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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.
*Updated Friday 5th December after email correspondence with Professor D’Andrea
In the early summer I wrote about the economics of Amazon’s drones, the post highlighted the cost of logistics to Amazon and some back of the envelope calculations about the likely costs of drone delivery. In the article I indicated that Amazon would require pilot’s for their drones, especially in the early years of operation, it seems far fetched that we will have fully autonomous delivery drones in our cities without some sort of human oversight, at least in the next ten years or so. Backing up my calculations a recent job advert by Amazon indicates that they are looking for drone pilots, whilst similar jobs attract annual salaries of approximately $100,000 per year.
Earlier this year Helen Greiner CEO of CyPhy Works outlined her vision of delivery drones in 5 years. Meanwhile DHL have started testing the use of delivery drones to transport medicine to a small the North Sea island of Juist.
So is it economically feasible to deliver packages by drones?
Professor of robotics and autonomous vehicles Raffaelo D’Andrea of ETH Zurich, who is responsible for the Flying Machine Arena (“a space where flying robots live and learn”), and co-founder of Kiva Systems (robotics company acquired by Amazon, Inc. for US$ 775 million in cash), thinks it is economically feasible to deliver small packages by drone.
In a guest editorial for IEEE Automation Science and Engineering (Pdf), Professor D’Andrea detailed some calculations he had previously used to assess the costs of drone delivery for Matternet whose ‘vision was to create a transportation network based on flying machines, and to initially address niche markets such as medicine delivery in underdeveloped and hard to reach areas,’ and also compared to those that they had previously used for Kiva systems “business plan for the total cost of delivery.”
To assess the costs Raff initially uses two assumptions:
- Payload of up to 2 kg.
- Range of 10 km with headwinds of up to 30 km/h.
In his calculations, to arrive at the likely costs of drone delivery, D’Andrea analyzes the power consumption in kW, payload mass of 2 kg; a vehicle mass of 4 kg (battery weight of 2kg); the lift-to-drag ratio; power transfer efficiency for motor and propeller; power consumption of electronics, in kW, electricity costs and cruising velocity, in km/h, air speed and headwinds.
After analyzing the weight of the drone, payload (parcel) drag, headwinds, etc. Professor D’Andrea states:
“So, is package delivery using flying machines feasible? From a cost perspective, the numbers do not look unreasonable: the operating costs directly associated with the vehicle are on the order of 10 cents for a 2 kg payload and a 10 km range. I compare this to the 60 cents per item that we used over a decade ago in our Kiva business plan for the total cost of delivery, and it does not seem outlandish.”
Updated — Via email correspondence, D’Andrea points out that the ten cent cost described in the IEEE guest editorial was for energy (including battery replacement), and not for the amortized cost of the vehicles and vehicle maintenance. Assuming a vehicle cost of $1000 per unit (this is reasonable if Amazon is buying in the thousands), adding 20% per year for maintenance, and amortizing this over 5 years, this would amount to an additional $400/per year, or roughly $1/day. If each vehicle ran 10 missions per day, that’s an additional 10 cents per package on top of the 10 cents in energy costs calculated previously, for a total cost of about 20 cents per package.
20 cents per delivery is far less than what Amazon is currently paying. According to shipping-industry analysts Amazon typically pays between about $2 and $8 to ship each package, and the possible cost of drone delivery as laid out by Professor D’Andrea would go a long way to reducing Amazon’s annual losses of $3.538 billion related to shipping costs they incurred in 2013 and US$ 8.829 billion in cumulative shipping losses between financial year ended 2011 and financial year ending 2013.
Professor D’Andrea also outlines the obstacles to drone delivery, in addition to regulatory hurdles, privacy concerns, etc., indicating that additional automation research is needed to address three main challenges:
- vehicle design,
- localization navigation,
- vehicle coordination.
Answering these points he provides a very good overview of the obstacles:
Vehicle design encompasses creating machines that are efficient, (most probably) can hover, can operate in a wide range of conditions, and whose reliability rivals that of commercial airliners; this is a significant undertaking that will require many iterations, and the ingenuity and contributions from folks in diverse areas.
Localization and navigation may seem like solved problems because of the many GPS-enabled platforms that already exist, but delivering packages reliably, in different operating conditions, in unstructured and changing environments, will require the integration of low-cost sensors and positioning systems that either do not yet exist, or are still in development.
Finally, thousands of autonomous agents in the air, sharing resources such as charging stations, will require robust co-ordination which can be studied in simulation.
He expects that delivery by drones is a real probability and concludes his opinion piece by writing that for better or for worse ‘goods being delivered by flying machines will result in packages flying above our heads in the not so distant future.’
Whilst the word ‘robot’ generally conjures up visions of humanoids with superior intelligence, this science fiction image tends to forget the other type of robots: machines that carry out complicated motions and tasks, such as automated software processes (1), industrial robots, unmanned vehicles (driverless cars, drones) or even prosthetics. And it is principally the programmable machine robots that are among the robotic advances being acquired by major companies across the globe (2). These are also the robotic technologies that are disrupting commercial production and employment, and will likely continue to do so over the remainder of this decade.
Many economists and technophobes claim automation and technological progress has broad implications for the shape of the production function, inequality, and macroeconomic dynamics. However, robotics is also adding hundreds of thousands of jobs to the payroll across the globe, and it may just be that people have not yet acclimatized to the new jobs and skills required to do them.
Job displacement and skill gaps
In his magical science fiction classic, The Hitchhiker’s Guide to the Galaxy, Douglas Adams wrote about the ‘B’ Ark.
“The ‘B’ Ark was one of three giant space ships built to take people off the ‘doomed’ planet and relocate them on a new one. The inhabitants of ‘B’ Ark included: “tired TV producers, insurance salesmen, personnel officers, security guards, public relations executives, management consultants, account executives, and countless others.”
These were essentially people displaced from the workplace by automation.
Douglas Adams explained that there were three space ships, each designated for a different type of person: “the idea was that into the first ship, the ‘A’ ship, would go all the brilliant leaders, the scientists, the great artists, you know, all the achievers; and into the third, or ‘C’ ship, would go all the people who did the actual work, who made things and did things; and then into the `B’ ship – that’s us – would go everyone else, the middlemen.”
We later discover the planet was not in fact doomed, nor did the other two giant spaceships, ‘A’ Ark and ‘C’ Ark depart the planet.
MIT Economist David Autor and his co-authors echo Adams point that technology is displacing the ‘middle-class,’writing that automation has:
“Fostered a polarization of employment, with job growth concentrated in both the highest and lowest-paid occupations, while jobs in the middle have declined.”
This job polarization has in fact contributed significantly to income inequality.
Research by Lawrence Katz Professor of Economics at Harvard also shows the ‘hollowing out’ of middle skilled jobs due to technological advances. A recent paper by Carl Frey and Michael Osborne of Oxford University concludes that 47 per cent of US jobs are at high risk from automation.
It’s not all doom and gloom for those with ‘middle skills’ and the MIT and Harvard researchers do allude to an increase in jobs and income for the ‘new artisans,’ a term coined by Professor Katz to refer to those who ‘virtuously combine technical and interpersonal tasks.’
Expanding upon this, Professor Autor expects that ”a significant stratum of middle skill, non-college jobs combining specific vocational skills with foundational middle skills – literacy, numeracy, adaptability, problem-solving and common sense – will persist in coming decades.”
Those skills according to Autor will provide employment for:
“Licensed practical nurses and medical assistants; teachers, tutors and learning guides at all educational levels; kitchen designers, construction supervisors and skilled tradespeople of every variety; expert repair and support technicians; and the many people who offer personal training and assistance, like physical therapists, personal trainers, coaches and guides. These workers will adeptly combine technical skills with interpersonal interaction, flexibility and adaptability to offer services that are uniquely human.”
Skill-biased technological change is not a new phenomenon. Joseph Schumpeter termed it Creative Destruction. Writing at the time of the Great Depression in the 1930’s, he said the prime cause of economic development was entrepreneurial spirit: “Without innovations, no entrepreneurs; without entrepreneurial achievement, no capitalist returns and no capitalist propulsion.”
Many smart people of that time believed that technology had reached its limits and capitalism had passed its peak. Schumpeter believed the exact opposite, and of course he was right. Technology changes, economic principles do not. As demand for one set of labor skills declines, demand for a new set of skills grows, often with better pay.
Why are big corporations buying robotic companies?
Major corporations, and creative destructors, such as Google, Amazon, Apple, Inc. have made headlines recently with their acquisitions of Robot and Deep Learning companies, the use of Machine Learning technology and their Artificial Intelligence aspirations.
What exactly do these corporations want with robots and Artificial Intelligence, and how does it impact society?
Andrew Ng, a Professor at Stanford University and Google fellow who teaches a popular Coursera (online free education) class in Machine Learning, says:
“In the past decade, machine learning has given us self-driving cars, practical speech recognition, effective web search, and a vastly improved understanding of the human genome. Machine learning is so pervasive today that you probably use it dozens of times a day without knowing it. Many researchers also think it is the best way to make progress towards human-level AI.”
Machine learning technology helps the machine to learn and remember things, or to act ‘without being explicitly programmed.’ It is the science (or art) of building algorithms that can recognize patterns in data and improve as they learn. For example, it may use your last search queries and current location to improve new search results, effectively providing enhanced search results.
Whilst machine learning is used extensively across companies such as Facebook, Google, LinkedIn, Netflix, Twitter, Apple, Adobe, Microsoft and many more, it’s not just the tech companies that are seeing the benefits. Machine learning technology is much in demand across industry with proven results at Wall Street investment banks, insurance companies and motor manufacturers such as Toyota and Tesla Motors.
Machine learning and health
IBM’s Watson is possibly the most famous example of a system using machine learning through its triumph at the popular TV gameshow Jeopardy. Watson is now aiding researchers and medical practitioners, and is (or will soon be) the world’s best diagnostician for cancer related ailments.
Having machines assist medical practitioners and researchers could significantly improve diagnoses and treatments for patients. Additionally these technologies will become more pervasive through wearable devices, such as Google Glass, Android phones, Apple’s iPhone or maybe a new Apple ‘iHealth’ gadget using its M7 motion sensing technology to monitor our health on the go.
I personally believe that significant improvements will be made in people’s health and wellbeing through improved technology advances, robotic treatments in hospitals, such as the operating theater and prescription services, improvement of assisted devices and prosthetics for those with disabilities and on a very large scale wearable technology. Machine learning and robotic technology will be central to this health revolution.
Machine learning is a game changer for those companies that implement its technologies successfully. Jobs for people with machine learning technology skills are and will continue be much in demand in the coming decade, particularly in industries where ‘Big Data’ factors heavily.
In March 2012, Amazon announced the $775 million cash acquisition of Kiva Systems, a warehouse automation robot, and some seventeen months later, in October 2013, Amazon CEO Jeff Bezos noted that they had “deployed 1,382 Kiva robots in three Fulfillment Centers.” Amazon has approximately 52 fulfillment centers spread across 8 countries with at least another 12 announced to be open in the next 9 months.
The rollout of Kiva robots across these fulfillment centers will have a significant strategic benefit to Amazon as it moves towards its goal of becoming the world’s largest retailer. So far this rollout has not reduced the number of employees at Amazon. In fact, Amazon continues to significantly grow its number of employees: last year Amazon added 20,000 full-time employees to its US fulfillment centers alone and this week announced a further recruitment drive of an additional 2,500 full time US fulfillment staff, indicating a 30 percent pay premium over traditional retail jobs. At the end of December 2013 Amazon employed 117,300 full and part-time employees globally (excluding contractors and temporary personnel). This is more than four times the 28,300 employees it reported on June 30th 2010, just three and half years ago. An increase of 89,000 jobs.
Kiva, together with the right qualified employees, provides Amazon the ability to cut its fulfillment costs, double its productivity, and increase its service levels.
Industrial robot manufacturers are reporting between 18 percent and 25 percent growth in orders and revenue year on year. Whilst some jobs will be displaced due to the increased rollout of robots in the manufacturing sector, many will also be created as robot manufactures recruit to meet their growing demand and jobs. Furthermore, jobs that were previously sent offshore are now being brought back to developed countries (for example, Apple manufacturing its Mac Pro in America and spending approximately US$ 10.5 billion in assembly robotics and machinery).
Cognitive machine assistants
There have been recent press speculations that Google intends to enter the industrial robot market after the acquisition of 8 robot companies at the end of 2013. Reports indicate that Andy Rubin, former head of Google’s Android platform, and new head of their robot development, met with Foxconn Chairman Terry Gou to discuss Foxconn’s robot initiatives (replacing 1 million employees with robots).
Whilst I think it highly unlikely Google will become a manufacturer of industrial robots, I do think it could use Mr. Rubin’s experience of creating a telecom industry-standard platform in order to develop a standard for an industrial robot platform, and that Google could lead and license this to other industrial robot manufacturers. If Google does go this route, expect them to announce the collaboration – as it has done with the Android development and the driverless car standard framework.
What does Google want with the robot companies it has acquired?
The immediate need is likely to be related to Google’s localization and mapping strategy. Google spends billions of dollars per year on its mapping program, and due to sophisticated new search technologies (especially mobile-related improvements in cognitive assistants, such as Google Now and Siri), Google must seek ways to stabilize the costs and ward off the threat of competition.
A big part of this requires that the search giant provides the best mapping experience and localization services. Remember that maps are not set in stone, but are constantly evolving; biannual updates of Street View and other associated solutions add considerably to the costs; and Google also wants to map inside major buildings, such as shopping malls, airports, etc, and indeed it has already started. Imagine the advertising opportunities and revenues available through improved localization!
Google knows search is becoming local and whilst its algorithms are some of the most advanced, within the next three years it expects Google Now (its voice-activated ‘cognitive assistant’) to deliver far more useful and relevant data to consumers. Without significant improvements in localization, including traffic data (which Google can deliver through its Waze purchase and integration) Google’s search advertisement revenue will falter. I’ve written more extensively on this here, and recently Google’s Director of Research Peter Norvig mentioned “the global localization and mapping problem” when he was asked a question relating to Google and robots interest (video around the 50 minutes mark). It makes more sense to send robots with high visualization and recording capabilities on mapping expeditions across the world than platoons of people carrying expensive and heavy equipment.
The real value produced by an information provider comes in locating, filtering, and communicating what is useful to the consumer. Google does that better than others, and its robot acquisitions – coupled with its machine learning and AI expertise – are designed to keep it at the forefront.
The fact that major corporations are buying into robotics, artificial intelligence and related technologies is helping to not only preserve but to increase their market share. Yes, jobs will be displaced, but many more will be created in the process. Great opportunities will be available to those with skills to complement and work with the machines.
[i] Automation and robotics are often considered the same in many languages and it is this automation, through advances in machine learning and artificial intelligence that is driving rapid development in our workplaces.
[ii] Of course these programmable machine robots, and their advanced technologies in software and hardware, will eventually lead to the successful development of humanoid robots.
Amazon, the world’s largest online retailer, is testing unmanned drones to deliver goods to customers, according to Chief Executive Jeff Bezos.
The drones, called Octocopters, could deliver packages weighing up to 2.3kg to customers within 30 minutes of them placing the order, he said.
Bezos indicated that it could take up to four years for the service to start, possibly due to the fact that the US Federal Aviation Administration is yet to approve the use of unmanned drones for civilian purposes (although that permission is considered imminent).
“I know this looks like science fiction, but it’s not,” Mr Bezos told CBS television’s 60 Minutes programme.
“We can do half-hour delivery… and we can carry objects, we think, up to five pounds (2.3kg), which covers 86% of the items that we deliver.”
The service will be called Prime Air and comes as Amazon is looking to improve its efficiency to further strengthen its client relations and boost growth.
Civilian air space is expected to be opened up to all kinds of drones in the US by 2015 and in Europe by 2016. Bloomberg reports: “Expanded use of commercial drones is inevitable.”
Amazon said “from a technology point of view, we’ll be ready to enter commercial operations as soon as the necessary regulations are in place”.
The FAA was “actively working on rules for unmanned aerial vehicles”, the company said, adding that it hoped the green light would be given as early as 2015.
On its website Amazon wrote: “One day, Prime Air vehicles will be as normal as seeing mail trucks on the road today.” Check out a video of Amazon demonstrating its Prime Air service below: