Outsourcing production by using cheap labor in the developing world has underpinned the global economy for decades.
But technology could be about to turn that on its head.
Research from the Overseas Development Institute focused on the example of furniture manufacturing in Africa.
In the next 15 to 20 years, robots in U.S. are actually going to become much cheaper than Kenyan labor, particularly in the furniture manufacturing industry. So this means that around 2033, American companies will find it much more profitable to reshore production back.Which means essentially get all the jobs and production back from the developing countries to the U.S. And that obviously you know can have very significantly negative effects for jobs in Africa.
As robots are getting cheaper, people are getting more expensive.
So the cost of a robot or the cost of a 3D printer, they’re declining at similar levels, around 6 percent annually. So that’s a significant decline，whereas wages in developing countries are rising.
By 2038, the ODI predicts it will be cheaper to make clothing in the United States using robots than to import it from Ethiopia.
Last year Sports giant Adidas invested in automated plants in Germany and the United Statesincluding using 3d printers to make these sneakers.
That has led to loss like 1,000 jobs in Vietnam until now and that’s going to be significantly increased in the future.
Adidas bosses say they do not envisage further large-scale reshoring of jobs.
But there is no doubting the challenges posed by automation to manual labor in developing countries.
Some are fighting back.
Kenyan firm Funkidz has invested heavily in computer-aided design and manufacturing of furniture.
Using these technologies they’ve been able to achieve impressive growth and they’ve also expanded to regional markets like Rwanda and Uganda.
Funkidz CEO says the government needs to match her firm’s enthusiasm for technology.
We have machines that sit idle because we don’t have skilled people. There are many people who need jobs, yes, we agree, but if they have no skill… I would love to employ you, but you need a skill, otherwise you cannot operate our machines.So we are urging all institutions, government, please let us take this skills gap as a crisis."
That call is echoed by the ODI report authors, who urge African governments to use the current window of opportunity to build industrial capabilities and digital skills before the jobs crunch hits.
Henry Ridgwell for VOA News London