Question

in 2/3 paragraph please explain automation reduces the importance of labor cost as a basis for competitive advantage, so can we assume now that the countries with more capital and technology have the competitive advantage?

Answer 1

As a current scenario there is complete lockdown due to covid -19.work from home concept is arrived .Automation means using technology for advancement and enhancement of production.companies are throwing out people's from job.GDP is going down day by day hence automation hence reduces the importance of labour cost.

Yes we can say that in this situation countries having more capital and technology have the competitive advantage.Because by using technology there work is not shutting down.they are doing their job easily.But those countries which are having low capital and poor techonolgy are not doing any economic activity.there economic activity is goes down.

Hence those countries are having competitive advantage which are using more technology.Due to automation there cost is going down.Production is increasing because machinery can do work very fast.there is no fatige in machinery.no human error hence there quality as well as quantity of goods is increases.so these countries are having more competitive advantage.there GDP is also increasing .Now they are in gain position.