Jobs and the Future of Work

Sales of industrial robots are surging. So what does this mean for human workers?

Humanoid robot of British company RoboThespian "blushes" during the opening ceremony of the Hanover technology fair Cebit March 9, 2014, where Britain is this year's partner country.     REUTERS/Wolfgang Rattay     (GERMANY - Tags: BUSINESS SCIENCE TECHNOLOGY

The biggest buyers of robots are car makers, but they are also being used in other industries. Image: REUTERS/Wolfgang Rattay

Alex Gray
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Future of Work

Industrial robots are becoming smaller and cheaper, and manufacturers are buying them at a record pace, according to new sales figures. So what does this mean for human workers?

Sales of robots in North America have surged by almost a third (32%) in the last year, and that’s after a record year in 2016. It’s the robotics industry’s strongest ever first-quarter results, according to the Robotics Industries Association (RIA), which compiled the figures.

Almost 10,000 robots, worth over $500 million, were ordered from North American robotics companies during the first quarter of 2017.

In 2016, 7406 were ordered, worth around $402 million.

The RIA estimates that 250,000 are now in use in the United States, the third largest buyer of robots behind Japan and China.

Image: Recode

Market Research firm ABI Research predicts that global shipments of industrial robots could reach $45 billion in 2025, with an average year-on-year growth rate of 16%.

Image: Recode

The biggest buyers of robots are car makers, but they are also being used in other industries including metals, electronics, food and consumer goods.

Companies are buying robots in order to increase productivity and boost competitiveness. Meanwhile, robots have been getting smaller and cheaper, which is helping to drive sales.

 Robotic arms weld the chassis of a Ford Transit Van under assembly at the Ford Claycomo Assembly Plant in Claycomo, Missouri
Image: REUTERS/Dave Kaup
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What will happen to human workers?

Actually, it’s not that simple. Jobs will certainly be lost to automation – some 5 million by 2020 – but there will be opportunities too.

According to the National Bureau of Economic Research, one more industrial robot reduces local employment by roughly six workers, and reduces wages by roughly half of a percent.

But many of those lost jobs will be in the least productive manufacturing industries. Robots make manufacturing cheaper, which means that companies can keep their factories onshore, rather than looking for cheaper alternatives abroad.

According to a report last year from McKinsey & Co, very few jobs will be lost entirely, at least in the next decade or so. Rather, every job will be affected to a greater or lesser degree.

For instance, jobs where tasks are predictable, such as in an assembly line, are much more vulnerable to automation than unpredictable work, such as forestry or construction. Jobs in management will be the least affected.

Image: McKinsey & Co

Workers who lose their jobs will need to be 'upskilled' to prepare them for new roles that will be created by automation.

And as robots take over the most repetitive and arduous tasks, humans will be in less physically demanding roles and some will work alongside robot “colleagues”.

What do the experts think?

High profile CEOs have thought about solutions to the possible job losses. Bill Gates has called for a tax on robots, which would force companies to pay when they replace a worker with a robot.

Elon Musk believes that governments will eventually have to give people a universal income. General Electric CEO Jeff Immelt says both the private and public sectors should focus on training workers in new skills.

Others are more optimistic. Martin Feldstein, Professor of Economics at Harvard University, says that ultimately, the robotic revolution will benefit everyone.

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Related topics:
Jobs and the Future of WorkFourth Industrial RevolutionEmerging Technologies
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