stage of production.<sup>2</sup> From raw material to the finished product, the whole process of goods production has experienced a fragmentation that today allows each sub‐process to be conducted where the skills and raw materials are available at competitive costs. As a result, today almost two‐thirds of the world’s manufactured imports are intermediate goods, meaning primary goods, parts, components and semi‐finished goods. A key challenge for Morocco and other countries is how to insert themselves into these production chains.

Regarding the third dimension (uncertainty regarding the long‐term growth prospects in the European Union), Morocco’s geographical position and history are such that fluctuations in its economy remain closely linked to activity fluctuations in Europe. This dependence is reflected in the geographical distribution of its imports and exports, and also remittances from Moroccan workers abroad. However, the region continues to face a number of structural problems (OECD, 2014), related in particular to high ratios of public debt, long‐ term unemployment in some countries, low fertility, aging populations, and high inequality. The recent decision by the United Kingdom to exit from the European Union has added a new layer of uncertainty to the Union’s prospects. Except for a few countries, growth prospects for the next two decades are weak. Without continued effort to diversify its trade partners, Morocco may find itself in a situation where its ability to export is constrained by a lack of foreign demand.

Regarding the fourth dimension (continued move towards automation and digitalization of activity), the advances in artificial intelligence and robots’ growing abilities and adaptability are dramatically changing society and affecting the future of employment. According to Frey and Osborne (2013) for instance, who examined 702 detailed occupations in the United States, about 47 percent of those – including taxi drivers, accountants, paralegals and loan officers – could be replaced by robots in the next decade or two. These fears may be somewhat exaggerated; while automation may indeed eliminate entire categories of work, it is likely to generate indirect effects that lead to more jobs being created in other sectors and higher demand, generating employment growth across the economy as a whole. In particular, new technologies may generate employment opportunities and better salaries in sectors that use robot‐produced products as inputs; And the demand for new robot‐produced products may increase the need for upstream products, and the new technology may boost overall demand (Autor and Salomons (2018), World Development Report (2019)).<sup>3</sup> Thus, although the net effect in the short and medium term may be to destroy jobs, the longer‐term effects on employment may well be positive. Nevertheless, the potential effect of automation and rapid technological advances on jobs means that for Morocco – as for many other countries – a growth model based solely on labor‐intensive manufacturing is highly risky and may not help to boost employment sufficiently to absorb new entrants in the labor market and keep unemployment low.

> 2 As noted in Cattaneo _et al._ (2013), global value chains driven by large buyers ( _buyer‐driven chains_ ) have become relatively complex in labor‐intensive consumer goods sectors (clothes, shoes, toys, furniture, fruits and vegetables, and cut flowers).

> 3 Autor and Salomons describe these indirect effects in more detail. They look at 28 industries in 19 OECD countries between 1970 and 2007 and find that while employment has fallen by 8.2 percent in industries affected by technological advances, the indirect effects have led to overall increases in employment of 17.8 percent.

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