Mexico leads Latin America in robotization, followed by Brazil and Argentina
The number of robots installed in workplaces has been rising steadily for the past decade or so. It began with simple automated processing in manufacturing and agriculture and has been on a sharp incline since AI moved out of its applicability infancy. Whilst what has been dubbed as the Fourth Industrial Revolution has barely begun, robots and automation are having an increasing presence in our workplaces.
The number of industrial robots installed in the workplace globally has risen from 116,000 to 350,000 since the beginning of the decade. By 2020, that number is predicted to be as high as 521,000 according to the International Federation of Robotics, a growth rate of 349%. The increase in number has been due to the giant leap forwards in AI technologies and machine learning.
The majority of Latin America has struggled to adopt the digital infrastructure necessary to facilitate the Industry 4.0 technological transition within their economies. Latin America did not see the rapid transitions that occurred throughout Asia during the first digital revolution and missed out on the fruitful rewards of a digitalising economy.
However, Mexico, Argentina and Brazil have laid their digital foundations and are beginning to adopt the new technologies. The three powerhouses have the largest economies of Latin America and are outstripping their Latin peers in terms of digital maturity. The two are directly correlated and it signifies that the three countries are setting themselves up for future growth.
Together, they represent three of the four heaviest users of social networks measured by hours per day. This indicates a certain level of digital infrastructure is in place and that these countries are no foreigners to digital technologies.
There are two ways to analyse a country’s uptake of robots which perform automated tasks in the workplace, the first being sheer quantity, and the second, robots per 10,000 workers. Looking at the uptake of robots globally, South Korea leads with 631 robots per 10,000 workers, followed by Singapore and Germany. Quantity-wise, China has the most industrial robots, but in comparison to the workforce, sits at 68 per 10,000 – roughly the same as the United Kingdom.
Albeit at a marginally lower rate than its northern neighbours, Mexico leads the pack when looking specifically at the number of robots per 100,00 employees. The country has 32 robots per 10,000 employees which is on par with Poland, another country heavily focused on manufacturing. In real terms, the country has 6,000 robots installed across the country performing tasks from industrial manufacturing to agriculture.
Mexico’s economy thrives on manufacturing, driven by the country’s booming automotive industry. The auto industry is a hotspot for foreign direct investment with car companies investing billions of dollars each year. According to a Roland Berger report in 2016, Mexican vehicle production is predicted to double between 2010 and 2020 due to a dramatic industry expansion into new markets. Aided by robotics, the industry will only become more lucrative.
Brazil trails Mexico in both quantity of robots as well as per 10,000 employees. The country has 1,800 robots installed across the country, just over a quarter of the number in Mexico, which translates to 10 per 10,000 workers. The gap between the two reflects the state of a more digitalised economy in the country, with less of a focus on manufacturing in general. That being said, Brazil is the world’s largest exporter of soy products, sugarcane and beef, three industries that will see increasing automation in the future.
Argentina is reemerging as one of the region’s economic drivers after having spent the past decade in and out of recession. The country has struggled with the blue market exchange rate, making purchasing technological goods increasingly difficult. This has had a direct effect on businesses looking to digitalise, as buying products from abroad usually has to be done in dollars, which are sold at a higher rate of exchange and were impossible to get legally.
However, Argentina is going through a period of economic reforms led by the new business-friendly Macri Government and the situation is improving overall. This slow uptake of new technologies across industries is reflected in the low numbers of robots overall. The country however has more robots per 10,000 workers than in Brazil, although that number reflects the lower population in general (43 million in comparison to Brazil’s 207 million).
When looking at these three countries, it is possible to identify a common trend towards the uptake of Industry 4.0 technologies and the opportunities that will arise with them. There is also a fear that these technologies will take away vital jobs for low-skilled workers throughout the formal workforce and potentially push people back into the informal economy.
Latin Americans however have the skills that will thrive in an age of automation, skills which cannot be taken away by new technology. Creativity, empathy, collaboration and resilience are common Latin traits that will allow the human capital of the region to retain and increase in value if and when the shift begins to occur.
These social and behavioural traits are critical to innovation and entrepreneurship which could form the basis of Latin American economies in the digital age. However, one thing is certain, for Latin governments to prepare for the shift and better position their citizens it is necessary to build the foundations of digitally-literate workforce.