Automation risk and local development in micro-regions: evidence from Hungary

Abstract

Abstract This paper investigates automation risk in an Eastern European country, Hungary, at the subnational level. Local economies are increasingly characterised by different development paths and divergence thus efficiently tackling the diverse economic and societal challenges of automation in the local economies requires the understanding of the relationship between automation risk and development perspectives at the local level. Using a national wage survey database, this paper adopts the framework developed by Frey and Osborne in Hungarian NUTS4 regions to understand the spatial distribution of automation risk and its connection to economic development. Results indicate that more productive regions tend to benefit from automation by simultaneously decreasing their exposure over time and creating more jobs. Less developed regions, however, seem to face many challenges. Some of them can reduce exposure, however, at the cost of job destruction. Lagging regions, on the other hand, tend to increase their automation risk over time due to the increasing number of low-quality jobs and/or decreasing number of high-value-added jobs. JEL code: J31