Is it time to think about adversities of automation?
The world economy is changing and Bangladesh needs to rethink its strategy on its major growth driving sector – the apparel industry – and seriously start thinking about its future, says World Bank President Jim Yong Kim in an exclusive interview.
According to him, the labour-intensive apparel industry of the country, that employs over 3.6 million labour force, will be “relevant for a while” before becoming redundant in face of increasing incorporation of automated machineries.
In the past five years, Bangladesh’s apparel industry has seen a massive overhaul in upgrading the capital machineries. Automated machines, self-equipped with software-based handling system, have been installed, which has given a great boost to production.
This automation drive has delivered two major advantages to Bangladesh. On one hand, in the in-house manufacturing, it has improved the product quality, drastically increased production capacity and cut down on labour costs; and on the other hand, it has helped Bangladesh create among the most standardised and compliant line of factories in the globe – for what the country has been under pressure after major industrial disasters.
However, there is a debate existing on whether automation will affect the jobs of workers adversely. Some believe that the workers, for Bangladesh’s apparel industry, will still be relevant for quite some time.
Speaking at an exclusive interview given to local daily, The Daily Star, on July 2, 2018, when he was in Dhaka to visit the Rohingya refugees in Bangladesh’s Cox’s Bazar, Kim highlighted the sector as “one of the great drivers of Bangladesh’s economy over the past”.
“Machines are beginning to replace the human hands in the garment industry. My guess is that the labour-intensive garment factories will be relevant for a while… I think, it is likely, that ultimately the robots will take over,” he said.
“While I think the garments industry will persist in Bangladesh for a while; I think the country has to start thinking about disruptive technology and how it is going to impact jobs,” he said on the note of the large employment base of the apparel sector.
Highlighting that it is not a unique phenomenon to Bangladesh alone, he said: “Every country, every developing country, in fact every country in the world has to rethink what the drivers of economic growth would be”.
“There is no specific prediction I have for Bangladesh, my only recommendation is that like every other country in the world, Bangladesh has to start thinking very seriously now about how automation, innovation, artificial intelligence... how will those things affect the drivers of growth today?” he said.
What does Bangladesh need to do to prepare for the economy of tomorrow? He says: “There are many different possibilities. We don’t know what that would look like. Anybody who would tell you what the economy of tomorrow will look like... you shouldn’t believe it. Nobody really knows, but you have got to start preparing from now on. Think about it.”
While he is right about the mystery of tomorrow, Bangladesh’s apparel manufacturers are driving their capacity towards a goal to touch US $50 billion exports by 2021. They are trying to implement a number of strategies to pursue their goal – the highlight of which is expected to be branding the ‘Made in Bangladesh’ tag.
‘Bangladesh’s industries won’t shift to Africa’
On the prospect of Bangladesh’s apparel industries shifting to African countries on the hopes of lower labour costs there as opposed to rising labour costs at home, the World Bank chief says, he does not think it is a viable reality mainly because of inefficiency.
“Many African countries are saying, very soon, the Bangladeshi garment industry will come to Africa. What I am telling them now is don’t count on it. You know, I have still not seen a single African garment factory that can reach higher than 65 per cent efficiency of any Bangladeshi factory,” Jim Yong Kim says.
“Right now, the only way these African garment factories stay in business is because there is the African Growth and Opportunity Act, which gives special access to the US market for African garment factories. It is the only way they stay competitive.”
If his prediction comes out true, it will be one factor that will not affect the mass worker population that is currently engaged with Bangladesh’s apparel industry and more in the future; even though with a raise in pay structure for workers due this year.
According to what the World Bank chief said, Bangladesh should make most out of the time that its apparel industry is expected to flourish.
For Regular Industry Insights