Can Bangladesh leapfrog into the future with 4IR?

American geographer Jared Diamond makes an interesting point in his bestseller "Guns, Germs, and Steel." He argues that the Eurasian civilisation is not so much a product of ingenuity, but  of opportunity and necessity. Civilisation is not created out of superior intelligence—it results from a chain of developments, each made possible by certain preconditions.

The same argument may apply to the history of industrial revolutions. The rising European powers' fortune, extracted from their colonies, fuelled the First Industrial Revolution. The Second and the Third followed in succession. Each grew on the wealth and knowledge accumulated from the preceding ones.

The world is now witnessing the Fourth Industrial Revolution (4IR). It's a convergence of emerging technology domains—including nanotechnology, biotechnology, new materials, and advanced digital production (ADP). Hardware, software, and connectivity merge to achieve ever more ambitious goals. Sensors detect specific actions or ambient conditions, allowing for independent software to improve itself with Machine Learning (ML) and Artificial Intelligence (AI) to determine subsequent actions. All of these are taking place at a breathtaking speed, giving little time for nations and individuals to prepare for the new 4IR paradigm. It's a global phenomenon, and the consequences are still uncertain.

The pessimistic view is that 4IR may lead to massive unemployment as technology will replace humans. The optimists hope that the developing countries would be able to utilise the opportunities offered by 4IR. They may leapfrog several intermediate stages of industrialisation and transition into higher economies. However, such leapfrogging requires some preconditions to be fulfilled. These include the right level and mix of skills, absorptive capacity, and industrial readiness.

One thing is clear, though. If a nation doesn't adapt to the 4IR paradigm, it will lose its competitive advantage in the Global Value Chain (GVC). It's true for any country, including the developed ones. Professor Michael Wooldridge of Oxford University believes that the UK is less internationally competitive on AI than it was two years ago. Why? Because it hasn't invested sufficiently in technology and failed to attract global talent.

Where does Bangladesh stand in this brutal war of survival?

Bangladesh's economy heavily depends on a single sector: ready-made garments (RMG). RMG alone earns over 80 percent of total annual exports, according to Bangladesh Garment Manufacturers and Exporters Association (BGMEA). The other source of earning is remittance from low-skilled migrant workers, who sent around USD 24.78 billion in remittances in 2020-21 fiscal year, according to Bangladesh Bank. Both are at the bottom rungs of the GVC, which will face increased disruptions by 4IR technologies such as AI, ADP, and Robotics. ADP may eliminate the advantages of large-scale offshoring of mass production and favour more "back shoring" of production tasks. The costs associated with fragmented GVCs, and the advantages offered by having both design and production at home base, may well promote this trend.

Should Bangladesh continue providing low-cost production and labour? Or can it train its abundant young population, making use of the opportunities 4IR is offering?

Each country must find its own path for advancement, just as Bangladesh has done to reach lower-middle-income status in 2015, and is on track to graduate to the developing country category by 2026. However, many developing countries are now stuck in the "middle-income trap" as they could not compete with low-income, low-wage economies in manufactured exports as well as with advanced economies in high-skill innovations. Such countries failed to make a timely transition from resource-driven growth with low-cost labour to productivity-driven growth. Bangladesh may also find itself in such a trap if it doesn't continuously move up the GVC ladder by leapfrogging via technological advancement.

An example of successful leapfrogging is the mass usage of mobile phones in Bangladesh. Can the same process apply to industrialisation, replacing labour-intensive production processes with smart factories? Ideally, it should, but requires investment in skilled workforce and technology, and government support. The development of a skilled workforce in relevant technologies also requires a close collaboration of the universities and vocational institutes with the industry.

Which sectors should Bangladesh focus on? It's often relatively easier to invest in short-cycle technologies, where innovation frequently disrupts the existing norms and processes. Both China and the Republic of Korea followed this path and moved to long-cycle technologies only at a later stage. Sectors in which previous knowledge remains in use for a longer period pose greater obstacles to the entry of new economies. That makes AI, ML, Natural Language Processing (NPL), and robotics prime candidates for investment.

Meanwhile, the government has an important role to play. Any attempt to leapfrog comes with inherent risks, and the government must support the industry to mitigate them. Such support may include tax rebates, subsidies, and state-led investments. The government may set up dedicated research centres to collaborate with relevant foreign institutes. An example of such collaborations is the recent opening of Canada's Global Institute for Food Security (GIFS) in Bangladesh. GIFS, a well-known research organisation of the University of Saskatchewan in Canada, will work with Bangladesh Agricultural Research Council (BARC) to promote advanced research.

Bangladesh enjoys several advantages, including a generous government policy to promote IT skills. Its government is formulating the National Blended Learning Policy 2021 to introduce a technology-oriented education system. Bangladesh must implement such policies earnestly. Failure to do so and adapt to the 4IR paradigm may cost dearly and may even erode much of the progress it has achieved so far.

Having said all that, Bangladesh must also continue its liberal arts education. A nation needs a combination of technical and cultural learnings that can come only from an all-round education.

Dr Sayeed Ahmed is a consulting engineer and the CEO at Bayside Analytix, a technology-focused strategy and management consulting organisation.