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Have Robots Grounded the Flying Geese? Automation and Offshoring in Europe’s Manufacturing Sector

February 20, 2020

MC C2-350, World Bank MC building

MULTIMEDIA

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  • During the last few decades, manufacturers all over the world have outsourced production to countries with lower labor costs. This shifting production of labor-intensive goods and tasks to countries with lower labor costs in a pattern that then reproduces itself is often described as the “flying geese” paradigm.

    Today, however, there is growing concern that robotization in high-income countries will challenge this shifting international division of labor.

    But is there another dimension of automation that could in fact be a boon to Europe?

    If labor is becoming a smaller share of costs and high-quality infrastructure, and access to skilled technicians and close links with suppliers relatively more important determinants, then Europe should stand to gain from the latest waves of technology.

    This discussion will focus on the impact of automation on offshoring and how patterns of automation are affecting greenfield foreign direct investment (FDI) decisions, a forward-looking indicator of where production is expected to look at the following three questions:

    First, as a leading center of global value chains – and leader in the production of robots – how much are European manufacturing firms changing their investments abroad as they automate?

    Second, what are the implications within Europe – will reshoring help or hinder convergence within Europe?

    Third, what are the implications for Europe’s trading partners in developing countries?

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    Related Reading

    Have Robots Grounded the Flying Geese? Evidence from Greenfield FDI in Manufacturing (Policy Research Working Paper)

    Trouble in the Making? The Future of Manufacturing-Led Development (Publication)

  • Asli Demirgüç-Kunt

    Chief Economist, Europe and Central Asia, World Bank

    Asli Demirgüç-Kunt is the Chief Economist of the Europe and Central Asia Region of the World Bank. Over her 30-year career in the World Bank, she has also served as the Director of Research, Director of Development Policy, and the Chief Economist of the Finance and Private Sector Development Network, conducting research and advising on financial and private sector development issues.

    Mary C. Hallward-Driemeier

    Senior Economic Advisor, Finance, Competitiveness & Innovation Global Practice, World Bank

    Mary Hallward-Driemeier is a Senior Economic Adviser in the Finance, Competitiveness & Innovation (FCI) Global Practice at the World Bank Group, overseeing the analytical agenda on issues of private sector development, technology and productivity. A Canadian national, she joined the World Bank in 1997 as a Young Professional. She has published widely on entrepreneurship, firm productivity and firm dynamics, the impact of financial crises, and women's economic empowerment.

    Federica Saliola

    Lead Economist, Social Protection & Jobs Global Practice, World Bank

    Federica Saliola is Director of the World Development Report 2019. Prior to this position, she was a Manager in the Development Economics Global Indicators Group. In that role, she was responsible for developing global programs with a focus on policies and regulations across a number of thematic areas, including agriculture and agribusiness, skills, information and communication technology, public procurement and PPPs. She has published in peer-reviewed journals, including studies on firm productivity, global value chains, and the impact of regulation on growth and competition.

Details

  • Date: February 20, 2020, 10:00AM-11:30AM
  • Venue: MC C2-350, World Bank MC Building
  • Chair: Asli Demirgüç-Kunt, Chief Economist, Europe and Central Asia, World Bank
  • Speaker: Mary C. Hallward-Driemeier, Senior Economic Advisor, Finance, Competitiveness & Innovation Global Practice, World Bank
  • Discussant: Federica Saliola, Lead Economist, Social Protection & Jobs Global Practice, World Bank
  • CONTACT: Ekaterina Ushakova
  • eushakova@worldbank.org