Labour displacement

Transfer of capital and technology has an effect on labour similar to that produced by technological change. In the industrialized countries, this transfer displaces workers with low skills and educational attainments and accelerates the necessity of readapting, retraining and relocating displaced workers. In the developing countries, industrial operations that maintain the labour force at the particular level of skills needed for the production of a component, or for a certain industrial process, create a problem. While the immediate employment effect may be positive, the long-term effect may be negative, since the approach does not offer potential for the upgrading and diversification of skills necessary for job betterment.