The thorny issue of automation across Latin America

How Latin America needs to respond to automation

Globally, companies and governments are racing to address the impact of automation as more and more sectors integrate automated processes. Jane Fraser, CEO of Citigroup’s Latin America business told attendees at Fortune‘s Most Powerful Women Summit in October that “we are going to move from people to things. We are expecting 500 billion objects to become connected to the internet and this automation is going to hollow out middle and working class jobs. Technology is replacing these jobs.” While fear mongering around job loss as a result of automation is widespread, it is still unclear how countries are responding to this evolving workforce environment. For Latin America, in particular, there are no safety nets for the effects of this shift, Fraser warned in her address.

Mark Kamlet, Professor of Economics and Public Policy at Carnegie Mellon University's Heinz College believes that Fraser is completely correct. “I believe those who do not think this is the case are 'automation deniers', and I anticipate that it will not only be workers in America who are affected,” he says.

David Poole, co-founder and CEO of Symphony Ventures, emphasises that the benefits of robotic process automation (RPA) are the same in Latin America as they are globally. “The incredibly powerful opportunity for enterprises to reduce costs, improve customer satisfaction and tighten controls is universal and is accessible to all companies, he says. Poole believes that adopting RPA early could give organisations in Latin America a competitive boost in global markets, but those that are slow to react will fall further behind their competitors in other nations that are pushing very hard into automation adoption.

“In order to prepare for this shift, LatAm countries should take the same steps that other countries are pursuing: focus on educational efforts to upskill their current labour force,” he says.

The appeal of automation is clear: automation can perform mundane, rules-based work, much faster and more efficiently than people assigned to such tasks. Poole says that administrative roles that can be performed by robotics will ultimately be eliminated, which will free employees up for more entrepreneurial, value-added roles within the organisation.

“Often, growing companies are not using RPA to reduce headcount, but to make their current workforce more efficient, so they can do more but with the same or smaller budget than before,” he says. Poole explains that while the fear of job loss is nothing new, the prospect of job creation as a result of automation is; new jobs and alternative roles will be established, but these alternatives are likely to emerge much slower in economies less able to adapt through changes in education and training.

Carlos Meléndez, COO and co-founder, Wovenware, says that while it is clear that IoT and automation will replace humans in many service industry jobs, it will impact LatAm countries later than in the US because there is still a considerable cost advantage in using service providers in regions. He cites the example of the Dominican Republic, since the lower wages of customer service reps (CSRs) there make it easier for them to compete against the current value equation offered through automation, such as chatbots and other cognitive solutions.

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