What does it mean for our economy?
Most of us have heard of the Second Industrial Revolution that took place in the West before World War I. Some of us even studied the details of the advancement in manufacturing processes e.g. electrification and the Bessemer process. However, what most historical textbooks and teachers failed to mention was that the effects of the revolution, particularly the meteoric rise in productivity, did not take place until 30 years after the first handful of factories started to electrify their workflow. Some argue that electricity as we know today took up to a full century to completely play out.
There is an important lesson to learn from the phenomenon. It takes some time for these revolutionary, empowering technologies to take effect, but once they do, those who refuse to adapt set themselves up for failure. A factory owner in the early 1890s who refused to replace the limited abilities of human muscles with machinery would cease to exist by the 1930s.
Today, the limiting factor is not our muscles, but our minds. The emergence of revolutionary hardware and software means that firms are facing increased competitive pressure not only from their own industry, but from seemingly unrelated areas. In the United States, notebook manufacturers are scrambling to protect market share against notetaking software such as OneNote or Evernote – it is simply more convenient to record and store your notes in the cloud! It is not unreasonable to think Bangladesh is going to see a similar environment not so far in the future.
Moreover, the nature and rate of change today is not what it was like in the 1870s. It is much quicker and forecasted to be more profound than ever. Erik Brynjolfsson, a professor at MIT, was one of the pioneers of this theory of exponential change in the digital world. Even he admits that he had underestimated the magnitude of its effects. A little over a decade ago, Erik had taught his students at MIT that there were some actions only humans could exclusively be good at. Driving a car was his primary example – surely a computer would not be able to follow any 'structured rules' of code to navigate traffic. Within five years of that lecture, Erik had completed a long drive along the highways of California on a driver-less car. He had been proven wrong.
So what does this mean for the Bangladeshi economy? It does not take a rocket scientist to figure out that Bangladesh's source of global competitive advantage is almost exclusively reliant on low labour cost-structures. This would put our entire macro-model of business under serious threat within the next 20-30 years to the born optimist, 10-20 to the trained pessimist.
It is imperative for our country to recognise this danger - one that threatens to cause massive stagnation in our economy, and devise a strategy to hedge this risk. My hunch is that this strategy would not be as simple as 'invest in robotics and AI education', but can be broken down into smaller steps identified through careful workflow analysis. Automation does not always mean complex technologies; it can also mean simple tweaks to digitise in order to support some of our existing tasks. For example, working for a Dhaka-based firm in the past, I was tasked with organising and filing over three dozens of receipts to bill a client. I could not help but think why we would not take photos of the receipts, upload them on Google drive and send them to our client for approval. But alas, that would be considered rude in this particular context as the client was deemed so important that the Managing Director himself had to go file it in person. Aside from the age-old argument against bureaucracy/red-tape and unnecessary paperwork, this points out another issue stopping us from recognising our full potential towards increased efficiency through automation – our culture. We (myself included) love human interaction, but we fail to recognise the premium we often pay due to our traditionalist views. For starters, given the traffic in urban Bangladesh and other factors, perhaps a conscious effort to do away with in-person interactions can expedite the charge towards increased efficiency.
We have arrived at a crucial point in the cycle where, from now on, every time someone runs into a problem at work, it might be worthwhile to think: can this process be automated with existing technologies? A lot of the time, the answer would be yes – and each time that happens, one may discover a new source of competitive advantage if the cost of implementation is deemed reasonable.
Yes, it would not make sense for a country like Bangladesh to automate things right now, but that does not mean we should not be open to the idea. From a macro-international perspective, countries that position themselves accordingly through public-private sector collaboration will experience a significant 'unfair advantage'. We should not view the machine revolution as the evil force taking over our jobs, but as an effective tool towards increased productivity that will make our lives easier and hopefully, increase jobs relative to the ones threatened to be lost if we can train our workforce. We are not racing against machines; we are racing with machines. At least for now.
The writer is a second year undergraduate at Cornell University's School of Industrial & Labor Relations.
E-mail: [email protected]
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