A research paper by UBS has predicted that a combination of automation and connectivity will see the competitive advantage of low labour cost countries shrink, but also lead to rising inequality.
Released at the 2016 Davos World Economic Forum, the research argues that the effect of the “Fourth Industrial Revolution” will have the greatest effect on developing markets.
It describes the revolution as following steam, electricity and electronics, and involving a joining of “extreme automation” and “extreme connectivity”.
Low-skilled jobs will be affected, and middle class roles will also be increasingly automated out of existence. “Middle skill” employees would feel the “greatest disruption”.
“Inequality increases not just between developed and developing and emerging countries,” explained UBS chairman Alex Weber, according to Sputnik News.
“It’s also within our society. It will have an impact not only between the rich and the poor but also the young and the old.”
Tech Republic notes that an increase in aggregate worldwide unemployment, however, is not modelled in the research, with workforce productivity increasing and new jobs being created.
Also anticipated is a reshoring of manufacturing to higher-wage countries, driven by robotics, automation and 3D printing.