As Bangladesh embraces digital transformation, automation is affecting employment in key sectors.
Bangladesh’s pursuit of a digitally integrated economy has evolved from a policy ambition to a tangible transformation affecting industries, labour markets, and livelihoods. Branded as ‘Digital Bangladesh,’ a national-level program seeks to modernise our economy, draw in foreign investment, and improve the delivery of public services. As with many emerging economies, this change is accompanied by both enormous social and structural risks as well as previously unprecedented opportunities.
The core of the labour landscape is dominated by three major sectors: agriculture, manufacturing, and services. Manufacturing is the industrial growth engine, services are emerging as a frontier for digital entrepreneurship, while agriculture employs the largest percentage of the population, each industry is undergoing a distinct but interconnected evolution. As automation and digital technologies take root, they are increasing productivity, streamlining processes, and creating new forms of work. However, the stakes are high as digitalisation could either become a tool for inclusive growth or a driver of inequality.
Manufacturing: Where Machines Replace Hands
Manufacturing accounts for approximately 17% of total employment in Bangladesh, with the ready-made garment (RMG) industry serving as its central pillar. This industry has provided millions of jobs to low-skilled workers for decades, particularly women, and has been instrumental in empowering rural communities and lowering poverty. However, this labour-intensive model is starting to face challenges from the introduction of digital production systems and automated processes.
According to a study published in The Indian Journal of Labour Economics, automation in Bangladesh’s manufacturing sector is poised to have a transformative effect, but with setbacks. A 15% increase in productivity driven by automation could eliminate more than 600,000 jobs. If productivity increases by 30%, the number of displaced workers may reach 1.22 million. A 50% gain in productivity could push this number to as high as 1.8 million. These projections reflect trends already observed on manufacturing floors. A report published by ‘Fibre2Fashion’ revealed that the RMG workforce has declined by 30.58% in recent years, primarily due to the automation of repetitive roles such as helpers and manual operators. Previous human labour-intensive tasks are now more efficiently completed by machines, lowering costs for employers but displacing vulnerable labour force segments.
This trend presents a double-edged sword. On one hand, automation enhances efficiency, consistency, and compliance with international standards. On the other hand, it marginalises workers with limited education and no access to reskilling. As a result, the skills gap is growing, and the current educational system is ill-equipped to meet the increasing demand for specialised jobs.
Agriculture: Risk of Rural Marginalisation
Agriculture remains the bedrock of Bangladesh’s labour economy. As per the ‘Labour Force Survey 2022’, 45.33% of the workforce was employed in agriculture, which represents a significant rise from 40.6% during the 2016–2017 period. While government surveys from this time period are being contested due to concerns of data manipulation, the observation of the overall rise in the labour force in the agriculture sector is accepted. This rise may reflect both economic necessity in rural regions and ongoing urban-rural imbalances in employment opportunities.
Technological interventions in agriculture are playing an increasingly prominent role in enhancing productivity. Through the use of mobile advisory services and mechanised harvesting and ploughing, farmers are able to access equipment that lowers physical labour costs and increases yields. Digital platforms offer real-time weather forecasts, pest control alerts, and market price updates, helping farmers make more informed decisions.
The growth of mechanisation, however, also carries significant risks, especially for seasonal workers and smallholder farmers. Mechanised tools typically only benefit medium and large-scale farmers due to their high upfront costs and restricted access to credit. Many small farmers still work informally or for subsistence, finding it difficult to keep up with the rapid advancements in technology. The number of low-skilled farm jobs is already decreasing in places where machines are replacing manual labour.
There is a risk that agricultural automation will further marginalise vulnerable rural populations if specific policy responses are not implemented, such as providing access to affordable financing, agricultural training, and rural infrastructure development. This is particularly important in a nation where agriculture serves as the basis for social stability and food security.
ON ONE HAND, AUTOMATION ENHANCES EFFICIENCY, CONSISTENCY, AND COMPLIANCE WITH INTERNATIONAL STANDARDS. ON THE OTHER HAND, IT MARGINALISES WORKERS WITH LIMITED EDUCATION AND NO ACCESS TO RESKILLING.
Service: The Looming Job Crisis
The disruptive potential of automation is not confined to factories and farms. Bangladesh’s service sector, which includes retail, hospitality, healthcare, education, finance, and ICT services, is also experiencing early signs of structural transformation. Even though verified employment data from various service subsectors is still dispersed, predictions indicate that there will be significant labour displacement in the near future.
A landmark joint study by the International Labour Organisation (ILO) and the a2i program of the Bangladesh government provides a stark projection. According to the report, automation and artificial intelligence may result in the loss of up to 5.38 million jobs in the nation’s industrial and service sectors by 2041. This projection is based on current trajectories of technological adoption and assumes no significant policy intervention to mitigate the impact.
This forecast emphasises the critical need for social protection, workforce development, and systemic reskilling. In the absence of such policies, millions of workers, particularly those in low-wage, informal, and semi-formal jobs, may find themselves without the tools or opportunities to participate in the evolving economy.
THE GROWTH OF MECHANISATION, HOWEVER, ALSO CARRIES SIGNIFICANT RISKS, ESPECIALLY FOR SEASONAL WORKERS AND SMALLHOLDER FARMERS. MECHANISED TOOLS TYPICALLY ONLY BENEFIT MEDIUM AND LARGE-SCALE FARMERS DUE TO THEIR HIGH UPFRONT COSTS AND RESTRICTED ACCESS TO CREDIT.
A Just Transition
Unquestionably, automation and digitalisation can boost productivity and spur economic growth. At the same time, they also run the risk of escalating already-existing vulnerabilities and widening social inequality. However, Bangladesh is at a pivotal moment. While over the past 20 years we have made remarkable progress in economic development, our progress in generating meaningful and rewarding jobs centred around merit and skills has not kept pace. Therefore, we will need more than just policy announcements or infrastructure for the next phase of automation. Our digital strategy must be centred on a fair and just transition. This includes making vocational education more widely available, coordinating curricula with industry demands, providing financial assistance for retraining displaced workers, and creating strong safety nets for those affected. The biggest threat right now is that we have the capital to invest in massive technological adoption, but we don’t have the social safety net to absorb the mass unemployment that will be created.
Ultimately, the success of Digital Bangladesh will not be measured by how quickly industries adopt automation or how many devices enter the market, but rather by how equitably the country manages its transformation. The clock is ticking on Bangladesh’s ability to transform digital disruption into a driver of long-term resilience and shared prosperity.
