NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Friday, March 22, 2019

By Richard A. D’Aveni

These are worrisome times in much of the developing world.  Because of automation, companies in the West are needing less low-cost labor, so they are “reshoring” production closer to their customers.  Even the labor-intensive work of sewing can be handled by robots, as factories in the United States are now demonstrating with T-shirts.

That’s bad news for countries looking to follow the “Tiger” model of East Asian development from the 20^thcentury.  No longer can they expect to gain scale and capital by specializing in low-skilled, export-oriented industries such as textiles and consumer electronics.  Will they now be forced back into their old, slow path of development, through exporting natural resources and agricultural products?

Fortunately, what technology is taking away, it can also give.  Among the automating technologies is 3D printing, which offers an alternative development path for countries willing to invest in it. Because it requires far less physical infrastructure than conventional manufacturing, countries can follow it to leapfrog into industrial competitiveness.

Photo courtesy of its-lizzy.