Developing countries must develop local industrial capabilities with new technologies and skills that will allow them to become more integrated into world trade.
Findings have shown that the COVID-19 pandemic will accelerate the rise of industrial automation and enable manufacturers in developed countries to compete with low-cost labour in the developing world.
It has also shown that Multinational corporations will also begin repatriating some manufacturing production as a result of the unprecedented disruption the pandemic has caused to global value chains.
These amongst others are some of the key findings from the first virtual panel of discussion between representatives of the World Trade Organization (WTO), the United Nations Industrial Development Organization (UNIDO), and Africa-based technology company mPedigree at the Virtual Edition of the Global Manufacturing and Industrialisation Summit (GMIS2020).
The panel with the theme ‘Glocalisation: Localising production and capacity building for survival and success’ is the first of a sequence of weekly sessions of the #GMIS2020 Digital Series that commenced Tuesday and will lead up to the Virtual Summit on September 4-5, 2020.
While speaking, the Deputy Director-General of the World Trade Organization (WTO), Xiaozhun Yi, highlighted that more than a third of the predicted decline in world trade brought on by the COVID-19 pandemic was caused by a rise in trade costs and temporary disruptions to transport and logistics.
He stressed that the future structure of global supply chains depends on whether the pandemic accelerates two key trends that have been underway for several years.
“We believe that this pandemic may accelerate the trend of production automation and we know that this trend may reduce some opportunities in low skilled manufacturing,” Yi said.
Also speaking, Cecilia Ugaz Estrada, the Special Advisor, Directorate of Corporate Management and Operations, United Nations Industrial Development Organization (UNIDO), noted that automation erodes the comparative advantage that low-cost labour gives developing countries over developed countries.
