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BY JED JALECO DEL ROSARIO
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Sunday, February 12, 2017
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MONETARY Watch recently posted an article about a mobile phone manufacturer in China that automated its production lines. According to the article, the factory used to employ around 650 employees, but after its switching to robots, it now employed only 60 personnel and is expected to lay off more in the foreseeable future.
Despite the loss of employees, the factory is now reported to be operating at 250 percent efficiency while its products are also of much better quality. For those who follow the latest news in automation and robotics, this news is not particularly surprising, but also no less alarming.
People have known instinctively that machines will eventually replace the human worker. It was just a question of when and how.
With the advances in the fields of machine learning and robotics, it now appears that we are getting closer and closer to that situation where humans may no longer have to work, and this can have serious repercussions for human societies all over the world.
Some believe that automation will usher in the era of post-scarcity, an eventuality where everything will become so cheap that they might as well be free; while others think that automation will widen the gap between the haves and have nots.
It’s probably too early to tell how things will turn out, but one thing’s for certain, sooner or later the Philippines will need to adapt to the effects of automation to remain economically stable.
Automation, along with the latest 3D printing technology, will most likely render outsourcing, which plays an important role in the growth of emerging markets (including the Philippines), obsolete. What this means is that foreign investors may no longer transfer their factories to countries, like the Philippines, once automation has been implemented in their own countries. It also means that emerging markets will no longer be able to capitalize on cheap labor, which means that countries like China and India can no longer compete with developed economies unless they somehow automate their own manufacturing sectors.
Therefore, it is important for the Philippines to avoid becoming too dependent on foreign outsourcing, as foreign investors will most likely move away from outsourcing towards automation as the primary means of dealing with labor costs in their own nations.
Another eventuality to take consider is that automation will also most likely harm the country’s already existing manufacturing industry, particularly those that focus on assembly. Needless to say this will cause a lot of unemployment, and may even harm the country’s long term growth.
On the bright side, though, it’s worth mentioning that the Philippines also has a robust service sector, which may off-set the losses in the manufacturing sector caused by increasing automation. However, even certain service sector jobs may be replaced by machines, so there’s no guarantee that our service sector is completely safe, but even so, the country’s the country’s diverse economy may help to reduce some of the negative effects of automation.
Another possible good news is the commercialization of 3D printers, many of which could be used by MSMEs to bypass some of the challenges posed by automated manufacturing. 3D printing may even allow the country to develop an alternative to traditional factories, many of which will now rely on robots and other industrial machinery.
It will take some time for the effects of automation to come to our shores, but even so, it’s important to be prepared. After all, the machines are entering the job market./PN
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