China Labour Bulletin is quoted in the following article. Copyright remains with the original publisher.
Jul 17, 2015
Writing in these pages in February 2013, I drew attention to the accelerating march of automation and robotics, identified jobs as the looming national security issue, and rather rhetorically suggested it was getting time for a non-proliferation treaty on robotics in manufacturing.
The article was reproduced by several Asian newspapers as well as some Western websites, where some critics promptly slammed me as a Luddite. With a son who teases me about being "technology challenged", I thought it wise to drop the subject for a while. Who wants to be regarded as uncool!
This year, robotics and automation has been a popular subject for the commentariat. Even so, what prompts me to return to the theme are some developments I see as straws in a gale of technological change. They have profound implications for Asia.
In March, Mr Herbert Hainer, chief executive of German sporting goods giant Adidas, said he expected to return shoe production to Germany, thanks to the steady advance in robotics that had helped automate the making of shoe "uppers". This will be combined with 3D printing to help produce customised soles.
In May, Harvard Business Review reported that UPS, the global delivery company, is building on its third-party logistics business to turn its airport hub warehouses into mini-factories by using 3D printing technology. This is a forerunner to a time when distribution companies themselves become producers.
Two weeks ago, the United Arab Emirates said it would build layer by layer the first fully functional 3D "printed" building, using a 6m-tall 3D printer.
Meanwhile, engineers in Perth had created Hadrian, a robot that can lay as many as 1,000 bricks per hour. That's 20 times faster than a human bricklayer.
In the same week, Volkswagen, the German carmaker, revealed that a robot had grabbed a factory worker and crushed him against a metal plate, killing the man.
Now Adidas is one of the more transparent multinationals, and publishes its global factory list of primary contract suppliers.
So just how many nations in Asia could be potentially impacted by its decision to do "reshoring"? A search showed Cambodia had 22 primary suppliers to Adidas. India and Indonesia had some 30 and 40, respectively. China, unsurprisingly, had the largest number - more than 200 factories. Malaysia, the Philippines, Pakistan and Japan also formed part of its supply grid.
Adidas is just one company, you might say. But it gives jobs to several hundred thousand people in Asia. Wahyudi Soeriaatmadja, this newspaper's Indonesia Correspondent, says just three suppliers - Panarub Industry, Panarub Dwikarya and Framas - account for more than 20,000 jobs.
Since nine out of 10 pairs of shoes sold worldwide are said to be made in Asia, what if you extended this to Nike, Reebok and Bata? Not to speak of Gap, Levi Strauss, Victoria's Secret and many of the other apparel and inner-wear brands that source substantially from us? I checked my wardrobe the other day and discovered golf caps and cargo trousers made in Bangladesh, shirts from Vietnam and T-shirts from Cambodia.
To be sure, not all production will leave Asia. Proximity to the big population centres of China, India and Indonesia compels companies to have a presence here. But a lot of the production could indeed disappear and a good part of what's left may well be automated.
Take construction, another area that needs large inputs of labour.
In Asia's largest nations, the move to the city is only gathering pace. China's growth story will not end any time soon, at least not until it is substantially an urban nation. Indonesia, at 54 per cent urban population, is roughly in the same situation as China. India, with only one-third of its people in cities, has even more legs.
This is where Hadrian, the bricklayer robot, bears watching. The Philippines and the southern Indian state of Kerala are two extreme examples of "money order" economies that depend on overseas remittances, particularly Gulf states such as the UAE and Qatar. Half of the 188,000 jobs that Qatar will let Filipinos fill this year are going to workers in construction and allied sectors. About a fifth of the UAE's resident population is Filipino, and construction workers are a substantial chunk.
Mr Mohammed Al-Gergawi, UAE's minister for Cabinet affairs and chairman of the UAE National Innovation Committee, calls the 3D-printed building "the first step" of many more innovations to come.
What of the Volkswagen robot that attacked the worker? While the incident will be remembered for its sheer scariness, it also portends another direction in which robotics will apply.
Future armies may be far less reliant on foot soldiers. Robots, especially the soft-body ones under development, conceivably have battlefield applications that could cut the need for humans to be out in the front. Who would not prefer to send a machine, rather than a human, in harm's way?
Armies are huge employers.
The People's Liberation Army, for instance, has 2.3 million under arms, some 50 per cent more than the second-biggest Chinese employer, China National Petroleum Corp.
The Indian military employs 1.3 million men, almost as many as Indian Railways and Coal India. Because robots need not be paid a pension or salary - two items that tend to consume the bulk of many military budgets - the incentive to make machines do a lot of the work is huge.
Asia's planners need to appreciate that the advance of automation and robotics is rather like the mobile phone revolution two decades ago. In the early 1980s, US telecoms giant AT&T hired McKinsey to make projections for cellphone use at the end of the century. The estimate returned by the firm - which took into account the brick-size nature of the devices, their poor battery capacity, and the huge cost of cellular networks - was that the market would be less than a million. AT&T then decided to pull out of the field, a decision it had to reverse later.
To be sure, the continuing Asian infrastructure boom, Qatar and Dubai's frenetic building of facilities ahead of likely bids for the 2024 Olympics and the reality that robots, as yet, cannot "handle" fine textiles should be taken as a window to prepare for the emerging industrial landscape. Already, more than 200 million people worldwide are out of work, 30 million more than in 2008.
"Imagine how new, highly capable printers might replace highly skilled workers, shifting entire companies and even manufacturing-based countries into people-less production," says Prof Richard D'Aveni, professor of strategy at the Tuck School of Business at Dartmouth.
"In 'machine organisations', humans might work only to service the printers."
Countries like Singapore, firmly set on the productivity path, will probably escape the worst of this trend. Indeed, it may well profit from the new flows that emerge.
But for a host of others, including big nations with young populations such as Indonesia and India, the demographic dividend they anticipate could turn into a disaster. Jobs not only boost purchasing power in domestic markets, but they also keep people busy and focused. In developing nations, they also have other effects that are not fully appreciated. When a Bangladeshi or Indonesian woman has an independent source of livelihood, she gets a decisive say in everything, from the number of children she bears to the way she dresses. Fundamentalist ideology is also less easily spread in such homes.
Likewise, armies are more than about guarding frontiers. As one of the last true meritocracies, drawing men from around the nation and every social strata, they also form a key national glue.
The lesson from all this is not so much to resist technology as to prepare for it. Indeed, the pace of change will be so rapid that there may come a time soon when college science degrees, just like Singapore's certificates of entitlement (COEs) for vehicles, have a set validity period.
It is important that Asia be prepared because the march of automation, robotics and 3D printing will add to tensions that society is facing from a host of disruptive technologies.
China Labour Bulletin, for instance, reported this month that it recorded 568 strikes and worker protests in the second quarter of this year, bringing the total for the year so far to 1,218 incidents. That's close to the number for the whole of last year. Taxi drivers and factory workers were in the forefront.
Taxi drivers? Because they were angry at ride-hailing apps like Didi Kuaidi and Uber that already provide four million trips a day in China. These apps had not hurt jobs, merely redistributed business.
What when the Foxconns of the world hand most of the jobs to machines?
Ravi Velloor writes fortnightly on Asian affairs.