Effects of Automation on Labour Markets in the Emerging Countries

Abstract

Europe and the Atlantic region have been the main attraction for the economic migration flowing all over the world. This migration results in a common fear and anxiety within the Western world, due to the high possibility of losing their jobs or working for fewer wages. However, the main factor that would shake the labour markets would be automation, rather than migration. Current developments in the automation field indicate that the peak point of automation could increase the employment problems of both local people and immigrants as well. As the machines gradually replace man-power (workers), this would result in massive unemployment scenarios. This concern existed during and after the Second World War, however, it gained speed with the introduction of the Fourth Industrial Revolution at the Hannover Fair in 2011. The purpose of this paper is to examine the effects of digitization and automation to the economy and especially to labour markets, in the period when the use of the physical and mental capacity of people is minimized and in the world where machines and systems such as "artificial intelligence", "Internet of Things", "new information technologies" are interconnected and intertwined. Countries that were mostly affected by the automation are the Far East countries, mainly China, due to the cheapest production, cheap labour and tax, and other conveniences. In this paper, through panel regression of data on the growth of investments in ICT and output per employed person, we examine and prove the impact of information and communication technologies (ICTs) on labour productivity on the example of several selected emerging markets in the period from 1990-2019.