February 22, 2017

Global supply chains should and will change, as robots and automation substitute more and more for cheap labor.

Sir, Shawn Donnan, referring to a recent report by the World Bank writes that a “report by World Bank economists yesterday highlights the fragile state of one historically important engine of global growth — trade” “Policy uncertainty threatens trade growth, says World Bank” February 22.

And he follows up with “One of the big consequences of the explosion in trade agreements in recent decades has been the emergence of global supply chains. Such chains are widely seen by economists to have made businesses more efficient and to have helped boost productivity”

Indeed, but certainly more than policy uncertainty, what could currently affect global supply chains, is that these were based on cheap labor, and more and more cheap labor is being substituted by even cheaper and cheaper robots and automation.

What amazes me is that it is almost impossible to find any statistics; from for instance the World Bank, IMF and OECD, on how many jobs have effectively been taken over by robots and automation, for instance the last year. That to me sure represents a big lacking of data required for projecting tomorrow. 

@PerKurowski