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Manufacturing Robots Seem to Be Improving Productivity

According to a Harvard Business Review article rigorous data has now emerged showing that industrial robots are a substantial driver of labor productivity and economic growth.

Between 1993 and 2007, the use of industrial robots drove 10% of GDP growth and 16% of labor productivity growth across 14 industries in 17 countries. To put this is perspective that’s roughly the same productivity increase that resulted from the steam engine between 1850 and 1910.

The authors also investigate whether there is a relationship between the use of industrial robots and manufacturing job losses?

If robots are substituting for human workers, then one would expect the countries with higher investment rates in automation to have experienced greater employment loss in their manufacturing sectors.

For example, Germany deploys over three times as many robots per hour worked than the U.S. and Sweden has 60% more robots per hours worked than the U.S. But Germany lost just 19% of its manufacturing jobs between 1996 and 2012 compared to a 33% drop in the U.S. Korea, France, and Italy also lost fewer manufacturing jobs than the United States, even as they introduced more industrial robots. On the other hand, countries like the United Kingdom and Australia invested less in robots but saw faster declines in their manufacturing sectors.

Their conclusion is that, as yet, there’s no visible relationship between the use of robots and the change in manufacturing employment. However one impact on jobs from the arrival of robots seems to be an “increase in the employment and pay of skilled workers even as it seemed to “crowd out” employment of low-skill and, to a lesser extent, middle-skill workers. So while robots don’t seem to be causing net job losses, they do seem to change the sort of workers that are in demand.

It took a generation for the use of computers to become visible in, and then grow, the productivity statistics. The same may be happening with manufacturing robots. That the effects of manufacturing robots are now visible in the productivity data suggests they may elevate manufacturing productivity for many years to come. However, and as yet, their impact on employment “is less clearly visible, and may be positive, negative, or mixed.

Our take is that, just as your industrial website and product CAD models can drivie up industrial sales and marketing productivity so manufacturing robots, and skilled people to manage them, will be a significant part of our future manufacturing productivity growth. We agree with what John Kerry once said , “Our future is not in competing at the low-level wage job; it is in creating high-wage, new technology jobs based on our skills and our productivity.” Manufacturers need to drive up their productivity both in manufacturing and in sales and marketing.

That’s our take – please let us know yours by commenting below…

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