in entering the agricultural sector directly may choose a medium-type industry.
What should the government do at the policy level to minimize damage and maximize the benefits of automation?
We often believe that a few levels of technical and vocational education will suffice for the country. It is the oldest manner. Many issues are potentially implementable.
First, the government’s policy can produce funds for adolescents and freelancers to develop their ideas and projects. Their fresh ideas may create jobs.
Second, the government can encourage the private sector to engage in research and development (R&D), allowing industrialists to improve the abilities of existing personnel.
Third, the government should implement measures to improve the soft skills of educated graduates.
Besides, it is important to ensure the linkage between academia and industry. We need to consider rural youths. We commonly think only of university graduates. However, there are still a large number of youths in rural areas who lack education and skills but wish to work.
The government should provide area-based or tailored programs for these graduates, such as agro-based industry. This would also help ensure decentralization.
For example, if you want to take action for Tangail district adolescents, you must first gather data on the number of youths, the gender ratio, and their talents. The government will then be able to launch effective projects easily.
The government must also mainstream technical and vocational training. At the same time, recruiters in the private sector must ensure an additional pay scale for youths.
How should individuals planning to enter the workforce in the next decade best prepare themselves to align with this technological shift?
At first, they must overcome the stigma of pursuing any job. They have to take challenges. If the government promises to develop new companies and projects aimed at youth, they must be willing to take chances and be skillful rather than seeking traditional employment. So, mental willingness is required; otherwise, nothing will be changed.
