The fourth industrial revolution (4IR) - characterized by new technologies including artificial intelligence (AI), robotics and internet of things reshaping the world as we know it - is posing significant development challenges as well as opportunities for Bangladesh. Creating jobs for the growing number of graduates is the first one, followed by the government’s economic aspiration of reaching high income country status. On top of that, Bangladesh has set the target of attaining the sustainable development goals (SDGs) by 2030. Moreover, there is often a development and policy dilemma: the rush for attaining rapid economic growth often adversely affects the attainment of SDGs. On the other hand, labor-saving technology drives economic growth, but at the cost of some jobs. How to address these emerging challenges has been at the core of the development discourse in Bangladesh.
Bangladesh’s economic success over the last two decades has been quite impressive. The commercialization of low skilled labor has been at the core of this success. The engagement of low skilled labor into productive activities has not only accelerated economic growth but also increased financial resources at the bottom of the pyramid. As a result, many socio-economic indicators, including poverty, witnessed substantial positive change. In addition, the advancement of ICT infrastructure, the rapid penetration of voice and internet services, and the transformation of service over digital space are strong enabling factors for growth. The end of the 3rd industrial revolution created the scope for integrating low skilled labor force with the global value chain, through the expansion of export-oriented ready-made garment (RMG) industry at home and sending Bangladeshi workers abroad.
4IR erodes labor centric competitive edge: However, Bangladesh’s labor centric competitive advantage has been showing signs of running out of steam. Innovations around the technology stack of the fourth industrial revolution like automation have been limiting the scope to earn more per unit of low skilled labor. As a result, in response to the recent increase in the minimum wage for factory workers, there has been a rapid growth of high-end technology adoption in the RMG industry, causing job loss. The impacts can be particularly acute given the lack of export diversification in Bangladesh. Notably, the impacts are gendered, and women are worse sufferers due to the increasing penetration of automation as many of the specific jobs most at risk from automation skew heavily toward manufacturing, which can impact the predominantly female RMG labor force. Moreover, a lot of jobs are likely to be created in the tech sector where currently there is very little representation of women, which highlights the need for TEVT and IT sector focused education and skill building for women.
4IR offers ideas to sharpen economic edge: At the inflection point of the fourth industrial revolution, Bangladesh’s age-old competitive advantage has been losing the edge. Labor-saving technology is reducing labor content in productive outputs. To compensate for it, the economy is not proportionately expanding. Consequentially, Bangladesh has already started to experience net job loss, particularly in the RMG sector. A2i’s estimates indicate that Bangladesh is likely to suffer 5.5 million job losses by 2041. Although 4IR is posing a threat to scaling up labor-based value addition to economic output, the underlying technology stack offers the opportunity to generate innovative ideas. These ideas could be harnessed to make Bangladesh’s current produce better and cheaper while reducing harm to the environment. This is an opportunity for Bangladesh to engage the growing number of university graduates to harness the creative side of 4IR, opening the door of a new phase of economic growth. Moreover, the success of trading ideas, as opposed to labor, often leads to higher income from per unit of working hours.
The exploitation of innovation opportunities out of 4IR technology core is vital, if not the only option for Bangladesh to simultaneously address its development challenges. To step into the innovation economy, Bangladesh needs to re-orient its strategies and policies of major areas like industry, trade & commerce, education, and fiscal regime from the current factor-driven one. Once Bangladesh succeeds in building an innovation ecosystem suitable for harnessing 4IR’s creative power to fuel an innovation economy, the challenges of attaining SDGs will start to diminish. There is no denial that directional failure should be addressed too. In fact, harnessing the 4IR’s innovation opportunity offers an invaluable prospect of meeting economic aspirations, attaining SDGs, and creating high-paying jobs for a growing number of graduates simultaneously.
Task level analysis for understanding the future of work: There seems to be ongoing debates for dissecting likely implications of 4IR on the labor market. Due to the absence of a robust thinking framework, there have been wild variations in making predictions of 4IR on the global labor market, and Bangladesh is no exception. Likely job loss figures vary significantly from 1.8 million job loss worldwide by 2020 to over two billion by 2030. Such variations often cause confusion, leading to a lack of actions. As a matter of fact, such reality may have created perplexity regarding the acceptance of the likely 5.5 million job loss figures in Bangladesh by 2041. To address this situation, a common thinking framework is needed for bringing clarity among diverse stakeholders, which is vital for developing a shared understanding leading to a synergistic approach of resource mobilization and deployment.
To bring added clarity about likely implications of 4IR on future of work, the focus should change from occupation to task-level analysis. From a few million to billions, high variation in global job loss estimation appears to be due to occupation level focus. But designers of robotics and automation do not target occupation. Instead, they aim for individual tasks. Each of the tasks comprising a profession does not pose the same technological and economic challenge to automate. As a result, transformation takes place at the task level. Moreover, the skill requirement for the individual tasks of an occupation varies. Therefore, the focus needs to be on task-level analysis to improve precision in the estimation of skill transformation.
Sharpening innate abilities for attaining labor advantage and leveraging 4IR for economic expansion: The role of innate abilities in productive activities should also be taken into consideration. As opposed to codified knowledge and skills, which are developed through education and training, innate abilities are far more difficult to automate. For maintaining labor demand, the focus should be on sharpening the innate abilities of the workforce. In addition, Bangladesh should expand productive activities in those areas that demand high-level innate abilities. Particularly, focus should be given to those innate abilities in which women have a strong natural advantage. Moreover, Bangladesh should adopt, adapt, and advance 4IR solutions, such as robotics, AI, and automation, to expand the economy faster than the labor-saving or job loss rate. In fact, faster economic expansion by leveraging technological innovations in the globally competitive market, as opposed to protection and incentives, is the key to attaining Bangladesh’s development agenda.
Innovation capacity expansion for levering 4IR to attain SDGs: The SDG attainment perspective in the age of 4IR primarily depends on the capacity of both national and global innovation systems. The role of competition to profit from 4IR ideas through the redesign of products and processes is critical for attaining the SDGs. For example, the redesign of the energy consumption system will lead to lower cost and less emission. In the absence of linkage with the market, increasing the science and technology (S&T) base alone does not empower Bangladesh to leverage S&T to attain SDGs. Similarly, due to the lack of competition to refine ideas targeting SDG attainment through a flow of S&T knowledge, grassroots level or local ideas do not scale up as sustainable solutions in this competitive market economy. It appears that Bangladesh’s innovation system has been suffering from the market, system, and directional failures. To address these critical failures, Bangladesh needs to begin a very high-level transformation. Moreover, public incentives for innovation should be geared towards stimulating profit-making competition. On the other hand, in the absence of public investment for R&D, and incentives for entrepreneurship, potential ideas often do not surface as better means for getting work done. Hence, demand for 4IR innovative ideas must be stimulated to develop a sustainable system capacity—the market for ideas.
Unfortunately, there is no perfect model for Bangladesh to replicate. Bangladesh should rather follow an iterative and gender sensitive approach of learning, experimenting, and fine-tuning of this basic strategy:outperforming the competition by redesigning products and processes through a flow of 4IR ideas from learning and technology advancement for offering successive better versions at less cost (by consuming and wasting less), and entering into production of new products either through redesign of existing products, or innovating substitutions around emerging technology core. The success of developing the fine-tuned innovation system to leverage 4IR innovations for meeting SDGs, through profit-making competition of firms in taking ideas to market, will take Bangladesh to the orbit of the innovation economy. Progress along this line is crucial for Bangladesh to increase total factor productivity and drive economic growth for meeting its goals targeting 2030 and 2041.
SDG focused S&T capacity uplifting: As opposed to giving generic impetus to Science and Technology (S&T), Bangladesh should focus on SDG attainment by ideas around 4IR technology stack. The focus should be on detecting, screening, and nurturing innovation potential to make it easier to attain each of the SDGs. Despite the high potential, prospective 4IR innovations will require continued upgrading of both products and processes through a series of redesign, supported by input of knowledge. To support this flow of knowledge, R&D capacity should be uplifted for adopting and adapting to global offerings and advancing them further for creating profitable opportunities for local firms.
Despite the job loss fear factor, exploitation of the innovation potential of 4IR’s underlying technology stack opens the opportunity for (i) creating high paying jobs for graduates, (ii) increasing competitiveness of what Bangladesh produces now, (iii) entering into new high-value addition productive sectors, and (iv) improving the effectiveness and efficiency of resources in attaining SGDs.
The challenge is to develop a globally competitive local innovation system by addressing three major failures: i. Market, ii. System and iii. Directional. In addressing them, a conducive culture of innovation and entrepreneurship should also be given due priority. Stakeholder consultation indicates that the current focus has been mostly on collecting data, as opposed to designing programs and projects for attaining SDGs by leveraging 4IR technology stack. It appears that there is a need to develop a map for establishing linkages between 4IR technologies’ potential and the attainment of SDGs, targets, and indicators. The strategy should follow this mapping exercise by addressing the market, system, and directional failures. Such a map would be useful for concerned departments in developing projects. On the other hand, for the future of work issue, the focus should change from occupation to task-level analysis for predicting likely transformation, skill development, innate capability sharpening, with a focus on women. This can ensure expansion of economic activities for all, ensuring that the newest industrial revolution, unlike the previous ones, is truly inclusive and leaves no one behind. In light of these insights, Bangladesh needs to re-imagine the impacts of the fourth industrial revolution on the future of work and SDG attainment as a unique opportunity to be welcomed, not a problem to be confronted.