Dollars & Details:
Should we welcome robots or worry about them? What about their effect on jobs, particularly on the factory floor? Manufacturing, at roughly $13 trillion in value-added global production, as estimated by Plunkett Research for 2017, is vitally important, both to the global economy overall and to employment. In the U.S. alone, manufacturing will add up to about $2.34 trillion for 2017 (on a value-added basis), employing 12.4 million workers—down from 19 million in 1980.
Big money is being invested in robotics—in factories, where automation is becoming cheaper to buy while it becomes more effective at replacing humans. By the end of this year, there will be roughly 2 million industrial robots in operation around the globe. That number is escalating quickly, particularly in nations that lead in robotic development and implementation like South Korea, Japan and Germany. China has a stated its goal of becoming a world leader in robotics by 2025, with money to back it up.
The first industrial robot was probably a machine named Unimate #0001, utilized at a General Motors diecasting plant in Trenton, NJ beginning in 1959. The primary force behind the Unimate was an American named Joseph Engelberger (sometimes referred to as the “father of robotics”) of the Consolidated Controls Corp. of Bethel, CT. By the late 1960s, automobile manufacturers were racing to install robotic units such as automated welders in their plants worldwide. As the decades went by, Japanese and German firms grew to be world leaders in factory automation equipment and robotics. This trend was directly tied to the growing dominance of Japanese and German automobiles, and the decline of the American auto industry.
Trends and Theories:
New technologies are rapidly enhancing the potential of robots. Artificial intelligence/machine learning means that robots can improve at their tasks through repetition. Collaborative robots (“cobots”) can interact closely with humans in a safe manner, while boosting efficiency on the factory floor, by utilizing advanced sensors and vision. In fact, machine-to-machine communications (AKA the internet of things) and machine vision are improving very quickly, further boosting robotics. Meanwhile, the cost of purchasing an advanced factory robotic arm has decreased steadily, and the technology-staff burden of programming such a machine is easing. This means that even mid-size firms will be investing in robotics.
So-called “service” robots will soon be growing in use in hospital wards, nursing homes, hotels and restaurants, and they are already in wide use in warehouses. They will work 24/7 if required, without demanding pay increases or employee benefits. In the U.S. city- and state-level increases in minimum wages are likely to boost this trend.
Pros and Cons: A new study by economists Daron Acemoglu of MIT and Pascaul Restrepo of Boston University studied U.S. employment and robotic trends for the years 1993 through 2007. They found “large and robust negative effects of robots on employment and wages,” at least in terms of local employment markets where robots were implemented. On the other hand, robots in use in places like automobile plants may reduce final prices for consumers, stretching the purchasing power of households while enabling U.S. companies to better compete with foreign plants where wages may be lower. While the robotics industry may create new jobs off the factory floor, they may not be enough to offset the rise of robots. At the same time, U.S. robotics firms are often lagging behind Japanese and German companies in their offerings of high-level factory automation equipment.
Ranks and Results:
In early 2017, Microsoft co-Founder Bill Gates famously suggested that we might tax robots’ owners, “some type of robot tax—at the same level” that we tax workers. In other words, taxes on robots might offset lost federal or state employment taxes.
Several commentators, including investment banker-turned-writer Andy Kessler, suggested this would be like taxing Microsoft Excel spreadsheet software because it killed the employment of people who previously did manual arithmetic calculations.
Hot-off-the-Press:
All the information you need about the global manufacturing and robotics industry can be found at Plunkett Research, including our Manufacturing and Robotics Research Center at Plunkett Research Online (for subscribers), and our just-published, completely-updated Plunkett’s Manufacturing & Robotics Industry Almanac, 2017 edition.
