Fourth Industrial Revolution

Here's how automation and job creation can go hand in hand 

An employee at the Flex factory in Tcew, Poland. To realize the potential benefits of automation, public and private sectors must collaborate

An employee at the Flex factory in Tcew, Poland. To realize the potential benefits of automation, public and private sectors must collaborate Image: Flex

Revathi Advaithi
Chief Executive Officer, Flex
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Fourth Industrial Revolution

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  • The real impact of automation depends on how we manage the transition.
  • Our responsibility is not to protect the jobs that machines can do better, but to prepare the labor force for the kind of work that is likely to be required.
  • We must invest in people by providing training they need to succeed in this new landscape.

We are often told that millions of jobs will be lost to automation in the coming years, but the real impact depends on how we manage the transition. It has the potential to create more economic opportunities, promote a regionalized manufacturing model, and provide rewarding career pathways for a more diverse workforce.

To fully realize these potential benefits, public and private sectors must collaborate to overhaul the labor market, empowering workers to succeed in a digital, knowledge-based economy. In the manufacturing industry and beyond, our responsibility is not to protect the jobs that machines can do better, but to prepare the labor force for the kind of work that is likely to be required.

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Creating economic opportunities through automation

Robotics, artificial intelligence (AI), and other Fourth Industrial Revolution technologies have been available to industry for decades, but the business case for them has only gained traction more recently. This is due to the declining cost of robotics and the rise of big data, greater computing power, and machine learning.

Across industries, the mass adoption of automation will lead to production becoming more agile, cost-effective, and higher yield. The design phase, too, could benefit: for example, digital twin technology provides a virtual representation of an object or process and can help to accelerate innovation. These effects, along with increased consumer demand for goods, could act as a catalyst for economic growth. And it will require a technically skilled labor force to support it.

Encouraging regionalized manufacturing

Smart manufacturing at scale can do more than promote economic growth. It can also encourage businesses to bring production closer to the end market. This is especially true for specialized products like medical devices, which often require knowledge-intensive manufacturing practices.

Consider the example of a small-scale project to automate integrated circuit testing. With an initial outlay of $50,000, the business could replace a full-time worker making $30 per hour or about $62,000 annually in a mature economy. The payback period is less than 12 months, compared to nearly twice as long for a similar worker making half as much in a developing economy. This significantly reduces the incentive for businesses to outsource manufacturing overseas. It could lead to the creation of more regionalised manufacturing hubs with advanced, highly specialized capabilities.

By 2030, a study projects that the midpoint automation scenario will result in additional labor demand of 1.5 million net new jobs, rather than a workforce reduction.
By 2030, a study projects that the midpoint automation scenario will result in additional labor demand of 1.5 million net new jobs, rather than a workforce reduction. Image: McKinsey and Company

New career pathways

A study by MIT and Boston University found that the negative impact of automation on the job market can be offset by new tasks as “all technologies create productivity effects that contribute to labor demand.” This is corroborated by a World Economic Forum study that predicts by 2025, digital technologies will create at least 12 million more jobs than they eliminate, as people with the right skills will be needed to program, maintain and repair them.

These emerging, specialized roles also provide workers with safer and more fulfilling career pathways. At Flex, our adoption of automation and robotics has not resulted in any mass workforce reductions among our factory floor workers. Instead, these workers have been redeployed or transferred to serve other production needs or upskilled to perform specialized roles. It is not uncommon for us to convert assembly operators and testers to line-compliance auditors or robotics technicians.

By filling the jobs created by automation, employers can level the playing field for people with disabilities and other disadvantages. For example, the use of robotics can eliminate the “ability to lift” requirement, making a job more accessible.

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How is the World Economic Forum ensuring the responsible use of technology?

Our challenge and responsibility

As we adopt more advanced technologies and techniques, businesses and governments must work together to transform the workforce and promote job creation. Digital transformations in the manufacturing industry and beyond present incredible opportunities for workers to move from slow, repetitive tasks into more dynamic, rewarding roles.

We must now invest in people by providing training they need to succeed in this new landscape. As productivity increases, we can empower workers and create an increasingly dynamic, digital world in which people and machines work together.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

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Fourth Industrial RevolutionFuture of Work
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