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When machines replace jobs, the net result is normally more new jobs

Two of the current leading researchers in labor economics studying the impact of machines and automation on jobs have released a new National Bureau of Economic Research (NBER) working paper, The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment.

The authors, Daron Acemoglu and Pascual Restrepo are far from the robot-supporting equivalent of Statler and Waldorf, the Muppets who heckle from the balcony, unless you consider their heckling is about how so many have overstated the argument of robots taking all the jobs without factual support:

Similar claims have been made, but have not always come true, about previous waves of new technologies… Contrary to the increasingly widespread concerns, our model raises the possibility that rapid automation need not signal the demise of labor, but might simply be a prelude to a phase of new technologies favoring labor.

In The Race Between Machine and Man, the researchers set out to build a conceptual framework, which shows which tasks previously performed, by labor are automated, while at the same time more ‘complex versions of existing tasks’ and new jobs or positions in which labor has a comparative advantage are created.

The authors make several key observations that show as ‘low skilled workers’ are automated out of jobs, the creation of new complex tasks always increases wages, employment and the overall share of labor increases. As jobs are eroded, new jobs, or positions are created which require higher skills in the short term:

Whilst “automation always reduces the share of labor in national income and employment, and may even reduce wages. Conversely, the creation of new complex tasks always increases wages, employment and the share of labor.”

They show, through their analysis, that for each decade since 1980, employment growth has been faster in occupations with greater skill requirements

During the last 30 years, new tasks and new job titles account for a large fraction of U.S. employment growth.

In 2000, about 70% of the workers employed as computer software developers (an occupation employing one million people in the US at the time) held new job titles. Similarly, in 1990 a radiology technician and in 1980 a management analyst were new job titles.

Looking at the potential mismatch between new technologies and the skills needed the authors crucially show that these new highly skilled jobs reflect a significant number of the total employment growth over the period measured as shown in Figure 1:

From 1980 to 2007, total employment in the U.S. grew by 17.5%. About half (8.84%) of this growth is explained by the additional employment growth in occupations with new job titles.

Figure 1

Unfortunately we have known for some time that labor markets are “Pareto efficient; ” that is, no one could be made better off without making anyone worse off. Thus Acemoglu and Restrepo point to research that shows when wages are high for low-skill workers this encourage automation. This automation then leads to promotion or new jobs and higher wages for those with ‘high skills.’

Because new tasks are more complex, the creation may favor high-skill workers. The natural assumption that high-skill workers have a comparative advantage in new complex tasks receives support from the data.

The data shows that those classified as high skilled tend to have more years of schooling.

For instance, the left panel of Figure 7 shows that in each decade since 1980, occupations with more new job titles had higher skill requirements in terms of the average years of schooling among employees at the start of each decade (relative to the rest of the economy).

Figure 7

However it is not all bad news for low skilled workers the right panel of the same figure also shows a pattern of “mean reversion” whereby average years of schooling in these occupations decline in each subsequent decade, most likely, reflecting the fact that new job titles became more open to lower-skilled workers over time.

Our estimates indicate that, although occupations with more new job titles tend to hire more skilled workers initially, this pattern slowly reverts over time. Figure 7 shows that, at the time of their introduction, occupations with 10 percentage points more new job titles hire workers with 0.35 more years of schooling). But our estimates in Column 6 of Table B2 show that this initial difference in the skill requirements of workers slowly vanishes over time. 30 years after their introduction, occupations with 10 percentage points more new job titles hire workers with 0.0411 fewer years of education than the workers hired initially.

Essentially low-skill workers gain relative to capital in the medium run from the creation of new tasks.

Overall the study shows what many have said before, there is a skills gap when new technologies are introduced and those with the wherewithal to invest in learning new skills, either through extra education, on the job training, or self-learning are the ones who will be in high demand as new technologies are implemented.

 

 

5 Reads in AI & Robotics – The Rude Bot Rises

Carer robot.png

 

The AI chatbot who learned via the Unabomber Manifesto!

Charles and his team actually created a chatbot called cobot. It was really simple, and it was really dumb. But the users wanted it to be smart, they wanted to talk to it. So Charles and his team had to come up with a quick and easy way to make cobot appear smarter than it actually was. So they showed the robot a bunch of texts (they started, weirdly, with the Unabomber manifesto) and trained it to simply pick a few words that you said to it, search for those words in the things it had read, and spit those sentences back at you.

The resulting conversations between users and cobot are…. very weird. (Rose Eveleth, Flash Forward) You may also want to listen to Rose’s episode Love and Sex With Robots)

 

A fallback plan for when 95% of human labor isn’t valued or needed due to automation 

Basic Income is not necessarily my ideal scenario, but Andrew gives a terrific overview of the pro’s and con’s in this excellent article. The 95% figure comes from Y Combinator Manager, Matt Krisiloff!

Silicon Valley techies hope a guaranteed income would cushion the blow as automation replaces human jobs. Those with a more utopian bent, such as the organizers of the Swiss referendum, want to open up more options, to let people create art and free the world of what Daniel Straub calls “bullshit jobs.” (Andrew Flowers at FiveThirtyEight)

 

Stanford’s robotic diver recovers treasures from King Louis XIV’s wrecked ship

OceanOne looks something like a robo-mermaid. Roughly five feet long from end to end, its torso features a head with stereoscopic vision that shows the pilot exactly what the robot sees, and two fully articulated arms… Every aspect of the robot’s design is meant to allow it to take on tasks that are either dangerous – deep-water mining, oil-rig maintenance or underwater disaster situations like the Fukushima Daiichi power plant – or simply beyond the physical limits of human divers. (Stanford News)

And just think Frey and Osborne said there is only an 18% probability commercial divers will lose their jobs to robots!

 

Progress in A.I. will affect society profoundly

The first wave of AI is already beginning to pervade our lives inconspicuously, from speech recognition and search engines to image classification. Self-driving cars and applications in health care are within sight, and subsequent waves could transform vast sectors of the economy, science and society. These could offer substantial benefits — but to whom? (Nature – Editorial)

 

In your old age what happens if your carer just happens to be a robot?

“There’s a pressing requirement for robots in the social care of the elderly, partly because we have fewer people of working age,” says Tony Belpaeme, a professor in intelligent and autonomous control systems at Plymouth University. Traditionally among the poorest paid of the workforce, carers are an ever more scarce resource.

Policy makers have begun to cast their eyes towards robots as a possible source of compliant and cheaper help. (Geoff Watts in The Atlantic)

 

What are you reading?

 

 

 

In an era of mass unemployment will we become robots pets?

Industry associations and analysts are a special kind of nuisance. They write research papers with titles like: “A World Without Work;” “Anticipating a Luddite Revival;” “Our Work Here is Done;” “Who Owns the Robots Owns the World;” “Robots not Immigrants Could Take Half of Jobs;” and “AI and Robots Threaten to Unleash Mass Unemployment.” These alarmist titles cause news editors to rely on the research papers like fortune-tellers rely on tealeaves.

Despite the good intentions of the authors and their predictions the research evidence is limited and primarily correlational in nature, few studies have demonstrated a causal relationship between the impacts of robots on jobs.

In the minds of many analysts and researchers, humanity is nearing a robot apocalypse where Robots will have taken over most jobs within 30 years leaving humanity facing its ‘biggest challenge ever.’

Then there are the researchers that believe we will all take on a super human intelligence and be implanted with artificial intelligence and robotic limbs like cyborgs, or Max, Matt Damon’s character in the film Elysium. As Yuval Harari sees it, in the one big area I disagree with him in his otherwise very thorough book[1], ‘ordinary’ humans will be unable to compete with robots or enhanced people:

I think it is likely in the next 200 years or so homo sapiens will upgrade themselves into some idea of a divine being, either through biological manipulation or genetic engineering [or] the creation of cyborgs…It will be the greatest evolution in biology since the appearance of life. But we will be as different from today’s humans as chimps are now from us.

If we are to believe the research then unless we upgrade our brains with an implanted A.I. and bodies with some form of exoskeleton, a combination of Edward Scissorhands and a Turing machine, then those that fail to transform are destined to become the “indeterminate blob” described by Robert Nozick.[2] Or as Steve Wozniak, co-founder of Apple, speculates our robot masters might keep a small number of humans around for pets.[3]

Of course, whilst it will be some time before we are robot pets millions of dollars is being put into development of new kinds of drones with the strength and agility of a Pterodactylus that can deliver books to us within 30 minutes and robots that can empty trash bins because we’ve already solved cancer, climate change and homelessness, right?

The facts are, robots, those mechanized metal arms that now assemble and paint most of our cars, still have a long way to go to reach a tipping-point in manufacturing let alone come anywhere near our grandparents as elder care givers. Incidentally, I’ve never understood why we would need robots to take care of our elders when everyone else is going to be unemployed – surely if we have mass unemployment, we can take better care of our elders than a lump of metal with a potty mouth?

There will of course be more and more robots and it will come with some pain as they displace people from jobs. Technological change, like fashion, is always disruptive, and in the long sweep of human history, that disruption has been one of the fundamental sources of economic growth. Who would have thought that the economy could be predicted on sales of men’s underwear or that wearing a non-functional scarf indoors or beanie hat at World Bank meetings would become the norm?

Is this time different?

Business has always been — if you want to increase your bottom line, you’ll move to increase production by cutting out the human element.

My thesis is that current job displacement by machines is inevitable, and whilst this will lead to a significantly large number of people losing their jobs and yes this could be a long-term scenario, we are a long way from the day when the majority of human beings will have no work.

With increasingly ‘intelligent,’ easier to program and more dexterous machines replacing humans both in the manufacturing and the service sectors there will STILL be new jobs for humans to do – we just don’t know what they are yet — and this is one of the reasons we will need robots for elder care.

I’m hopeful – – the best is yet to come.

 

[1] Yuval Noah Harari. Sapiens: A Brief History of Humankind. New York: Harper, 2015. [Google Scholar]

[2] Robert Nozick. Anarchy, State, and Utopia. New York: Basic Books, 1974, pp. 42–45. [Google Scholar]

[3] Benjamin Snyder. “Apple’s co-founder: We’re all going to be robots’ pets one day.” Fortune, 25 June 2015. Available online: http://fortune.com/2015/06/25/apple-wozniak-robots-pets/ (accessed on 30 March 2016).

 

 

Drones are set to add hundreds of thousands of jobs to the world economy

BBC drone pilot and jobs

 

One of the most read articles on Robotenomics is Five areas in Robotics and their economic impact. The first area in the article I cited is drones. Subsequent client research reports by Robotenomics and articles, such as this one on Amazon’s drones have qualified the employment growth for drone pilots. The BBC have a nice summary of job projections which is well worth a read…

Globally, the world market for piloted drones is forecast to more than double by 2022 and be a 4bn euros ($4.37bn) business per year, according to a European Commission impact assessment report issued in December in conjunction with its proposal to gradually create a legal framework for the safe operation of drones. Europe would represent about 25% of the world market, translating into some 150,000 jobs by 2050.

and…

For the next 40-50 years there’s going to be guaranteed jobs,” for those with special skills as a drone pilot or systems engineer

 

 

 

 

 

 

 

 

5 insightful articles about A.I., Robotics and the jobs debate

How Artificial Intelligence Will Revolutionize Our Lives
On one hand, it may help cure cancer and let robots rather than humans fight wars; on the other, doctors and lawyers may be out of a job. (National Geographic)

Interview with LinkedIn founder touches on A.I. and basic income
“We cannot ignore this problem. Right now, everybody’s punting. We know the share of income that goes to wages is a declining portion, compared with capital expenditures. What does that mean for jobs? Entrepreneurship is part of the answer. Mass-scale entrepreneurship. Before you even get to A.I.” (The New Yorker)

Are We Approaching an Economic Singularity?
Information Technology and the Future of Economic Growth — The idea here is that rapid growth in computation and artificial intelligence will cross some boundary or Singularity, after which economic growth will accelerate sharply as an ever-increasing pace of improvements cascade through the economy. (William D. Nordhaus NBER Working Paper)

The Future of Work: The Three Dimensions of Artificial Intelligence
What worries you most — and/or excites you most — about the future of work and workers? Put another way: What will be the most consequential changes in the world of work and workers, and what anxieties and possibilities will they produce?

“In periods of technology diffusion including the current period, the future of work and workers depends as much on how we deal with the technology as on the technology itself. It is time we corrected AI’s third dimension so we can return to the job of building the future of work.” (Pacific Standard)

Rodney Brooks warns that technologists must consider how advances in robotics and AI will eradicate jobs.
Brooks admitted he was sometimes guilty of focusing on technological innovation rather than its social implications himself. But he added that it was increasingly clear that this needs to be part of the debate. “Technological innovations can have severe impacts on society,” he said. (MIT Technology Review)

Robot economy – growth and progress is not a one way street

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.[1] 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.[2]

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.”[3] Whilst Forbes Political Editor and a Senior Economic Adviser, John Tamny has indicated: “Robots will be the biggest job creators in history.”[4]

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.”[5]

Which raises the question should robots be seen as a positive thing, rather than the “dystopian world” some fear?

Notes:

[1] Carlota Perez, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages

[2] 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.

[3] 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/).

[4] 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)

[5] 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)  

Study – Robots are not taking jobs

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.

Autopsy

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.

Robotenomics auto summary jobs

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.