It is not our task to predict the future, but to prepare ourselves for it.
Industrial robots were first introduced to manufacturing facilities in the 1960’s with an installation of the UNIMATE robot at General Motors in New Jersey during 1961. With the success of the Unimate robots in the New Jersey factory, in 1969 General Motors installed 26 Unimate robots to assemble the Chevrolet Vega automobile bodies in Lordstown, Ohio.
At the same time (1969), Japanese auto makers were making advances in manufacturing: cutting costs, reducing variation, and improving efficiency. One of the major factors contributingto this transformation was the incorporation of robots in the manufacturing process. Japan imported its first industrial robot in 1967, a Versatran from AMF. In 1971 the Japanese Industrial Robot Association (JIRA) was formed, providing encouragement from the government to incorporate robotics. This move helped to move the Japanese to the forefront in total number of robots used in the world. In 1972 Kawasaki installed a robot assembly line, composed of Unimation robots at their plant in Nissan, Japan. After purchasing the Unimate design from Unimation, Kawasaki improved the robot to create an arcwelding robot in 1974, used to fabricate their motorcycle frames. Also in 1974, Hitachi developed touch and forcesensing capabilities in their HiTHand robot, which enabled the robot to guide pins into holes at a rate of one second per pin.
Sales started to take off quite quickly in 1973 as more robotic manufacturers demonstrated the precision and reliability of automated machines.
Many have complained the installation of robots within auto manufacturers is compelled by what is often described as the profit motive and job reduction; however, it is more reasonable to consider that robots have helped auto manufacturers improve productivity, increase quality and not only remain in business, whilst employing several million people worldwide, but also continue to increase the number of people employed.
Data means little without qualification
As we have seen, the auto industry was one of the first early adopters of industrial robots, and has remained the leading user. According to the International Federation of Robotics the average robot density per 10,000 employees, within automotive manufacturers, is approaching 1,000 (or nearly 1,000 robots for every 10,000 people), against an average of 76 robots per 10,000 employees in other manufacturing sectors.
However, these figures may not show the whole picture. Take for example at the BMW owned MINI plant in Oxford United Kingdom, where there are approximately 4,000 people employed, using more than 1,000 robots, or 1 robot for every 4 people. Similarly the Nissan plant in Sunderland, in the north east of England, produces approximately 500,000 vehicles per year; employs 6,000 people and has 780 active robots. Indicating robotics are far more pervasive within factories than population of numbers per employee show.
At the end of 2012 the International Federation of Robotics (IFR) estimated there have been around 2.5 million industrial robots sold since the late 1960’s and that in the region of 1.235 million to 1.5 million of these industrial robots are still in service worldwide. The estimate of robots in service is based on the average service life of an industrial robot of 12 to 15 years.
Globally, the International Federation of Robotics (IFR) indicates approximately 225,000 robot units were sold in 2014, 27% more than in 2013 and by “far the highest level ever recorded for one year.” In 2013 the total ‘recorded’ sales was 178,132 industrial robot units.
On the other hand there are over 120 million people employed directly in manufacturing worldwide (12 million in the United States alone), indicating that robots in service worldwide are still approximately 1% to 1.5% of the global manufacturing ‘workforce.’
On the surface it would seem we are still a long way from ‘factories full of armies of highly intelligent robots.’ But don’t bet against it being long before the second wave of Baxter type robots completely changes this ‘dynamic.’
Cusp of an explosion in robotics?
Robotics is now spreading to a wide range of other sectors such as elder care, crop spraying and warehouse management. Some estimate that by 2025 robots will have entered every aspect of human life and will be commonplace; performing functions as diverse as nursing, complex surgery, policing and security, through to construction, retail and hotel service roles.
Some may claim that the current high level of research and investments in robotics, to do the work of humans, is investing money away from where the important problems are, however investments in robotics is leading to productivity growth and productivity growth ‘theoretically’ directly impacts GDP growth.
A National Academy of Sciences 1998 paper indicates (pages 35)
Historically, technological change and productivity growth have been associated with expanding rather than contracting total employment and rising earnings.
Technological change will make its maximum contribution to higher living standards, wages, and employment levels if appropriate public and private policies are adopted to support the adjustment to new technologies.
This begs the question – Could the jobs of the near future be in the robotics sector?
Remi ElOuazzane, Vice President of Texas Instruments believes it is certainly an industry with significant growth potential, as he said:
We have a firm belief that the robotics market is on the cusp of exploding.
Likewise Professor Alan Winfield in his essay contained in the e-book released by Nesta, Our Work Here is Done, believes robotics to be on the verge “of a kind of Cambrian Explosion.”
Using the same expression Gill Pratt, who recently stepped down as Program Manager of the Defense Advanced Research Projects Agency (DARPA) to take up another high profile role in the Robotics private sector, asks in a paper titled: Is a Cambrian Explosion Coming for Robotics? Published in the highly respected journal from the American Economic Association, the Journal of Economic Perspectives. Writes:
Robots are already making large strides in their abilities, <and> as the generalizable knowledge representation problem is addressed <lacking in current robotics>, the growth of robot capabilities will begin in earnest, and it will likely be explosive.
However Gill does caution:
The effects on economic output and human workers are certain to be profound.
 Source: Robotics and Automation Handbook 2005, edited by Thomas R. Kurfess
 See as an example – History of Industrial Robots, International Federation of Robotics 2012 (http://www.ifr.org/uploads/media/History_of_Industrial_Robots_online_brochure_by_IFR_2012.pdf)
 Industrial robots break worldwide sales records (http://www.worldrobotics.org/index.php?id=home&news_id=281)
 Nesta, Our Work Here is Done (http://www.nesta.org.uk/publications/our-work-here-done-visions-robot-economy)
 Winfield, Alan. Nesta e-book, Our Work Here is Done http://www.nesta.org.uk/publications/our-work-here-done-visions-robot-economy)
 Pratt, Gill A. Is a Cambrian Explosion coming for Robotics? (https://www.aeaweb.org/articles.php?doi=10.1257/jep.29.3.51)
Over the past two centuries, human ingenuity has produced groundbreaking innovations that have reshaped industries and improved the quality of life for people around the world. The Industrial Revolution, which is said to have reached its peak in 1840, heralded a time of ‘great optimism,’ of talks about ‘full employment,’ longer life-expectancy and technological advances. A few decades later the developed world entered a downward swing in industrial capitalism and a long period of social and economic depression lasting from 1873 to 1879, followed by a period of very low growth and deflation until 1896.
This period coincided with the emergence of the Age of Steel and Heavy Engineering, generally known as the Third Technological Transformation, or the second industrial revolution, which began around 1870 until the late 1920s and was far more complex than the Industrial Revolution. The main technological advances were the substitution of steel for iron as an engineering material, the start of the petroleum and electric-power industries, and the development of the internal-combustion engine. Steel, gasoline, and the internal-combustion engine made the automobile possible. Technological spin-offs from these advances resulted in the creation of a number of new industries such as the telephone networks and road networks which heralded a need for new skills and vast investments in infrastructure.
In the 1950s onwards more new industries arose such as air transportation, consumer electronics, computers, pharmaceuticals and plastics, and in the last twenty to fifty years the computer and Internet sectors have once again led to the creation of new industries and skill sets.
The world economy is six times larger than it was fifty years ago. New technologies have promoted economic growth, and have paved the way for more efficient production systems in a wide range of industries.
During each technological development or breakthrough, whole industries have been demolished and new ones created – resulting in long depressions and redundancies followed by the need for new job skills, and ultimately leading to an improved quality of life.
History may not be a great predictor of the future, but the technological transformations of the last 250 years or more give a good indication of the long waves of economic development that the world has passed through, and may provide us with a better understanding of where we are going in the future. Technology may be speeding up, but economic growth has always been uneven rather than continuous. Technological progress has always resulted in both job destruction and job creation.
Robots fastest growing industries?
Arguably one of the most important growth industries today, with a steady rise in jobs, is within robotics and associated technologies, such as Artificial Intelligence and Machine Learning. Indeed one report titled The Transformation of the Workplace Though Robotics, Artificial Intelligence (AI), and Automation by Littler Mendelson indicates: “Robotics is the fastest growing industry in the world, poised to become the largest in the next decade.” Whilst Forbes Political Editor and a Senior Economic Adviser, John Tamny has indicated: “Robots will be the biggest job creators in history.”
Theory, claims, and data
Economists and general observers have been discussing the effects of technological innovations on the job market for a long time. The repeated complaint is that technical progress hurts labor whilst at the same time it helps the owners of the capital profit more; through increased productivity with fewer jobs and therefore larger profits, these larger profits are however needed to invest in the machines. Mario Draghi chairman of the European Central Bank suggested the opposite may be true when it comes to investment in technology: “Even before the crisis, many companies were no longer productive partly because they had not invested in new technology.”
Which raises the question should robots be seen as a positive thing, rather than the “dystopian world” some fear?
 There are several notable studies which use formal modeling to conclude that technical progress reduces employment in the short run, but not the long run, see for example those by Gali (1999), Basu, Fernald, and Kimball (1998), and Francis and Ramey (2002). These studies indicate that job loss is transitory (and not without pain), but not permanent.
 Littler Mendelson (the world’s largest labor and employment law firm): The Transformation of the Workplace Though Robotics, Artificial Intelligence (AI), and Automation (http://www.jdsupra.com/legalnews/the-transformation-of-the-workplace-thro-67856/).
 Forbes, Why Robots will be the biggest job creator in world history (http://www.forbes.com/sites/johntamny/2015/03/01/why-robots-will-be-the-biggest-job-creators-in-history/?utm_campaign=yahootix&partner=yahootix)
 Interview with Mario Draghi, President of the ECB, conducted by Giovanni di Lorenzo on 17 December 2014, published on 15 January 2015 (https://www.ecb.europa.eu/press/inter/date/2015/html/sp150115.en.html)
See also Technology has created more jobs than it has destroyed, says 140 years of data (H/T) @_garrilla http://www.theguardian.com/business/2015/aug/17/technology-created-more-jobs-than-destroyed-140-years-data-census
Summary – Analysis conclusively shows over 1.25 million new jobs created during the last 6 years at companies making extensive use of robots. The detailed Robotenomics research report outlines full interviews and analysis of the key findings.
Ever since “the great recession” began in the latter part of 2008 it has been widely speculated that the installation of hundreds of thousands of factory robots has hindered job recovery; that robots are taking jobs and are in part responsible for high unemployment. These speculations further assert that more jobs will be lost as robots are able to take on an increasing number of tasks.
Our research of manufacturing corporations that are using industrial robots indicates that whilst companies are adding more and more robots to their factory floors, they are also adding more jobs to their payroll.
Based on legal corporate regulatory filings, such as annual financial reports, we find that 62 of the world’s largest manufacturing corporations who are heavy users of industrial robots, in fact users of hundreds of thousands of industrial robots, are adding more jobs and employing more people – over 1 million more – than they did before the onset of the great recession. In-depth interviews with executives and managers of these companies provide further insight into the manufacturing process and the relationship between human and robot workers, as well as the new career opportunities and skills needed in a future robot economy.
Key findings: Jobs: Between the end of 2009 and the end of 2014, sixty-two corporations with collectively the largest (and growing) installed base of robots added an additional 1.25 million new jobs to their payroll – an overall increase of more than 20% people employed.
During our research we analyzed legal corporate filings of companies using industrial robots for a period of six years (end of 2009 to end of 2014) to ascertain number of employees and where possible robots used. This analysis included quarterly (if available), half year, and annual corporate filings of 109 corporations that have a large installed base (and growing number) of industrial robots, the period covered was the start of 2009 to the end of 2014. We also analyzed relevant legal press releases from those entities.
We also we spoke to and conducted email correspondence with more than 90 senior executives, managers and engineers within companies that have a large installed base of robots, and reviewed reports from industry associations together with filings, press releases and corporate brochures and case studies from stock-listed robotic manufacturers. In total this analysis included approximately 1,500 legal compliance documents. We then compiled a database of employee headcount for each year analyzed and compared the annual growth or decline of number of employees per company.
During the last few years the popular press has delivered a flurry of articles stating that these advances in robotics is resulting in robots taking jobs. Much of the news is on the back of high profile acquisitions and investments, such as Amazon’s acquisition of Kiva robotics for $775 million, Google’s acquisition of 8 robot companies for approximately $100 million combined, followed by the acquisition of Artificial Intelligence developer DeepMind for approximately $500 million, Foxconn’s statement that it would replace 1 million people with robots (a case of fuzzy logic), IBM’s $1 billion investment in Watson, and announcements by Facebook, Yahoo, Baidu and Microsoft of additional investments in Artificial Intelligent assistants and related developments.
Further investments by major corporations in autonomous (self-driving) cars and trucks, drones taking photographs at sports events and spraying crops. New movie releases (Her, Transcendence, Chappie, ExMachina and others in the science fiction genre) have also stoked the fire.
Robots sell papers and get eyeballs, of course whilst there is still also a novelty factor, and indeed fear of the unknown surrounding robots; nevertheless there are tremendous advances in robotic capabilities which could, it is fair to say, lead to robots doing many more types of jobs, in the future.
Collectively these developments are adding to the chorus of media claims and proclamations from leading economists and researchers, that robots are stealing jobs.
For example a December 2013 study from the James Martin 21st Century School at Oxford University estimated that approximately 47 per cent of U.S. employment was at high risk of being replaced by computerization over the next couple of decades (The future of employment: How susceptible are jobs to computerization? Frey and Osborne 2013), note the heavy media attention this paper received indicates jobs being replaced by robots in place of the authors’ position of “computerization.”
Book’s such as The Second Machine Age by MIT’s Erik Brynjolfsson and Andrew McAfee, Martin Fords The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future and Our Final Invention by documentary filmmaker, James Barrat, have also received a great deal of media attention much of it focused on the negative aspect of technology (and especially robots) displacing jobs, despite one of the central messages of The Second Machine Age offering hope in a machine economy.
The book authors write:
The transformations brought about by digital technology will be profoundly beneficial ones. We’re heading into an era that won’t just be different; it will be better.
The high level of mixed reports and media, of claims that robots are taking jobs, led famed Massachusetts Institute of Technology (MIT) Labor Markets economist
David H. Autor to recently state:
Journalists and expert commentators overstate the extent of machine substitution for human labor and ignore the strong complementarities. The challenges to substituting machines for workers in tasks requiring adaptability, common sense, and creativity remain immense.
Disagreements about the impact of robotics on employment is common, even among so called “experts.” (Pew Research 2014).
We need numbers, not adjectives.
Of course this is not the first time we have heard the claim that automation and machines are eradicating jobs. The prediction that technological developments will lead to massive unemployment has been made since the turn of the 19th century (E.J. Hobsbawm 1952), and at least so far, the prediction has proven false.
The specific claim that “mechanical robots” will lead to mass unemployment has been ongoing since the early robots were installed in auto manufacturers at least fifty years ago leading to books such as Where have all the robots gone? Worker dissatisfaction in the 70s by Harold L. Sheppard and Neal Q. Herrick and comments such as the opening paragraph of a 1982 paper: Industrial robot technology and productivity improvement by James S. Albus which reads:
Many people today believe that the robot revolution is well under way, that factories are full of armies of highly intelligent robots, and that human workers are being displaced in droves. The facts are quite different.
Factories “full of armies of highly intelligent robots” were not case then. Nor are “human workers being Displaced (by robots) in droves.”’
US Manufacturing alone added 646,000 net new jobs over four years to end of 2013, according to White House figures.
As of June 2014 an additional 302,000 Manufacturing jobs in the US were unfulfilled according to the US Bureau of Labor Statistics.
Audi’s Annual Report of 2014 states:
The point of (Industrial robots) is not a factory devoid of people, but rather to provide the employees optimal support as they go about their work. In the future, robots will do the jobs that people don’t want to do because they are strenuous, monotonous or unergonomic, such as installation work in the vehicle interior or overhead work. Employees would then perform more challenging tasks. Machine monitoring, programming, and plant repair and maintenance are already becoming increasingly significant fields of activity at factories today.
Jobs created by companies that use robots
Whilst robots have found their way onto the factory floor, the numbers of these robots considerably outnumber sales of service robots, such as military or defense robots (e.g. unmanned aerial vehicles (drones), bomb detection robots), agricultural milking robots, automated guided vehicles used in logistics and warehouses and medical robots for assisted surgery.
Due to the relatively small number of service robots in everyday use it is hard to quantify any significant impact, positive or negative on the workplace. However, it is worth noting that Amazon, one of the largest users of service robots after their acquisition of Kiva systems in 2012, have increased their global headcount by 89,000 in the 3 years to the end of 2013. At the end of 2013 the company employed over 117,000 people, more than four times the 28,300 employees it reported on June 30th 2010. Many of these additional jobs have been in Amazon’s fulfilment centers, the very area where they have employed Kiva’s robotic systems. Amazon Vice President Mike Roth spoke of his belief that robots complement human labor:
The robots do not give jobs away. They make them more efficient… I see no way robotics are ever going to replace humans.
With respect to robots in the manufacturing sector (industrial robots), according to a recent PwC survey of US manufacturers, over one third of manufacturers said that the biggest impact robots will have on the manufacturing workforce in the next three years is that they will lead to:
New job opportunities to engineer advanced robots and robotic operating systems.
In the same PwC survey about one in four felt the biggest impact would be “more demand for talent to manage the robotic workplace.”
Our research indicates, despite the headlines, companies that have installed industrial robots are actually increasingly employing more people whilst at the same time adding more robots. Additionally econometric evidence suggests an important role for robots AND people in accounting for productivity growth.
More importantly our research shows that it is NOT only young disruptive companies that are creating jobs and utilizing advanced robotics, as is the case with Amazon, Inc. and Tesla Motors, but also older more established companies like Chrysler, Daimler, Philips Electronics and more.
We have identified: over 1.25 million new jobs have been added by companies that make extensive use of industrial robots.
It is noteworthy to also consider jobs created within the local communities of those manufacturers. In his book The New Geography of Jobs published in 2012, Enrico Moretti, an economist at the University of California, Berkeley, estimated the employment multiplier of different sorts of work. A new manufacturing job, he suggested, typically creates 1.6 new jobs in the local service economy. In innovative industries, one new position might yield four to five new service sector jobs within a metropolitan area.
In addition the robotics manufacturing sector and associated industries are also adding new jobs at companies such as ABB Robotics, Kuka, Fanuc, Hitachi, Bosch and others. Similarly jobs are being created at both small and large Drone manufacturers as new investments and demand continues to stir growth.
The auto manufacturers
The biggest surprise, given the volumes of articles claiming robots have taken jobs in the motor sector, is seven auto manufacturers who have increased their number of employees by more than 132,000 people between 2009 and the end of 2014 whilst also adding tens of thousands of new robots to their factory floors.
Luxury car manufacturers Audi, BMW Group and Daimler (manufactures of Mercedes Benz) have seen significant increases in the total number of employees between 2009 and the end of 2014, despite the global recession and claims installations of robots were causing companies to cut back on the number of people employed.
The three luxury auto manufacturers were already heavy users of industrial robots and in the last four years have added at least an additional 10,800 industrial robots to their production lines. According to Richard Morris, vice president of assembly at the BMW Spartanburg plant:
Ideas come from people, and a robot is never going to replace that.
The person who does the robot programming and services the robots will make a substantial contribution to future car productivity. Even with the new slower, more flexible robots being introduced into production, BMW’s customized and agile production entails serious challenges for technology requiring the skills and dexterity of people. For example, the BMW 7 Series, alone, has ten to the power of seventeen possible variations.
As robots handle 95% of painting and welding within BMW factories, a production employee at one of BMW’s plants is likely to look far more like a scientist. BMW have developed augmented reality glasses for assemblers and mechanics that display online manuals and instructions explaining exactly how parts should fit together, which has led to higher levels of inspection and quality control. In addition to augmented reality glasses, Christian Steiger who is responsible for mechatronics (or Industrial Robots) in the BMW Group Munich plant said:
BMW factory technicians use the most up-to-date systems and processes like ultrasound, camera and laser technology for the purposes of quality assurance such as measuring the thickness of a spot-weld applied by one of the thousands of robots, but classic testing procedures using hammer and chisel are still used too.
The Porsche Macan factory in Leipzig, Germany is one of the most advanced auto manufacturing facilities in the world and heavily automated with industrial robots. However Porsche, who have seen a huge jump in the number of people employed over the last 6 years, emphasizes the importance of human workers in such an automated facility:
A total of 387 robots turn the body shop into an impressive sight. However, despite the high degree of automation, human workers are essential here, in particular for quality controls, systems operation and several manual tasks. In the body shop we rely on harmonic interaction between expert human labor and stateoftheart technology.
Another car manufacturer Toyota has a mission of “creating a company that would never have to dismiss employees.” Toyota not only uses thousands of robots at its production plants, but also makes its own robots.
Toyota wants to provide a pleasant workplace for its workers and one that helps them feel good about their work. To create a pleasant environment for the workers, we use machines and robots for work that is dirty or requires a lot of strength. Also, since machines and robots can accurately repeat the tasks they are given on time, they are ideal for repetitive, precise tasks. This is why we use many machines and robots in the stamping, welding, and painting processes.
Tasks that require complex judgments, such as assembly and inspections, and those that require intuition and special expertise, are performed mainly by humans. We also need workers to operate the machines and robots. In this way, human workers and machines (robots) each do what they do best, working together to make highquality cars.
Despite being a significant producer and user of robots, Toyota is not of the opinion that it will ever have a totally automated factory, staffed only by robots:
“We don’t think machines and robots will ever be able to make cars by themselves. While we use many machines and robots in our factories, there are many tasks that only human workers can perform. It is only through the cooperation of workers and machines that we are able to make cars of such high quality. Toyota doesn’t believe it would be possible to have a fully automated car factory that does not have any human workers.”
The number of jobs directly and indirectly created by Toyota in the US alone is considerable. When factoring in the people selling and servicing new Toyota vehicles the total US jobs supported annually by Toyota in 2010 was 365,000 with annual compensation of approximately US$ 21.4 billion.
Honda is another car manufacturer that added jobs to its payroll between 2009 and 2014. It is also at the forefront of producing robots that are scheduled to enter every day use in the form of exoskeleton’s to aid people with disabilities to walk again and robots for rescue work after disasters. Perhaps the best known member of Honda’s ‘robot family’ is ASIMO, the ‘humanoid’ robot, which the company imagines will “be useful for people and to help enrich people’s daily lives.”
Honda has invested heavily in new facilities and automation. At their stateofthe art Yorii plant, which they opened in 2013, just north of Tokyo which uses production lines characterized by the coexistence of work robots with human workers, Honda has introduced a variety of innovative technologies in the pursuit of automation and efficient manufacturing. Highspeed welding robots make the car body frames, robots install instrument panels, seats and tires and mount suspension systems. Despite the heavy investments in automation and robotics Honda has also added thousands of new jobs to its headcount.
The detailed Robotenomics research report outlines full interviews and analysis of the key findings and the analysis conclusively shows over 1.25 million new jobs created, during the last 6 years, at companies making extensive use of robots. For now this may help to put to rest some of the fear-mongering of the present day.
In fact Robotics may just be a terrific job to pursue.
In his book The Coming Jobs War, Gallup CEO Jim Clifton said that one of the most important discoveries the international polling firm has ever made is that what people want – ahead of love, money, food, shelter, safety, peace, and even freedom – is to have a good job. “This changes everything for world leaders,” he wrote. “Everything they do – from waging war to building societies – will need to be in the context of the need for a good job.”
Where will the new good jobs be? Who will get them? What should you be doing today to ensure that you have jobs in the future?
The Nobel Prize commission awarded the 1987 Nobel Prize in Economics to Professor Robert Solow in part for his work, which indicates that technological development will be the motor for economic growth in the long run. In Solow’s model, if continuous technological progress can be assumed, growth in real incomes will be exclusively determined by technological progress.
Business is fraught with production and process inefficiency, our era is one of turbulent technological and economic change, it seems clear that the productive potential of robotics have only begun to be realized and the robotics sector is one of employment growth.
A United States Department of Labor study found that 65% of children currently in primary school will grow up to work in jobs that do not exist today. Robotics is a growing field, and the proliferation of robots into our everyday lives is likely to be one of the key transformations in the workplace of the 21st century.
Clyde Williams wrote as far back as 1953 that:
The machine is, in fact, a moronic robot able to perform routine operations with high speed, excellent precision, and unwavering patience.
Demis Hassabis of Google’s DeepMind indicates that Computers are nowhere near being able to ape human behavior or take over human thinking.
In 1962 Vannevar Bush wrote of Automations Awkward Age about the same time robots were entering the factory. He said then “on an over-all basis, automation creates jobs.” It is exactly the same today.
Isn’t it time we got on with the real work of ensuring a more equal distribution of equality and resources instead of making claims of robots taking jobs that clearly do not stack up.