The diffusion of advanced automation in developing countries: factors and adoption process

Abstract This paper reports the results of an empirical research into the diffusion of advanced automation in Brazil, India, Mexico, Thailand, Turkey and Venezuela. It shows that the extent of the use of advanced automation on a normalised basis is higher in Mexican firms, followed by Thai, Turkish and Venezuelan firms. Brazilian and Indian firms are among the least automated of the sample. Diffusion is higher among customised products manufacturers and small domestic firms. Macroeconomic factors underlying diffusion were a stable economic environment, low interest rates, availability of finance and a growing engineering goods demand. Firm factors for adoption comprised technical ones such as quality, flexibility and machine productivity, although industry considerations permeated the relative importance of each factor. Economic factors for adoption included labour and unit cost considerations. It also found that developing country firms, while searching for information on advanced automation through trade fairs and suppliers, do not make use of all available sources. The assessment of the potential of the new technologies is relatively simple and based on management intuition. There was also little preparation and not enough skilled workers prior to the installation of the new equipment. The paper concludes that the unstable environmental conditions and limited depth of knowledge in which advanced automation is used in developing countries calls for policy intervention at the aggregate and firm levels.