Automation without Exclusion: Bangladesh’s Next Industrial Challenge

Bangladesh’s economic growth, since its early decades, has been shaped largely by labour-intensive production, particularly in ready-made garments (RMG), manufacturing (non-RMG), construction, agriculture and a vast informal economy. This model has generated employment, sustained export earnings and provided a measure of resilience as the country has navigated repeated global shocks. The RMG sector alone employs roughly four million workers, accounts for more than 80 per cent of national export earnings, and contributes around 11-12 per cent of GDP, with even greater indirect contributions through its linkages with trade and services. It remains both the backbone of Bangladesh’s industrial success and a source of structural vulnerability to external market fluctuations.
Beyond RMG, manufacturing activity – much of it driven by small and medium enterprises – continues to expand, though productivity and skill levels remain uneven. At the same time, Bangladesh’s labour market still reflects a classic development transition, with a large share of workers concentrated in low-productivity activities. Agriculture, for instance, employs around two-fifths of the workforce while contributing only about 11-14 per cent of GDP. This persistent mismatch between where people work and where value is created points to a deeper structural constraint: Bangladesh has been more successful in generating employment than in raising productivity across sectors.
Against this backdrop, the global industrial landscape is changing rapidly. Automation, artificial intelligence (AI), and smart manufacturing are reshaping how goods are produced and services are delivered worldwide. As these technologies become integral to global value chains, Bangladesh now faces a critical question: how can its industries adopt productivity-enhancing technologies without undermining employment, social stability, and inclusive growth?
AI refers to computer systems designed to perform tasks that typically require human intelligence, such as recognising patterns, understanding language, making decisions, and solving complex problems. When combined with sensors, data analytics, and connected machines, AI enables what is often described as “smart manufacturing”, a production model that is more intelligent, flexible and data-driven. In traditional factories, machines simply produce; in automated factories, machines follow predefined processes; in smart factories, machines communicate, learn from data, and help optimise operations in real time. This represents a shift from machine-centred production towards data-centred and adaptive production systems.

There is little doubt that smart manufacturing reduces repetitive work and improves efficiency. Yet it also exposes a structural vulnerability in Bangladesh’s labour market. A significant share of the workforce, roughly 20-25 per cent, has little or no formal education, while those with only primary and secondary schooling together constitute a large majority. These workers are predominantly engaged in routine and rule-based tasks, the very activities most susceptible to automation. By contrast, only a relatively small proportion (around 10-15 per cent) with higher education are employed in knowledge-intensive or high-skill sectors such as engineering, advanced manufacturing, finance and IT. Without deliberate intervention, technological upgrading could therefore displace segments of the workforce faster than new opportunities are created.
However, this transition has another side that is often overlooked. Automation does not simply eliminate jobs; it reshapes them. With targeted training, many routine roles can evolve into tasks involving machine supervision, quality control, maintenance, logistics coordination and data-assisted decision-making. Even workers with limited formal education can acquire functional digital and AI literacy through short, industry-linked training programmes. For those who cannot transition into technology-mediated roles, new employment pathways must also be developed in sectors where human presence, dexterity and interpersonal skills remain essential.
This presents a sobering reality for Bangladesh’s current education model, which remains heavily oriented toward memorisation and content coverage. If graduates are to remain relevant in a rapidly evolving labour market, the system must move decisively towards developing problem formulation and problem-solving abilities, collaboration, critical thinking, and lifelong learning skills. In effect, educational reform is no longer a pedagogical preference; it is becoming an economic necessity linked directly to productivity, employability and national competitiveness.
Bangladesh now stands at a pivotal industrial junction. AI and automation are gradually entering factories, farms and service sectors, but technology alone will not determine the country’s trajectory. The real transformation will depend on whether technological adoption is matched by coherent policy direction, large-scale workforce reskilling and a broader cultural shift towards innovation, adaptability, and productivity. The central challenge is not whether smart manufacturing will arrive, it already has, but whether Bangladesh can ensure that its people advance alongside its machines rather than being left behind by them.
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The writer is Distinguished Professor, Eastern University, and Former Vice Chancellor, East West University