More jobs in companies that employ robots

Time magazine 1955On March 28, 1955, Time magazine reported on a new generation of machinery called computers. The cover featured a drawing of IBM’s Thomas Watson, Jr. in front of a cartoonish robot drawn by Boris Artzybasheff, over a headline that read, “Clink. Clank. Think.” The story marveled at a computer built by IBM, working inside a Monsanto office building. “To IBM, it was the Model 702 Electronic Data Processing Machine,” the story reported. “To awed visitors, it was simply ‘the giant brain.’”

Time equated the IBM computer with the advance of civilization. “The prospects for mankind are truly dazzling,” the article said. “Automation of industry will mean new reaches of leisure, new wealth, new dignity for the laboring man.”

The Time magazine article has echoes of Keynes prediction from his 1930 essay Economic Possibilities for our Grandchildren, that the working week would be drastically cut, to perhaps 15 hours a week, with people choosing to have far more leisure as their material needs were satisfied.  In his essay Keynes may have been looking towards 2030 when he wrote: “What can we reasonably expect the level of our economic life to be a hundred years hence?”

Even though his essay was written in the second year of the Great Depression Keynes highlighted the advances in technology that contributed to the impressive economic growth that the West attained since the industrial revolution:

From the sixteenth century, with a cumulative crescendo after the eighteenth, the great age of science and technical inventions began, which since the beginning of the nineteenth century has been in full flood – coal, steam, electricity, petrol, steel, rubber, cotton, the chemical industries, automatic machinery and the methods of mass production, wireless, printing, Newton, Darwin, and Einstein, and thousands of other things and men too famous and familiar to catalogue.

Keynes then gave a warning of  ‘a new disease in the years to come, namely, technological unemployment.’

This means unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.

Major current debate concerns whether new technologies are creating ‘technological unemployment’ whereby many workers are displaced by new technologies and find it difficult to become employed again.

Much of this debate points to robots as the main culprit of displacing people from the workplace. Professor Robert Gordon of Northwestern University, in a Financial Times article, invites us to: “think of every employee you’ve had contact with in the last two or three days, and think, is that person going to be replaced by a robot in the next 20 years?”

Thomas Watson Junior believed the introduction of machines into the workplace would not lead us (the average workers) into technological unemployment but provide more wealth and more leisure time and also free us up for more creative activities. From the1955 Time magazine article:

President Watson hopes to mechanize hundreds of processes which require the drab, repetitive “thought” of everyday business. Thus liberated from grinding routine, man can put his own brain to work on problems requiring a function beyond the capabilities of the machine: creative thought.

This creativity aspect is something author Tyler Cowen emphasizes in his book Average is Over, and venture capitalist Mark Andreesen screams: “Robots will not eat the jobs but will unleash our creativity.”

The fact — automation is driving technological unemployment, jobs are being obliterated. According to the International Labor Organization (ILO) there are 200 million unemployed people worldwide. Many of these, such as millions of professionals that worked in banks, insurance companies, travel agents, retail, and other service industries have been displaced as software automates their jobs.

Robots in, jobs go up 

But so far companies that implement robots (a mechanical hardware and software device that incorporates movement/action) are actually adding jobs. Our research shows 76 companies that implemented industrial or factory/warehouse robots actually increased the number of employees by 294,000 over the last 3 years. Amazon famed for the acquisition of Kiva Robotics has in fact added more than 89,000 new staff to its payroll over the last 3 years. The company now employs over 117,000 people, more than four times the 28,300 employees it reported on June 30th 2010. Tesla Motors, manufacturer of electric cars and with one of the most sophisticated robot manufacturing sites has added over 6,000 new jobs.

Hundreds of thousands of new jobs are being created in drone manufacturers, industrial robot makers and other sectors of the robotic arena. The EU recently announced the world’s largest investment in robotics and a target of an additional 240,000 new jobs in the region.

It is highly probable over a million new jobs will be created in the robotics sectors in the coming 5 years. Whilst significantly less than the ILO cited numbers to solve the world’s unemployment problems, nevertheless it is a step forward – when others are screaming that robots ‘ARE’ eating jobs – let’s be realistic, software IS eating jobs; robotics is currently creating jobs.

Whilst I am optimistic about the near future for job creation in the robot sector, in the long run it is also highly probable that robots will displace people from jobs. How this will play out in 2030 is anyone’s guess – it is not too far away so I would suggest asking the same question as Professor Robert Gordon above. I also know robot manufacturers are very aware of the likely societal impact robots can have on jobs. As Melvin Kranzberg said: “Technical developments frequently have environmental, social, and human consequences that go far beyond the immediate purposes of the technical devices and practices themselves.”

It’s better to be prepared than caught out. My advice to young people — now is a good time to join the robot sector.

Update – Business Insider has a nice summary and other pointers on this article – This Settles The ‘Robots Will Take Our Jobs’ Argument Once And For All

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10 thoughts on “More jobs in companies that employ robots

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  3. Amazon and Tesla are adding jobs because they have been growing rapidly, not because of (or in spite of) automation. When a company grows quickly, first you add humans to tackle the short-term problems and establish processes; then you apply robots to automate the processes and either shed the humans or, more hopefully, move them to repeat the process in the next growth area of your business. Data showing hiring and automation happening simultaneously doesn’t tell you anything unless you look under the covers.

    • Agreed Karl.. and that is exactly what we did – look under the covers. Other sectors are affected by Amazon’s growth and there has been displacement there… In the coming weeks I’ll add other companies and sectors that have installed robotics and grown their employee base. The key point is also the growth of the robotic sector (robot manufacturers) where up to 1 million jobs will be created – that is an attractive sector to join.

  4. Comments from the Business Insider link referenced in the article:

    19 3 itsme on Jul 2, 9:55 AM said:
    This “robots will not kill jobs but unleash creativity” is the ultimate BS…
    You’re confusing jobs concentration and jobs expansion.
    Yes big firm with robots can hire and have more workers, the truth is that they do it at the expense of smaller companies made noncompetitive by the use of robots, where all jobs are finally destroyed…
    There will be an arms race toward robotization, and people will lose to machines.
    When this happens, how will people earn their lives ???
    These problems should be resolved prior to the generalization of the robots use, or we’ll have a very dark future…
    Reply
    12 1 Jim S on Jul 2, 10:16 AM said:
    @itsme: “Yes big firm with robots can hire and have more workers, the truth is that they do it at the expense of smaller companies made noncompetitive by the use of robots, where all jobs are finally destroyed…”

    Exactly. Very poor research to look at Amazon and Tesla and say, oh it’s okay then.
    Reply
    8 6 REIGuy on Jul 2, 10:58 AM said:
    @itsme: I agree! Ban refrigerators! Bring back the milk man and ice man! #StayAmishMyFriends
    Reply
    5 0 robots help companies to grow on Jul 2, 11:03 AM said:
    @itsme: Useless research… totally ignores that robots help the growth of those companies, that’s why they need to hire more people, to cope with the growth.

    This growth will finance a new wave of deployment of robots to eliminate the next round of human labor.

    This process will go on in cycles – in the mean time, companies who fall behind automation are just going to die.

    The same will happen with “researchers”, who can not connect the dots. Some software will do it.
    Reply
    4 1 Outsider on Jul 2, 9:55 AM said:
    It really depends upon the industry. A good number of broadcast stations in the US are fully automated. Even more are overnight. One doesn’t transition from broadcast engineering to robotics that easily. And yes, the number of air talent, technical and news positions are far fewer. These are not unskilled jobs.
    Reply
    4 0 The only reason we have human labor today on Jul 2, 11:14 AM said:
    @Outsider: If a company can save a single dollar by automating a job and get the same result – they will always chose automation over human labor.

    There is no economic incentive to do any other way.

    The only reason we have human labor today is because a certain task can not be automated yet or the cost of automation is higher than the cost of labor. Period.

    People claiming that automation is not eliminating human labor should prove first that the claim above is incorrect.

    Then they should prove that as a tendency, automation is not able to complete more and more complete tasks and achieving to complete complex tasks by automation will always be more expensive than human labor.

    Good luck with any of it.
    Reply
    5 0 therealgreg on Jul 2, 10:32 AM said:
    Had the same exact reaction as others. This “study” was obviously contrived to market a perspective, not performed to learn something new. In this case someone wants us to think automation is good for everyone. Obviously they purposely conflate “job creation” in one company with “job creation” across a whole industry thereby masking the likelihood that the increased hiring by companies implementing automation is at the expense of other companies losing business to them. I wouldn’t be surprised if a more honest and comprehensive study showed something in the vein of 70%+ reductions in employed humans due to companies like Amazon.

    It’s time to come to grips with a brain-hurting reality. Automating crap people don’t really want to do is ultimately a great thing. It’s the utopian dream of a technological future. Doing so in a Capitalist economy turns that dream into a dystopian nightmare where 30% of us that are needed/lucky/skilled get to work at more interesting things, work 60 hours a week and reap great rewards and the 70% are rendered mostly valueless and get jack.

    Automation + capitalism = tragedy because capitalism assumes scarcity of labor and an unlimited horizon of things we need people to do. Automation is eliminating the need for labor faster than our brightest people are inventing new categories of goods and services for people to want (and that need labor to create).

    One solution is to look at the two benefits of capitalism.

    Benefit 1: Incent workers
    Benefit 2: Make producers of goods and services beholden to consumers

    1 is rapidly becoming obsolete. 2 remains essential or you end up with soviet style government enterprises telling you what you get to have. One possible answer given this is a tax on people who work or on businesses that allows for a national base minimum income (no means test) for everyone (in lieu of all government run social services).

    Going to be an interesting ride to the new normal.
    Reply
    3 0 D J on Jul 2, 10:33 AM said:
    It’s hard to compete with the ~99% up-time and accuracy a robot/computer has.
    Reply
    3 0 not hard on Jul 2, 11:17 AM said:
    @D J: It’s not hard… it’s impossible.
    Reply
    2 0 floridiot on Jul 2, 1:06 PM said:
    @D J: Employees are a bigger pain in the ass than clients.
    Reply
    1 0 Employees are a bigger pain in the ass than clients on Jul 2, 2:28 PM said:
    @floridiot: Sure.. clients pay you, for employees you pay. Robots are the sweet spot of joy.
    Reply
    4 0 Steven C on Jul 2, 10:54 AM said:
    Another author missing the bigger picture. He’s still defining “robots” as “big physical machines that do work.” This is a very limited definition that needs to be expanded to include software that is easily doing the knowledge work that was once the domain of human beings. When the idea that robots will take our jobs is discussed, it isn’t that people think that a physical 1950′s “Robbie the Robot” is going to be their accountant but that the software and AI is becoming so advanced that a human being will no longer be necessary to do that job. This software, in large part, is what will be taking the place of human employment and not just a physical machine.
    Reply
    4 0 therealgreg on Jul 2, 11:15 AM said:
    @Steven C: You mean “have been”. Telephone operators, Travel Agents, Secretaries, Draftsmen, Sales Clerks/Cashiers, Postal Workers, Book Keepers, Tax Accountants highly impacted or all but gone and certainly “going”. Stock brokers, lawyers, drivers of all kinds, reporters, marketing professionals, software developers probably next.
    Reply
    2 0 Steven C on Jul 2, 11:33 AM said:
    @therealgreg: Thanks for the correction. You’re right. This is a process that has been taking place for a long time now. The only difference is that it is now speeding up at an exponential rate due to the advances in technology once thought to be confined to science fiction. To see where it goes is going to be rather interesting.
    Reply
    1 0 Robotenomics on Jul 2, 11:39 AM said:
    @Steven C: Totally agree with you and that is the gist of the article – The fact — automation is driving technological unemployment, jobs are being obliterated, which I have shown with detailed analysis of various sectors in several posts. But so far companies that implement robots (a mechanical hardware and software device that incorporates movement/action) are actually adding jobs. I do agree this is a short term probability and the number of jobs may not exceed 1 million in robot manufacturers plus other jobs in companies that instal robotics – but as I say in the article and in other posts this is unlikely to last for beyond maybe a couple of decades.

    I think a clear distinction needs to be drawn between robots and software automation without mechanical movement — robots get bad press when in fact the jobs ‘pure robots’ are doing is helping the economy. Of course in the long run it is the shareholders of companies that own the robots that will benefit, but in the short term people would be well advised to seek employment in robotic companies.
    Reply
    0 0 Steven C on Jul 2, 12:20 PM said:
    @Robotenomics: Thanks for your reply. In my opinion, I think that you are being a bit optimistic when you advise people to see employment in robotic companies even if we are still talking about the physical machines. I’m reminded of Rethink Robotics Baxter who, once created, was put to work creating other Baxters. One of the common arguments that I hear when I talk about this topic is “Someone is going to have to build/fix the robots when they break down.” which I believe to be a little short-sighted.

    I also think we are in agreement that this surge in job creation when robots is a temporary thing. I’d honestly be surprised to see it last even a couple decades as the technology becomes cheaper, faster, and overall better. I’m also not a subscriber to the economic idea that new jobs will emerge to take the place of the jobs lost. I believe this time really is different.
    Reply
    0 0 robotenomics on Jul 2, 1:28 PM said:
    @Steven C: I’m in agreement with you on so many points – ha – I even wrote ‘I believe this time is different.’ There are no easy answers,one economic professor says be sure to own shares in the co’s that own the robots, Piketty says beware of those that own the robots, there is the basic income debate. I think we will see more not for profits employing people – like the Gates Foundation… The tech advances I see in the labs are trull astounding , but I do think it will take some time/decades – industrial robots are still quite low in real terms, even though they have advanced considerably and as you say prices are reducing.

    Automation worries me – I saw first hand 80,000 jobs go in the insurance sector due to internet based insurance take-up.

    Then on the other hand we have had Siri and the likes for several years and usage of those ‘vertical assistants’ is woefully low – people are not used to speaking into machines – so it will take a few more years before Google Now and other AI assistants show there full potential… this time is different.

    The work on robotics is truly advancing and in most of the companies they are ramping up staff, few drone manufacturers use robots to make drones (especially the smaller ones) sure it will come – but not for a while yet… it’s just not happening at the speed implied in the press when I visit the manufacturers.
    Reply
    0 0 Steven C on Jul 2, 2:01 PM said:
    @robotenomics: We are in agreement on many points. What scares me is that automation will be a necessity instead of an option in the coming future. If company A begins to automate their process, company B will be forced to do the same in order to compete if it’s in the same industry. Any company refusing to do this will be left behind and, eventually, out of business. This is just basic competitive strategy and there won’t be anything that the companies can do about it no matter how much they wish to keep their employees.

    Deep down inside I would like to think that people such as Marc Andreessen, Erik Brynijolfsson, and Andrew McAfee are correct in their assumption that there will be something for us left to do but I don’t see this happening in the long run. They already have software that can write news articles (Narrative Science being one) and compose music (though not well but that will change with time). Relying on the idea that human creativity will trump robots and software isn’t realistic.

    In the short term, there is still something for us to do. In the long term, however, we are really going to need to rethink our economic system in order to keep things going. Given that our system is based on short term thinking (the financial crisis is a good example), we’re going to be in a bit of trouble before we know it.
    Reply
    0 0 Robotenomics on Jul 2, 3:12 PM said:
    @Steven C: I spend my days thinking about ‘rethinking the economic system’ you are so right.. it is a major concern and certainly policy is short term thinking – I’m deeply worried about the overall impact. As for this creative thinking – to me that is certain people making lazy assumptions if not necessarily self-serving notions.
    Reply
    1 0 jjhikes on Jul 2, 12:38 PM said:
    In the past, automation was both expensive and narrow. A pin making machine cost much more than a worker, initially, but made it back in volume. The displaced pin makers were few, and either found new work, or disappeared into unemployment statistics (if there were such). A little later someone invents a sock making machine, and so on.

    This kind of piecemeal replacement was both slow and expensive. It gave people time to invent new desires and new occupations to provide them.

    Let’s imagine an alternate world though. What if instead of a pin machine, something else happened. Let’s say that in 1835 John Howe had invented a “mechanical man” that could, at moderate cost, undertake a great number of tasks.

    What would employment look like today? Would there even be personal trainers?
    Reply
    0 0 vafer2k on Jul 2, 1:24 PM said:
    Colin Lewis has it completely wrong.
    Robots will displace jobs that can be automated. The losses won’t be made up – at least not very quickly. That’s math.
    Efficiency will increase.
    Yes, Marc Andreessen, it will “unleash” our creativity but many will be left behind as they are not as smart as you. And BTW, the recent hubris you’ve obtained the few past years… you’ve lost your grounding.
    The elite will benefit. Nothing wrong w/ elite. I do not like elitist.
    I love robots. I love efficiency. But what we do w/ those left behind will define our humanity.
    Reply
    0 0 Robotenomics on Jul 2, 1:31 PM said:
    @vafer2k: That is exactly the point I (Colin Lewis) make in my original article – but what I see in the factories and in the robot manufacturers is not in line with the hype… jobs will eventually be displaced but the opposite is happening today – the robot industry is creating jobs.

    Software (which I do not categorize as robotics) is making vast numbers of jobs redundant today.
    Reply
    0 0 unleased creativity on Jul 2, 2:34 PM said:
    @vafer2k: It will be important to unleash creativity, because as of today we have no clue what kind of socio-economic system will have to replace the current “work-for-living” Capitalism.
    Reply
    0 0 jjhikes on Jul 2, 2:37 PM said:
    @Robotenomics: Say I have a human powered pin making company, which employs 1000. Amapin comes along, invests in robots, hires 100, and drives me out of business. No one should say “robots went in, jobs went up” because there were 100 hires at Amapin. You need to go sector wide to make the case.

    Now, in sectors with increasing robotics, are sector wide employment figures rising?
    y
    fredlled on Jul 2, 2:52 PM said:
    @vafer2k: How much “creativity” makes for a viable living, especially when it depends on the 25%-30% who are still employed?
    Reply
    Robotenomics on Jul 2, 3:08 PM said:
    @jjhikes: It is a very good point and one we carefully considered in assessing sector by sector and in the majority of cases yes – jobs have increased sector wide, some have not (Amazon is a prime example but so many other factors at play there too – e.g. electronic books). I’ll publish more of the data in the coming weeks to show the sectors assessed and job situations.

    Read more: http://www.businessinsider.com/will-robots-take-our-jobs-2014-7#ixzz36L9UZmQw

  5. Sorry if this is addressed in the link above- I’m reading from work and time is a premium- but wanted to ask where in amazon these jobs are being created? That is, are they specialised jobs that require retraining, or that essentially displace the lower skilled worker in favor of the higher skilled worker (and thereby devaluing that skill set)? Do we know what kinds of contracts these new jobs operate under?

    • Hi Arran – in the US 22,500 of the new jobs were in their fulfillment centers, approximately the same number internationally. Amazon report these jobs “have a 30 percent pay premium over traditional retail jobs.”

  6. Quick search brought up an article from last year on a fulfillment centre in Rugley in the UK: http://www.fastcodesign.com/1672939/think-your-office-is-soulless-check-out-this-amazon-fulfillment-center#2

    It paints a picture of these centres as vast inhuman warehouses, aseptic and sparse. The photography shows a very clinical environment devoid of anything much resembling human warmth or personality, although I’m sure there must be something in the way of small reclaimations in the manner of office workers who stick up drawing their kids have done (although, given these workers have no fixed work stations, maybe even that amount of individuality is expecting too much). Because these spaces aren’t open to the public they’ve got a lot of industrial features only barely decorated. The creativity that robotics are currently unleashing are clearly limited to specific parts of the workforce. Meanwhile, workers doing a highly routine job are also occupying a braindead routinised environment. These kind of highly simplified environments are terrible for worker’s mental health- a lack of cognitive stimulation being linked to depression.. but even without that, how boring must that job be?

    A job’s a job. And I’m sure people in areas that have been subject either to economic deprivation and/or a program of designed deprivation are “happy” these jobs are available, especially if they’re paying over the retail wage. I’m not sure what the going rate is in the US but I’m imagining its similar- if not worse- than the UK’s minimum wage, which pays at below the cost of living. The article also points out that many of these jobs- at least in its case-study- are zero hour contracts. Even if this isn’t the case across the board, its surely indicative of the general tendency for firms to seek to suppress wages as much as possible in order to maintain profit margins.

    Here’s the real kicker: “The workers at Rugeley are effectively human robots”. Or, at least, they are human accessories to machinery whose working day is totally administered by a kind of hyperfordist real-time time-in-motion monitoring system.

    So I guess for me the real question isn’t quantitative, we shouldn’t be focused on job losses or job creation, but on the nature of labour itself under a machinic economy. Rather than liberating human potential, machinic enslavement has stepped in to ensure that people remain tied to ever more precarious work.

    The quatitative debate is really a distraction from what a robotic & algorithimic economy could achieve.

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