Can robots improve export quality in developing countries?

First, technology always creates winners and losers. While automation poses risks to some workers and firms, for others – especially in developing countries – it presents opportunities to upgrade quality, reach new export markets, and create productive employment. Policy should allow such firms to grow, for example by lowering labor market rigidities, which may help to offset any negative effects of declining firms and sectors. Second, our findings warn that growing trade protectionism may slow cross-border technology diffusion. It may constrain the ability of firms in developing countries to upgrade production processes, move into higher value-added activities and produce the high-quality products demanded by consumers.