Impacts of Technological Innovation on Unemployment in Bangladesh

The emergence of technological progress in developing economies raises concerns about job displacement rather than job creation. Bangladesh's labour-intensive economy could be severely impacted by technological advancements. Given this critical issue, the study examines how technological innovation affects unemployment in Bangladesh by analysing time series data from 1991 to 2021. This research utilises the auto-regressive distributed lag (ARDL) model to reveal the empirical association of unemployment with technological innovation. The findings suggest that technological advancement has a mixed impact on unemployment. Process innovation, measured by the import of capital goods, has a positive effect on unemployment in the short term, whereas product innovation, measured by patent applications, increases unemployment in the long term. This reflects the labour-saving effect of technological progress. In addition, economic growth has short-term implications for employment creation, and inflation has a long-term impact on reducing unemployment in the economy. As technological innovation causes unemployment in Bangladesh's labour-intensive manufacturing industries, enhancing the skilled workforce and diversifying products is crucial for effectively utilising the abundant unskilled labour force in the economy.