Automation in Latin America: A Threat or an Opportunity?


SEATTLE — The world faces another industrial revolution. Advances in artificial intelligence and robotics have opened up new possibilities for how industries operate and brought the value of human labor into question. A 2017 report from the McKinsey Global Institute estimated that half of the labor done today could be turned over to machines that are able to work more efficiently and cheaply than humans. Automation in Latin America and across the globe has the potential to change the nature of industry as we know it.

Undereducation an Obstacle for Latin American Workers

Latin America has much at stake in this oncoming era of automation. Regions that have high percentages of undereducated, low-skilled workers are likely to be hit the hardest by machine replacement. It stands to reason that if robots are considered to be justifiable replacements for low-skilled laborers in manufacturing, retail and other areas, humans’ share in production value will be dramatically reduced. For Latin America, this poses a threat, as it has one of the least trained workforces in the world. According to the World Bank’s Enterprise Surveys, 31.6 percent of the region’s companies say that inadequately trained workers are their biggest impediment to growth. The global average is 21.2 percent.

Latin American countries have struggled for years to create public education systems that are accessible to diverse populations and on par with international standards. Educational results from students in the region prove to be some of the worst in the world. Businesses also note that there appears to be a disconnect between the skills being taught in schools and the needs of the private sector. Based on the difficulties of accumulating a highly skilled workforce, the appeal of automation is tempting for many Latin American companies who want to cut costs. Estimates suggest that automation could raise global productivity growth by 0.8 to 1.4 percent annually. Automation in Latin America could have similar, if not greater effects.

Automation Can Provide a Chance for Workers to Rise into Quality Jobs

Although figures for potential job displacement due to automation in Latin America are high, some experts believe that the introduction of new machinery will create an opportunity for Latin Americans to advance into higher skilled and better quality jobs. The advent of artificial intelligence technologies will bring about the creation of vast numbers of new jobs and career paths. To cope with these new technologies, humans will have to be trained and educated on how to integrate them into the workplace. In this process, Latin American governments have the chance to help their large populations of low-skilled workers transition into jobs that require more knowledge and subsequently better pay.

The responsibility of training and mobilizing this at-risk population will fall on the shoulders of governments and businesses, who must act decisively to adapt to the shifting nature of the global economy. Governments must take on the role of providing new education and training programs to help workers transition into the automated economy. Education in a curriculum that complements the new machines will be essential. For example, interpersonal communications, physical dexterity and entrepreneurship are all skills in which humans retain a competitive edge. Businesses also must step up to the plate to take advantage of new opportunities that will be made available with increased automation in Latin America.

Peruvian Startup Demonstrates the Potential of Automation in Latin America

An example of a Latin American business creating positive growth from automation is a logistics startup group from Peru called Chazki. The creators of this group recognized that the lack of clear postal addresses across Peru created difficulties for e-commerce. Partnering with the Universidad de San Pablo, the group constructed a robot able to learn the coordinates of delivery addresses. Through this technology, Chazki and researchers at the Universidad de San Pablo have essentially created a new postal map with locations present that had previously maintained no formal address.

In all, the evidence points towards a future shift in the nature of the Latin American economy. The introduction of more advanced technology and artificial intelligence will lead to the elimination of many jobs for low-skilled workers. However, if governments and the private sector work together to come up with innovative solutions to help prepare their people for the industries of tomorrow, the results could be that Latin Americans see long-term socioeconomic improvement.

– Clarke Hallum
Photo: Google


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