The impact of technological developments on labour demand and its effect on location: Manufacturing industry

Abstract

Technological change has a remarkable impact on labour demand and the location of industries. This applies to most economic sectors, although labour and location strategies in the manufacturing sector are especially subject to the introduction of new technologies. This thesis focuses on the interplay between labour demand, plant location choices and the advent of the newest technologies in manufacturing. In so doing, the thesis qualitatively explores how the location choices of manufacturing establishments have moved to low-cost labour countries and whether this pattern can be inversed due to the most recent changes in technology and changing labour characteristics, i.e. reshoring. Hence, the aim of this research is to identify how technological developments change labour demand and how these factors affect location decisions. From a methodological standpoint, the qualitative approach of this thesis is based on several interviews with high-profile employees and managers from various global manufacturing companies. Results suggest that, although technology is gaining a more prominent role in manufacturing, the sector is still heavily dependent on manual labour. Location decisions are therefore mainly determined by labour endowments and reshoring seems not to be a straightforward outcome in the short term. Developments in technology are following up rapidly and thus this topic remains very interesting for future research and policy-making.