Robotics Industries: We’re Creating Jobs, Helping the Economy

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Are robots a boon or a burden to the economy?

The Robotics Industries Association wants to remind the American public that automation can create jobs for people just as easily as others worry they may take them away. President Jeff Burnstein recently wrote an editorial for Bloomberg BusinessWeek highlighting how the robotics industry strengthens the US economy and how industrial robots will help US companies compete, ultimately leading to better jobs for American workers. This unsurprisingly positive stance towards automation from the RIA is backed up by good numbers: robot sales are on the rise and US robotics companies are increasing in size and stature. Is automation going to be good for the US economy? What about the global economy? Looks like it’s time for another edition of one of our favorite topics here at the Hub: automation and employment.

According to the RIA, there are about 1 million industrial robots actively employed in the world, of which about 196,000 are in the US (second only to Japan). If you include non-industrial bots, the number ramps up to close to 8 million. Those robots have a significant impact on the global economy by increasing production levels and decreasing (over the long term) production costs while requiring less human labor. As impressive as these numbers are now, there’s little doubt that they’ll see big growth in the years ahead.

Automation is expanding from simple manufacturing and industrial settings into a wider range of applications. We’ve already seen artificial intelligence tackle everything from astronomy to sports writing. As I discussed in my review of Martin Ford’s book on the topic, automation is likely to continue to expand into industries and jobs that we don’t normally consider vulnerable. Whether its with robots or computer programs, human labor is going to see itself replaced at some level in many different fields.

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Automation will affect more than just manufacturing. Artificial intelligence could take over everything from sales to R&D..

The question is, will that be a good thing? Burnstein’s article in Bloomberg makes an interesting (and very Ameri-centric) point. Robots are good for the US economy in part because they counter balance lower labor costs in other countries. Manufacturing projects that might get out-sourced to China or Mexico could stay in the US thanks to robots that allow factories to work at lower costs and higher efficiency. These robot-factories may not employ as many US workers as ones in the past, but the maintenance, oversight, and sales jobs associated with them will stay in the country instead of leaving with the factories. The same might be true in Europe. Burnstein points out that this retention of manufacturing could be very important as new ‘green energy’ projects start to ramp up in the next few years.

RIA’s other major evidence that automation is good for the (US) economy is that the creation of robots is itself creating jobs. Since its inception in 1974, the RIA has come to represent some 225 companies in the robotics industry. These businesses employ hundreds of thousands of workers. Groups like Adept, iRobot, and Intuitive Surgical Systems (maker of the Da Vinci surgical system), are all based in the US. As these companies grow, so too will the jobs associated with them. According to a recent report from the RIA, the first quarter of 2010 saw a 45% increase in robotics sales (in dollars) over the previous quarter. That’s great news for the industry, though they admit that this is partially due to a slump in 2008-2009.

I think that Burnstein and the RIA are making some interesting points. Yes, as with the growth of any new industry, leaders of the robotics field are going to experience considerable financial gains that will translate into regional economic benefits. Those benefits will include new jobs, many at higher income brackets. But what about the global economy as a whole? And what about the far future?

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Automation is going to do more than just play a game of musical chairs with the available jobs in the world. In the short term, robotics and artificial intelligence may create a battle between out-sourcing and automation. Eventually, however, every side is going to use robots. Everyone is going to be developing AIs that replace human labor. With the increasing inter connectivity of the global economy it’s going to become less important whether jobs are being sent to India or the US, and much more important about how the shift in employment affects the average (global) citizen.

On that topic there is a divergence of opinions. Martin Ford (and others) foresee a dramatic decrease in human employment with the danger of economic collapse if we don’t drastically rethink the way consumers gain purchasing power. While I admit that such a catastrophe is a possibility, I think the fundamental nature of employment may already be shifting.

Consider this half-formed notion in my head: what if we all became entrepreneurs with a plurality of capital enterprises? Open source projects are fostering innovation and reshaping the concepts of ownership. Facebook and other social media are gearing up to provide (non-monetary?) compensation (i.e. ‘points’) for their use, ‘gaming’ the system of advertisement. The creation of an Internet of Things could radically alter how consumers are expected to act, increasing their roles in design and marketing.

I’m not saying that any of these developments are going to “save” the economy from automation, but all of them have the potential to reshape the way that economy works. It’s important that we consider the long term effects of automation on the global labor market (something that many economists simply do not seem to be doing) but we should also admit that there are many factors that we cannot predict. New trends in purchasing and product development could affect labor as much as automation, and we don’t know how those forces will interact.

Which leaves us where we often find ourselves when considering the far future: mostly in the dark. The RIA makes a good pitch for robots helping to revamp and rebuild the US economy. Along with other robotics innovators (Japan, we’re looking at you here), the US could experience tremendous boosts as the industry continues to grow. Beyond that though…well, there’s a reason we call it the Singularity, and it’s not because it’s easy to predict.

[image credits:WikiCommons, Virtual Sales Bot]
[source: RIA press release, Bloomberg Businessweek]

Discussion — 28 Responses

  • k. June 19, 2010 on 7:30 pm

    Where to stop automation , and robotic ?

    Where ?

    If you automatize the process of creating, and repairing automation : what do you do ?

    THERE IS NO MORE ECONOMY : THERE IS NO MORE JOBS, AND THERE IS NO MORE CONSUMER.

    THis is an economical singularity : an economical black hole :

    YOU should really consider talking about new kind of economy, or new deal for the people.

    • k. k. June 19, 2010 on 7:33 pm

      And don’t forget china will also automatise its power … and what ? This is a joke or one more stupid point of view from an economist ?

      Every Economist should shut up : they don’t know how the world work, at all.

  • k. June 19, 2010 on 3:30 pm

    Where to stop automation , and robotic ?

    Where ?

    If you automatize the process of creating, and repairing automation : what do you do ?

    THERE IS NO MORE ECONOMY : THERE IS NO MORE JOBS, AND THERE IS NO MORE CONSUMER.

    THis is an economical singularity : an economical black hole :

    YOU should really consider talking about new kind of economy, or new deal for the people.

    • k. k. June 19, 2010 on 3:33 pm

      And don’t forget china will also automatise its power … and what ? This is a joke or one more stupid point of view from an economist ?

      Every Economist should shut up : they don’t know how the world work, at all.

  • Jeremy June 20, 2010 on 2:27 am

    The question is, as robots become more commonplace, will “work” be as important?

    For instance, the moment we have an affordable robot gardener, everybody with property is a subsistence farmer. And for those without property, there is the community garden. Actually, the community gardener approach might be better for everyone as efficient robots can grow for more than a family of four, and it raises the threshold for the robot to be “affordable” .

    And then once we find more cost effective home-produced energy, and more efficient ways to recycle grey water and eventually sewage at home, and 3D printing allowing increasingly complex home manufacturing, the fact is we really won’t need as much work. Sure, there will still need to be things to be bought, but we can start having people cut back on their hours (and thus allowing more people to work). It should be noted though that cutting-edge technology will not be produced at home, and so there will still incentive to compete economically.

    The other thing I think is going to happen is as autonomous manufacturing become cheaper, we are going to start seeing “factory co-ops”. You pay a due or work one of the skeleton crews and then you can starting purchasing the product at production cost (which, lacking labor, is mainly raw materials and energy and shipping- that is, until you have autonomous mining, etc.) As more people join you can start saving to buy more factories, increasing the benefit of joining and creating a feedback loop.

    Also- yes, entrepreneurship. Now that we are developing crowd funding, social web-based word of mouth, better rapid prototyping, etc. its slowly becoming easier to start up a business.

  • Jeremy June 19, 2010 on 10:27 pm

    The question is, as robots become more commonplace, will “work” be as important?

    For instance, the moment we have an affordable robot gardener, everybody with property is a subsistence farmer. And for those without property, there is the community garden. Actually, the community gardener approach might be better for everyone as efficient robots can grow for more than a family of four, and it raises the threshold for the robot to be “affordable” .

    And then once we find more cost effective home-produced energy, and more efficient ways to recycle grey water and eventually sewage at home, and 3D printing allowing increasingly complex home manufacturing, the fact is we really won’t need as much work. Sure, there will still need to be things to be bought, but we can start having people cut back on their hours (and thus allowing more people to work). It should be noted though that cutting-edge technology will not be produced at home, and so there will still incentive to compete economically.

    The other thing I think is going to happen is as autonomous manufacturing become cheaper, we are going to start seeing “factory co-ops”. You pay a due or work one of the skeleton crews and then you can starting purchasing the product at production cost (which, lacking labor, is mainly raw materials and energy and shipping- that is, until you have autonomous mining, etc.) As more people join you can start saving to buy more factories, increasing the benefit of joining and creating a feedback loop.

    Also- yes, entrepreneurship. Now that we are developing crowd funding, social web-based word of mouth, better rapid prototyping, etc. its slowly becoming easier to start up a business.

  • Daryl June 20, 2010 on 8:33 am

    Jeremy, you make some excellent points. Too often, when the discussion of automation comes up, people express their concern that it will lead to unemployment, and don’t consider how it will revolutionize the entire economy.

    The fact is, once automation is effective and widespread, the cost of food, materials, transportation, and even energy will drop drastically. Remember that the largest component of the cost of most items is the human labor that goes into their production.

    We’re on the verge of a tremendous change in the world economy, due to the advent of widespread automation. The traditional jobs, especially menial labor, will be gone. But we’ll also have a corresponding drop in the costs of goods and services. And a rise in our standard of living.

    As a simple example, I don’t vacuum the carpet in my house every day, because I don’t have the time. Nor can I afford to pay someone to do it. But if I had a robotic maid (something as effective as a human, not a Roomba), then I would set it to clean every day. The same is true of the cooking and gardening and repair work. In effect, I’d be living the life of a much richer man, simply because those regular jobs have become automated and therefore virtually wage free. My standard of living, and that of everyone else, would be increased substantially.

    In the limit, as we approach the state of virtually every job being performed by machines (total automation), human labor will become unnecessary. If we’re smart about how we achieve this AI scenario, then all of humanity can take a permanent vacation (retirement?), and enjoy the fruits of robotic labor. On the other hand, if we don’t create human-friendly AI, then unemployment will be the least of our concerns…

    We’re approaching the crossroads rapidly.

    • Jacob Daryl June 20, 2010 on 4:11 pm

      This is a well written and thoughtful article, and I think that naysaying the idea just because it’s well known what automation does now is shortsighted.

      Look at what happened with the invention of the shipping container:
      Entire communities of longshoreman all around the world disappeared, all those men who used hooks and poles to unload hand packed barges became unemployed. On the flipside, we can now see that the price of shipping has plummeted. The cost of shipping within the price of any product was as high as 40% before the shipping container was invented, it currently stands at 2%. As a result of global trade, the entire world is now more prosperous than ever before, we can eat fruit grown out of season at any time of year, and we can get cheap goods of any description from anywhere in the world.

      The shipping container is automation, but I dare anyone to claim that we’d be better off spending three months carefully packing a ship before it leaves port just so that we can retain the employment.

      Looking forward, if a government could simply give people a robotic gardener and pay their rent, then there would be no need for social security payments or the dole, you could simply provide all the basics for a person without giving them money.

  • Daryl June 20, 2010 on 4:33 am

    Jeremy, you make some excellent points. Too often, when the discussion of automation comes up, people express their concern that it will lead to unemployment, and don’t consider how it will revolutionize the entire economy.

    The fact is, once automation is effective and widespread, the cost of food, materials, transportation, and even energy will drop drastically. Remember that the largest component of the cost of most items is the human labor that goes into their production.

    We’re on the verge of a tremendous change in the world economy, due to the advent of widespread automation. The traditional jobs, especially menial labor, will be gone. But we’ll also have a corresponding drop in the costs of goods and services. And a rise in our standard of living.

    As a simple example, I don’t vacuum the carpet in my house every day, because I don’t have the time. Nor can I afford to pay someone to do it. But if I had a robotic maid (something as effective as a human, not a Roomba), then I would set it to clean every day. The same is true of the cooking and gardening and repair work. In effect, I’d be living the life of a much richer man, simply because those regular jobs have become automated and therefore virtually wage free. My standard of living, and that of everyone else, would be increased substantially.

    In the limit, as we approach the state of virtually every job being performed by machines (total automation), human labor will become unnecessary. If we’re smart about how we achieve this AI scenario, then all of humanity can take a permanent vacation (retirement?), and enjoy the fruits of robotic labor. On the other hand, if we don’t create human-friendly AI, then unemployment will be the least of our concerns…

    We’re approaching the crossroads rapidly.

    • Jacob Daryl June 20, 2010 on 12:11 pm

      This is a well written and thoughtful article, and I think that naysaying the idea just because it’s well known what automation does now is shortsighted.

      Look at what happened with the invention of the shipping container:
      Entire communities of longshoreman all around the world disappeared, all those men who used hooks and poles to unload hand packed barges became unemployed. On the flipside, we can now see that the price of shipping has plummeted. The cost of shipping within the price of any product was as high as 40% before the shipping container was invented, it currently stands at 2%. As a result of global trade, the entire world is now more prosperous than ever before, we can eat fruit grown out of season at any time of year, and we can get cheap goods of any description from anywhere in the world.

      The shipping container is automation, but I dare anyone to claim that we’d be better off spending three months carefully packing a ship before it leaves port just so that we can retain the employment.

      Looking forward, if a government could simply give people a robotic gardener and pay their rent, then there would be no need for social security payments or the dole, you could simply provide all the basics for a person without giving them money.

  • Afterthought June 20, 2010 on 12:35 pm

    The trend of human life has been to maximize efficiency at a particular level of technology, sit idle, then channel that idleness into war, revolution, or yet higher technology.

    The robotics people, as part of option three, are the good guys.

    But let’s not kid ourselves about the net effect of robotics: it replaces human labor, especially unskilled and semi-skilled labor.

    • k. Afterthought June 20, 2010 on 6:53 pm

      Not only unskilled : automation ( and basic ia ) could replace ANY JOB.

      Even if you are the big boss, software does a better analysys than you : this is what is done at wallstreet : 70% of exchange is DECIDED through IA.

      Even if you are an artist… creativity is done faster with software and IA. Imagine you compute every possible thing that human should consider as “art” and original. THeN ?

      I REPEAT : Do you want to suicide humanity ?

      Consider a new deal with the new technology : this has to be done : the process should stop : for human sake !

      RESISTANCE IS NOT FUTILE.

      DEFINE THE NEW HUMANITY, or die.

      The process should stop : we have to accept that some task must be done with human ( i don’t know which one … ).

      • k. k. June 20, 2010 on 6:54 pm

        At least decision and freedom should be human.

  • Afterthought June 20, 2010 on 8:35 am

    The trend of human life has been to maximize efficiency at a particular level of technology, sit idle, then channel that idleness into war, revolution, or yet higher technology.

    The robotics people, as part of option three, are the good guys.

    But let’s not kid ourselves about the net effect of robotics: it replaces human labor, especially unskilled and semi-skilled labor.

    • k. Afterthought June 20, 2010 on 2:53 pm

      Not only unskilled : automation ( and basic ia ) could replace ANY JOB.

      Even if you are the big boss, software does a better analysys than you : this is what is done at wallstreet : 70% of exchange is DECIDED through IA.

      Even if you are an artist… creativity is done faster with software and IA. Imagine you compute every possible thing that human should consider as “art” and original. THeN ?

      I REPEAT : Do you want to suicide humanity ?

      Consider a new deal with the new technology : this has to be done : the process should stop : for human sake !

      RESISTANCE IS NOT FUTILE.

      DEFINE THE NEW HUMANITY, or die.

      The process should stop : we have to accept that some task must be done with human ( i don’t know which one … ).

      • k. k. June 20, 2010 on 2:54 pm

        At least decision and freedom should be human.

  • Joe June 20, 2010 on 8:54 pm

    I’m new to this site, and since it’s so tech friendly I didn’t expect a piece critical of RIA’s claims, and have been pleasantly surprised with the quality and thoughtfulness of these articles. Aaron is right in noting that what automation will do in the future is uncertain. It also depends on humanity’s approach toward merging with machines — this article treats robots as the “other” but the lines between machines and humans will be blurred. If humanity keeps a unique and separate identity from machines, like in Star Trek: TNG, hopefully a new economy will emerge not based on money or survival, but talents, passion and spirit. There are lots of people today lucky enough to be working not for money but for passion, having their basic material met (I’m one of them). In the long term, little can be predicted. In the short term, though, I hope automation will lower the cost of material goods and alleviate poverty. Unemployment wouldn’t be so bad if it weren’t for the economic consequences — if the standard of living for all people are being raised by automation, even if that automation leads to unemployment it is still a good thing.

  • Joe June 20, 2010 on 4:54 pm

    I’m new to this site, and since it’s so tech friendly I didn’t expect a piece critical of RIA’s claims, and have been pleasantly surprised with the quality and thoughtfulness of these articles. Aaron is right in noting that what automation will do in the future is uncertain. It also depends on humanity’s approach toward merging with machines — this article treats robots as the “other” but the lines between machines and humans will be blurred. If humanity keeps a unique and separate identity from machines, like in Star Trek: TNG, hopefully a new economy will emerge not based on money or survival, but talents, passion and spirit. There are lots of people today lucky enough to be working not for money but for passion, having their basic material met (I’m one of them). In the long term, little can be predicted. In the short term, though, I hope automation will lower the cost of material goods and alleviate poverty. Unemployment wouldn’t be so bad if it weren’t for the economic consequences — if the standard of living for all people are being raised by automation, even if that automation leads to unemployment it is still a good thing.

  • Septeus7 June 21, 2010 on 2:38 pm

    Everyone seems to be forgetting how the benefits of these robots are for now concentrated in the advanced economies and that majority of the world still doesn’t have clean water and electricity.

    The amount of work needed to bring most up to our level is staggering and while menial labor might be replaced the task of human relations and organization will never cease.

    Robots as “smart” as they will become will never understand or think like we think so the responsibility of organizing the human economy for human beings is ours.

    We merely need to think of news things to do with ourselves.

    We are the creators and by definition are of a higher order than that which we create even if so-called “AI” and rely on them will in reality will simply be relying on the system that created them and thus imprisoning ourselves within a system of own creation and that is greatest danger.

    What we should be learning from AI is how we think now and how we improve our thinking in combination with so-called AI tools rather than this stupid tendency to think that in the future machines will do all the thinking. Think enhancement not replacement. By failing to envision a future for human creativity you kill creativity in the present and in the foreseeable future.

  • Septeus7 June 21, 2010 on 10:38 am

    Everyone seems to be forgetting how the benefits of these robots are for now concentrated in the advanced economies and that majority of the world still doesn’t have clean water and electricity.

    The amount of work needed to bring most up to our level is staggering and while menial labor might be replaced the task of human relations and organization will never cease.

    Robots as “smart” as they will become will never understand or think like we think so the responsibility of organizing the human economy for human beings is ours.

    We merely need to think of news things to do with ourselves.

    We are the creators and by definition are of a higher order than that which we create even if so-called “AI” and rely on them will in reality will simply be relying on the system that created them and thus imprisoning ourselves within a system of own creation and that is greatest danger.

    What we should be learning from AI is how we think now and how we improve our thinking in combination with so-called AI tools rather than this stupid tendency to think that in the future machines will do all the thinking. Think enhancement not replacement. By failing to envision a future for human creativity you kill creativity in the present and in the foreseeable future.

  • hakenema June 21, 2010 on 5:47 pm
  • hakenema June 21, 2010 on 1:47 pm
  • Summerspeaker June 22, 2010 on 4:27 pm

    Automation holds the potential to revolutionize the world economy and free the species from toil. Under the current system, however, prospect look bleak. Eventually governments will likely have to implement something Marshall Brain’s plan for universal minimum income or face revolution.

  • Summerspeaker June 22, 2010 on 12:27 pm

    Automation holds the potential to revolutionize the world economy and free the species from toil. Under the current system, however, prospect look bleak. Eventually governments will likely have to implement something Marshall Brain’s plan for universal minimum income or face revolution.

  • redd June 22, 2010 on 4:37 pm

    honestly, watching hundreds of robotics videos on Frequency, including robot olympics, i’m astonished, this already feels light years ahead of what seemed likely to happen in my lifetime – http://www.frequency.com/video/robot-olympics/124872

  • redd June 22, 2010 on 12:37 pm

    honestly, watching hundreds of robotics videos on Frequency, including robot olympics, i’m astonished, this already feels light years ahead of what seemed likely to happen in my lifetime – http://www.frequency.com/video/robot-olympics/124872

  • DG June 23, 2010 on 8:45 pm

    I was recently reading an article on Managing Automation’s website. They were talking about [Robotics] and it’s use in various fields.

  • DG June 23, 2010 on 4:45 pm

    I was recently reading an article on Managing Automation’s website. They were talking about [Robotics] and it’s use in various fields.