Digitalization and smart manufacturing in the automobile industry. Possible labor effects in the South

Type de publication:

Conference Paper


Gerpisa colloquium, Paris (2019)


digitalization, Organizational Change, reorganization of work


In the past decade, we have witnessed how traditional manufacturing relationships have rapidly changed and allowed for new forms of interaction. This research suggests that we are facing a disruption of the traditional markets guided by traditional industries towards the creation of new industries and consequently new markets and job requirements. This is particularly notorious when we compare the manufacturing relationships between North and South.
In recent years we have witnessed how traditional manufacturing relationships between North and South are rapidly changing and allowing for new forms of interaction. On the one hand, the industrial restructuring processes – with important digitalization efforts - of emerging countries, as well as their increasing investment in the North in search of technological upgrades, suggest not only a significant acquisition of technological capabilities in the South but the restructuring of the global value chain as we traditionally know it. On the other hand, we see an important push towards increasing environmental regulations and the creation and strengthening of new (green) technologies and industries in the North, strongly pushing for robotization and digitalization of industries and labor.
The implications of these phenomena on the restructuring of the global value chain are still uncertain but nevertheless of high socio-economic relevance. Attention to the first phenomenon has been brought, among others, by UNCTAD (2012), Jullien and Pardo (2015) and Chaminade, Rabelloti et al. (2015), who highlight the significant participation of emergent economies, in the global industrial value chain, as well as the beginning of FDI, flows from South to North. The second trend is mostly documented in reports and working papers by the European Commission and the UK government who address the issues of this latter phenomenon, which is characterized by the search for new markets based on the development of technologies that comply with the increasing environmental rules and regulations imposed by the North.
By taking up the example of the automotive industry, this research presents an exploratory overview of these recent developments in the global context. Due to its high levels of globalization and technological requirements, the automotive industry is frequently used as a case study to illustrate learning and innovation paradigms between OEMs, their subsidiaries and domestic parts suppliers with all the different job and organizational changes required by the increasing digitalization requirements. The high levels of employment that the industry creates in both the South and the North reinforce the socio-economic significance of the industry as a case study.
This industry has been established in Mexico for more than eight decades. Throughout these decades, the industry has suffered important internal mutations in terms of its relevant supporting sectors, the technologies implemented, the organizational systems, and the occupational labor structures. The most relevant transformation, however, has been the arrival of different segments of the value chain, which gave way to a process of industrial upgrading; a process that has been accompanied by the development of technological and human capabilities.
Externally, backward linkages have also seen a transformation, although it is less significant due to their small scale. Local suppliers of low value-added services such as packaging have been accompanied by services with more technology such as machine tools, and the software industry. Subsequently, companies that provide solutions for automation systems have been increasingly present.
The increasing pressure for automation, digitalization, and robotization (supporting industry 4.0) has started to be implemented in firms, local suppliers, academic and governmental organizations at different speeds and intensities. This research discusses the progress and transformation at the national level of OEMs, global suppliers, as well as of knowledge-intensive local suppliers. From interviews with key actors and stakeholders, the research shows the main effects of digitalization and automation in this key manufacturing industry. The paper highlights the uncertainty prevailing the scope of this transformation such as the limits to endogenous development that are still present. In this new context of new disruptive technologies and trade protectionism, new paradoxes are presented.

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