Emerging Economies in an Automated World

Automation is the currency of manufacturing success. Countries like South Korea, with its unrivaled robot density of over 1,000 robots per 10,000 workers, have set a gold standard in the global race for automation supremacy. This level of integration isn’t just a technical achievement—it reflects decades of targeted policies, investments, and cultural alignment toward embracing robotics as a cornerstone of industrial strategy.

But what about emerging economies? Can they close the gap and position themselves as competitors in this high-stakes arena? Or are we witnessing the rise of an automation divide that threatens to widen economic disparities globally? For businesses and policymakers alike, understanding the forces behind this divide is key to crafting strategies that foster resilience, competitiveness, and sustainable growth.

The Automation Gap: Challenges Facing Emerging Economies

While global automation adoption is accelerating, the disparity between automation leaders and lagging economies is stark. In 2021, the global average robot density in manufacturing was around 141 robots per 10,000 workers, compared to South Korea's 1,000-plus. Adoption barriers are multifaceted, and for many emerging economies, they feel insurmountable.

1. Financial Constraints The upfront costs of industrial robots, collaborative robots (cobots), and automation infrastructure can be prohibitive. Emerging markets often lack the robust capital markets or government subsidies available in places like South Korea, Germany, or Japan. This financial gap forces many manufacturers in developing regions to rely on labor-intensive processes, foregoing automation productivity gains.

2. Skill Deficits The successful deployment of automation depends not just on acquiring the technology but also on having a workforce skilled enough to maintain, program, and optimize these systems. Emerging economies often face significant gaps in technical education and workforce training, creating a bottleneck for automation adoption.

3. Lack of Policy Support South Korea's automation dominance didn't happen by chance—it is the result of decades of proactive policy-making. Programs like the Fourth Intelligent Robot Basic Plan (2024-2028) emphasize strategic funding, R&D, and workforce development, ensuring alignment across the public and private sectors. In contrast, many emerging economies lack cohesive strategies or investment incentives to kickstart their robotics industries. [1]

Lessons from Automation Superpowers

For emerging markets looking to bridge the automation divide, South Korea offers a playbook worth examining. The country’s journey underscores that global leadership requires more than robots-it's about creating an ecosystem where automation thrives.

1. Strategic National Investments South Korea’s commitment to robotics is underscored by its ambitious goal to manufacture 80% of its core robot components domestically by 2030. By localizing production, Korea ensures supply chain resilience, reduces costs and fosters innovation. Emerging economies can take note: building local supply chains and incentivizing domestic manufacturing of automation components can mitigate financial barriers and boost regional industries.

2. Industry-Academia Collaboration Korea has effectively bridged the gap between industry demands and academic expertise, training over 15,000 specialists in its robotics sector. For emerging markets, fostering partnerships between universities and businesses could create a pipeline of talent equipped to handle automation. This approach ensures that as technology advances, the workforce remains adaptable and relevant.

3. Incremental Adoption with Cobots While South Korea leads in robot density, its manufacturers have also embraced cobots, which work alongside human employees to enhance productivity without replacing jobs. Cobots offer a more accessible entry point for manufacturers with limited budgets. Their adaptability and ease of use make them ideal for high-mix, low-volume production—a common scenario in emerging markets.

Cobots: A Gateway to Inclusive Automation

For small and medium-sized enterprises (SMEs) in emerging economies, cobots represent an opportunity to sidestep some traditional automation barriers.

Affordability Meets Flexibility Unlike industrial robots, cobots are designed for affordability and modularity. Manufacturers can start small by integrating one or two cobots into their production lines and scaling up as they see returns. This phased approach aligns well with emerging markets' financial realities and minimizes risks associated with large-scale automation investments.

Collaborative Work Environments Cobots shine in environments where human dexterity and machine precision complement each other. For example, a cobot can handle repetitive or physically taxing tasks, freeing up human workers to focus on higher-value activities like quality assurance or customization. This balance boosts efficiency and preserves jobs, addressing workforce displacement concerns. [2]

Global Competition: The Risk of Falling Behind

Automation divide implications extend beyond individual businesses or sectors—they shape global economic dynamics. Emerging economies that fail to adopt automation risk becoming uncompetitive in global supply chains. This is especially true as multinational corporations increasingly prioritize speed, precision, and consistency in manufacturing.

Supply Chain Realignment Automation leaders like South Korea are reaping the benefits of reshoring, as advanced robotics allow manufacturers to produce goods closer to home at competitive costs. For emerging economies reliant on export-driven industries, this trend poses a significant threat. Without automation, they risk losing their low-cost labor advantage, as robots narrow the cost gap.

Productivity Disparities Automation confers productivity advantages. According to the International Federation of Robotics (IFR), countries with high robot densities report faster industrial growth and higher GDP per capita. Emerging economies that fail to catch up risk entrenching existing inequalities, as automation leaders continue to widen their lead in global competitiveness.

Opportunities for Closing the Gap

While the challenges are significant, emerging economies have unique opportunities to close the automation divide. This is done by leveraging strategic partnerships, focusing on niche markets, and adopting innovative technologies.

Leveraging Global Partnerships Collaborations with established automation leaders can accelerate adoption. For instance, partnerships with companies like TM Robotics, a global leader in cobots, offer access to cutting-edge technologies without extensive in-house R&D. Emerging economies can benefit from shared expertise, training programs, and flexible business models, such as leasing or revenue-sharing agreements.

Targeting High-Growth Sectors Emerging economies don’t need to compete with automation superpowers across every sector. By focusing on high-growth industries like renewable energy, healthcare, or precision agriculture, they can carve out niches where automation drives measurable impact. For example, deploying cobots for solar panel assembly or crop monitoring can deliver both economic and environmental benefits.

Harnessing AI and IoT The convergence of AI, IoT, and robotics offers a pathway for leapfrogging traditional barriers. Smart factories equipped with IoT sensors and AI-driven analytics can optimize production processes, reduce waste, and improve decision-making in real time. Emerging economies can adopt these technologies to gain a competitive edge, even without South Korea’s robot density.

The Road Ahead: Strategic Action for Emerging Economies

Bridging the automation divide requires a multifaceted approach, blending government initiatives, private-sector innovation, and workforce development. Emerging economies must view automation not as a distant goal but as an immediate priority that shapes their industrial future.

Invest in Education and Training Building a workforce capable of supporting automation is non-negotiable. Governments and businesses must invest in upskilling programs, technical education, and on-the-job training to create a talent pool that drives automation adoption.

Create Incentives for Adoption Tax breaks, low-interest loans, and subsidies for automation equipment can reduce financial barriers for SMEs. Emerging economies should also explore creative financing models, such as public-private partnerships, to fund large-scale automation initiatives.

Foster Local Innovation Finally, fostering a innovation culture can spark grassroots solutions to automation challenges. Hackathons, incubators, and research grants can empower local entrepreneurs to develop technologies tailored to their markets' unique needs.

Conclusion: Closing the Divide with Purpose

The automation divide is not an inevitability—it’s a challenge that can be addressed with the right vision and strategy. Emerging economies have the opportunity to chart their own paths by leveraging their unique strengths. They can also learn from automation leaders like South Korea.

For manufacturers, the message is clear: automation is no longer a luxury but a necessity. By starting small, partnering strategically, and focusing on long-term growth, businesses in emerging economies can position themselves as competitive players in the global arena. In a world where automation defines success, the time to act is now.

References:

[1]: Global Robotics Race: Korea, Singapore and Germany in the Lead: https://shorturl.at/JJ0XY

[2] Five reasons for SME manufacturers to consider collaborative robots: https://shorturl.at/hAMqB