will robots ravage the developing world? - chinese appliance manufacturers

This spring, when Midea, a Chinese home appliance maker, announced the acquisition of Kuka, a German robot maker, it seemed a sign.
KUKA produces robots that specialize in assembling goods in factory workshops-
It is this kind of work that has lifted millions of Chinese out of poverty.
After opening up to the outside world in 1979, China focused on developing a large amount of cheap labor. From T-
From shirts to Christmas decorations, Chinese manufacturers can sell to the world at low prices on any basic product by pulling another migrant farmer to the factory.
Investment poured into Chinese cities.
The factory is bigger, better and more advanced.
Wages rose, poverty fell, and the middle class emerged and expanded rapidly. This is a well.
The old road of development.
Japan, Hong Kong, Singapore and South Korea all move in the same way: start with simple products like clothing and textiles and then switch to electronics and other cuts
Edge goods and services.
As their company and employees become more and more experienced, they have accumulated more knowledge.
How diverse their economy is, their people are getting richer and richer.
Many developing countries still rely on this model today.
The problem is that robotics may fundamentally subvert it.
Despite a slowdown in global growth, industrial robot sales grew 12% between 2014 and 2015, quadrupling since 2009.
As robots get cheaper and better, use low
Skilled workers began to fade.
Even a humble sweatshop worker can hardly compete with the productivity of the robot, let alone its low error rate and other advantages.
In other words, in the case that poor countries could once use cost advantages to attract manufacturers, all cost advantages are disappearing in the robot era.
Whether in China or in the United States, the cost of using robots is the same. S. or Madagascar.
That's why Adidas now makes shoes in Germany. -
In a factory that is basically automated, closer to the customer, there is no risk, cost and complexity of a long supply chain. It's not alone.
From clothing to electronics, rich countries are shipping all their products back home. Wal-
Matt wants to re-
In the next 10 years, relying on increasing speed and reducing costs as a key competitive advantage, the production of goods worth $50 billion.
The impact of this shift should not be underestimated.
International trade day almost doubled.
The digital interest rate may have ended.
Historically, trade has grown twice as much as gross domestic product, but over the past few years trade has stagnated, 15% below expectations, according to the Peterson Institute for International Economics.
It is likely to be permanently stagnant.
In this new reality, the development plans of poor countries will have to be rewritten.
But it is not clear how to do this.
Investing in "Leap technology" could be the first step.
"What is the mobile phone --
Examples of this phenomenon are: because of mobile phones, poor countries are able to obtain all the advantages that mobile phones bring without laying land lines.
In the digital age, other technologies are likely to bring about similar changes.
China has become the biggest buyer of industrial robots, hoping they can help manufacturers make a leap to advanced electronics.
However, this technology would not be of much use without skilled labor.
A robot factory will require a minimum of low
But it requires engineers and computer scientists.
Investment in education--
Not only coding skills, but also the ability to seamlessly switch between products and create new products faster than competitors ---
Will be the key.
Developing countries should also consider programmes to attract skilled labor.
Among other things, offices have been set up in China and India to attract family-educated workers to rich countries.
Whether the government can afford it or not, investment in the people will become more and more important.
Finally, countries trying to promote growth can improve governance and domestic policies.
If trade is less important, they need to encourage direct investment flows.
If skilled workers are needed, they need to relax their Labor policies to attract educated immigrants.
If ideas are more important than ever, then they need to make life easier for entrepreneurs.
In short, they need to solve their own problems.
These are not easy.
It may not even prove that it can meet the challenge.
But robots are coming in one way or another.
Developing countries are the least prepared for this change. -
Most lost.
Contact the author of this story: Christopher Balding of cbalding @ phbs. pku. edu.
CnTo contacted the editor in charge of the story: Timothy Lavin of tlavin1 @ bloomberg.