Night view of Dhaka, Bangladesh. Photo: public domain

The spectacular success Bangladesh has achieved over the past twenty years has seen the country’s economic growth rise to more than 6%, and has seen the poverty rate more than cut in half. The transformation has been driven largely by the textile industry, as jobs are finally moving from China, which had maintained a comparative advantage for decades.

But are rapid advancements in automation moving too fast to allow a new wave of developing countries to rely on cheap labor to fuel their economic development? Many see this happening, and research from the UN last November found that the developing world will lose two-thirds of all jobs due to automation.

Robin Harding has a different view, writing for the Financial Times this week that automation is not yet ready to displace the human hand, and that Bangladesh will lead the way for a new wave of industrialization:

“If other manufacturers are to grow, they must displace this industrial giant, and Bangladesh suggests that is now possible. China’s factories are investing heavily in automation and robotics in order to raise productivity and stay competitive as local wages rise. But there is little reason to think it will work any better than it did for the rich countries China itself displaced in the 1990s.

Robotics technology has moved forward but fully automated production lines are still vastly expensive and difficult to adjust. For that reason, robots are little used beyond automobiles and electronics, where the volumes are high enough. Robots are decades away from displacing skillful human fingers willing to work for dollars a day in an industry where customer demand changes as quickly as clothing.”