The industrial cordons of the big cities, the chimneys, the uniformed workers exiting factories, all at the same time seem like postcards of a Western world that is changing, or at least is changing. Large-scale industry is increasingly concentrated in the east of the globe.
In 20th century America, manufacturing employment was synonymous with upward mobility, especially for people without a college education. Factories offered high wages, stability, unionization, and opportunity in cities such as Pittsburgh, the “Steel City” and Akron, the “Rubber Capital.” In the 70’s, One in four U.S. workers was employed in manufacturing.
According to the Economist magazine article “Factory work is overrated,” today… This number has decreased to less than 10%, with only 4% of workers working directly on the production line. More than half of the jobs classified as “industrial” are actually support or professional jobs, such as human resources, marketing, design, and engineering. Even countries with large industrial surpluses, such as Germany, Japan, and South Korea, are seeing a decline in the proportion of factory workers. Amazing facts: China cut manufacturing jobs by about 20 million between 2013 and 2020.
Classical industry also lost ground in Argentina. There are still potential brands, such as being one of the 32 car-producing countries, but the Buenos Aires suburb is synonymous with a veritable factory graveyard, starting in the 90s and adding more plots every year.
In America, this phenomenon It can be seen as deindustrialization, but it can also be seen as a synonym for progress.Either. In fact, American factory output today is more than double what it was in the 1980s in real terms. U.S. factories produce more than Japanese, German, and Korean factories combined. As a country, it is the 8th largest economy in the world. Of course, they’re doing it with fewer people. As a result of automation, digitalization and changes in consumption structures, factory employment is decreasing and services are now prioritized over goods.
Business is always changing, but its nature is changing. Technology is a key driver of global business change, with generative artificial intelligence (Gen AI) at the forefront, according to Accenture’s Pulse of Change study, based on input from more than 3,000 executives around the world. Latin American companies are no exception. For example, a Brazilian CEO considered adaptation to technological advances as a main priority for 2024and by 2025 technological disruption will be in their top three concerns.
However, almost half (44%) of these executives admit that they do not feel adequately prepared to face these changes. And they aren’t alone. Workers are also wondering what a future defined by Gen AI will look like. In fact, three out of four Brazilians believe their position will be significantly impacted or completely changed by this technology, requiring retraining to stay competitive in their role or move into a new role.
Nevertheless, analysis of the magnitude of the impact that generative AI could have on Latin America has rarely been considered. According to Accenture, generative AI has immense potential to accelerate value creation across Latin America. However, like any other disruptive technology, his first steps are crossed by uncertainty. Media messages also reflect this. After the launch of ChatGPT, concerns about job losses dominated the headlines. Recently, discussions have focused on data privacy. However, a closer analysis allows us to question some common myths. .
Accenture has developed three different growth scenarios to compare how different approaches to generative AI adoption change its impact. “Aggressive”, “Careful”, “Human-centered”. These take into account key variables such as pace of recruitment, likelihood of changing jobs, quality of work, and likelihood of transfer.
As the Economist article puts it, the lesson is clear. The heart of the working class no longer beats in factories. Just as happened in agriculture after the Industrial Revolution, manufacturing jobs are being displaced by technology and demographic changes. The challenge is not to reconstruct a glorified industrial past, but to actually improve the quality, productivity and dignity of growing jobs. Perhaps this also means deploying tools such as artificial intelligence to increase the value of personal and technical services. The question is whether countries like Argentina are investing to secure the workers needed for a new industrial revolution.
Argentina knew how to grow with the industrial model that today the world is in crisis. At the same time, the current government decisions do not seem to focus on this industry, at least the one that has developed in this country, where in addition to large companies a universe of small and medium-sized enterprises (SMEs) has been built, which today sees imports from China and other Asian countries as a real threat. Meanwhile, technology-based service companies are flourishing.. The best example is Mercado Libre, which within a few years became a multinational company and Argentina’s largest company.
There are also contentious debates in traditional industries. The main one is that despite being called a subsidized industry, there are laws that ensure that technology companies are exempt from some of the taxes they pay.
Still, threats exist in both industries. That threat is China. in fact, More and more Argentines are buying imported products and using the country’s platforms such as Temu and Shein.
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