Automation is a massive job displacer: Study
Technological change is increasingly favoring automation and robots over humans, creating anxiety among people who find the prospects of losing their jobs becoming greater with time.
As if that wasn’t enough, People have additionally become unnerved by the prospect of companies moving their jobs abroad, usually as a cost cutting measure, among other reasons.
The Global Services Location Index (GSLI) , a study by A.T.Kearney, a leading global management consulting firm, reveals plenty to confirm such fears and further explores the way automation impacted white-collar service profession jobs.
GSLI, which was released on September 22nd, helps companies make decisions about where to locate their offshore operations by analyzing 55 countries across three major categories: financial attractiveness, people skills and availability, and business environment.
Impact of automation
“We are now far enough into the trend toward automation to see that substantial job loss is inevitable in all countries involved in the BPO industry, as hundreds of thousands of low-skilled and repetitive jobs are replaced by automation,” said Arjun Sethi, partner and global head of A.T. Kearney’s Digital Transformation Practice and co-author of GSLI.
Johan Gott, A.T. Kearney principal and co-author of the study said: “Lower-cost nations have experienced tremendous increases in high-quality employment and transformational economic growth in recent years.”
“Indeed, this has been a large part of their economic development strategy. But now, automation is reversing the flow of countries such as India and the Philippines, which have benefited from labor arbitrage.”
Egypt tops GSLI
The study said that Egypt made great improvements in terms of financial attractiveness and the availability of skilled people which enabled it to advance on the Global Services Location Index.
“Egypt ranks number one in the MENA region, advancing two places from last year on a global scale,” said the study.
“In Egypt, the government’s decision to allow the local pound to float against the dollar and subsequent depreciation has given the country a competitive advantage. Egypt graduates approximately 500,000 students per year, with 10 percent in IT-related fields and other fields related to BPO, representing one of the largest qualified labor forces outside of India, adding further pressure, particularly in low skilled jobs,” it added.
The study added that United Arab Emirates ranked second in the MENA region and has advanced five places from last year on a global scale.
Chinese Huawei is an example of companies that have sought offshore destinations to support their expansion.
“Chinese Huawei opened a support and training facility to support 29 countries in the Middle East and Africa in the past 18 months, highlighting an emerging trend in which Chinese companies are seeking offshore destinations to support global expansion,” said the statement.