Is The Covid-19 Pandemic Fast-Tracking Automation In Developing Countries? Evidence From Colombia

Categories : Collaboration business models and managing change, Technology and Operational Enablers


Author: Bank of International Settlements

Recent evidence suggests that the Covid-19 pandemic has tended to accelerate the automation process in developed economies. The Bank of International Settlements assesses whether this is also happening in Colombia, a developing country characterised by a combination of low investment in research and development (R&D) and productivity, and high levels of informal labour and unemployment. In this context, the mobility restrictions imposed by the government in order to reduce the spread of the virus and the fear of contagion led to a reduction in labour supply, increasing labour cost relative to capital, which in turn could have enhanced automation.

This paper contributes to the literature about the pandemic’s impact on occupations more prone to automation, providing evidence from a middle-income country like Colombia with high levels of informal labour and unemployment. We measure the demand for new jobs during the pandemic using vacancies by occupations collected by the Colombian Public Employment Services Bureau and the total salaried employment level based on household surveys.