It could soon cost less to operate a factory of robots in the United States than to employ a human worker in Africa. That is the finding of a report from a London-based research organization. The report warns that automation may have a bad effect on developing economies. It says to avoid that governments must invest in digitalization and skills training.
Businesses traditionally have sent production work to the developing world where labor is less costly. But, technology may soon bring an end to that.
The policy research organization Overseas Development Institute recently examined furniture manufacturing in Africa.
Karishma Banga was a lead researcher. She says that in the next 15 to 20 years the use of robots to make furniture will cost less than Kenyan labor. By 2033, she says, it will be more profitable for American businesses to return production operations to the United States.
Robot costs are falling about 6 percent every year, but the cost of wages is rising every year.
Some businesses are trying to help the human workers who are competing with robots.
The Funkidz furniture factory in Kenya ended its traditional system of production. Now, skilled workers operate automated machines that use computer-aided designs.
The investment is successful. There has been growth and expansion into Uganda and Rwanda. But the company leader Ciiru Waweru Waithaka says she cannot find enough skilled workers.
She said, "There are many people who need jobs, yes, we agree, but if they have no skills... I would love to employ you, but you need a skill, (or) you cannot operate our machines."
She also said she is urging the government to help train workers.
The ODI report writers are doing the same. They say African governments should use the next few years to build industrial and digital skills among people before it is too late.
I’m Susan Shand.