This post is part of Robohub’s Jobs Focus. 

During that same period the US trade deficit with China grew from $100 billion to over $270 billion as many companies chose to outsource their manufacturing to low wage nations such as China where labor costs were 1/10 that of the US. In some cases, entire industries such as mobile phones, consumer electronics, and computers were outsourced to contract manufacturers and moved offshore, creating as many as 25 jobs in these low wage countries for every job created in the US.

I can speak to this firsthand. In the late 1990s, the largest market of my company at the time, Adept Technology, was automating mobile phone and computer factories in the US. As the pace of innovation accelerated and models proliferated, our robots did not have the flexibility or intelligence to keep up with the rate of change. Additionally, these manufacturers were facing increasing pressure from low cost competition that left them with no choice but to look to low cost labor markets to produce their products, first in Mexico then Brazil then China. At the time there were less than 350 million mobile phones produced in the world with the majority produced in the US and Europe. Today there are over one billion mobile phones produced a year and not a single one is produced in the US even though the US market consumes over 200 million units.

The robots of today are smarter, more agile and less expensive than their ancestors of the 1990s. They integrate sophisticated sensing technology that allows them to adjust to changes in their environment and in the products that they produce. Some are even leaving their traditional isolated cages to work in tandem with people, making the combination even more productive. All of this makes the new generation of robots far more adaptable to today’s manufacturing world, and a much better technical fit than they were a decade ago.

At the same time wages in countries such as China have been increasing at a rate close to 20% per year. Add to this increasing transportation costs and the negative impact of a supply chain that stretches around the world, and more and more companies are rethinking their manufacturing strategies.

Back in the US, a new manufacturing equation is emerging, called Smart Manufacturing. Smart Manufacturing is the production of traditional products using advanced technologies such as computers, robots, lasers and 3D printers. Using these tools dramatically improves productivity and lowers costs as compared to traditional manufacturing approaches, while maintaining flexibility and improving time to market. Smart Manufacturing is making US goods competitive with products produced anywhere in the world, even in the lowest wage nations, and the result is that the decades old trend of offshoring is being replaced with a new trend, re-shoring.

Re-shoring is not a concept founded in patriotism or built on motherhood and apple pie ideals. Re-shoring is a powerful business tool founded on solid economics. For centuries manufacturers have employed a strategy of chasing cheap labor around the world, moving from one low wage nation to the next as costs rose in the developed world. While this has resulted in lowering direct product costs, it has also added significant expense related to managing a supply chain that extends around the world. It has also slowed the rate at which new products can be ramped with product development and production separated by thousands of miles and several time zones.

Smart Manufacturing has the potential to bring an end to manufacturer’s centuries old dependence on low cost labor, and open up a new strategy: developing and producing goods in the markets where they are consumed. Localizing and integrating marketing, product development, manufacturing and distribution is the ultimate operational model. It allows for more targeted products while eliminating the costs of managing global supply chains and disjointed product introduction processes. Automation becomes the great equalizer, allowing products to be produced anywhere in the world for the same cost, and freeing manufacturers from consolidating manufacturing in low wage nations.

Smart Manufacturing and robotics have one other benefit, the creation of high value, high wage jobs. In a 2009 study commissioned by Intel, ECONorthwest found a strong connection between Smart Manufacturing and the creation of jobs. At Intel’s highly automated factory in Hillsboro, Oregon, they employ close to 16,000 people. ECONorthwest found that for every 10 jobs created within the factory there were an additional 31 jobs created in the local community to support the factory. These indirect jobs were anywhere from 40-60% above the statewide average income for Oregon.

Other studies have pegged the jobs multiplier of Smart Manufacturing at between 2 and 10 times the number of direct manufacturing jobs. In a separate study commissioned by the International Federation of Robots (IFR), Metra Martech estimated that the robot industry has created between 8 million and 10 million jobs throughout its history, and forecast that over the next decade the industry will create between 2 and 3.5 million direct jobs and almost as many indirect jobs. The study went on to show a tight correlation between the increased use of robots and a reduction in the overall unemployment rate. They also point out that emerging economies are amongst the fastest growing users of robots. According to the IFR, Korea and China are now the top consuming nations of industrial robots, surpassing the US, Germany and Japan. China’s ascent to the top has been nothing short of amazing.

From 2008 to 2012, China’s use of robots has increased over 300% in a nation where average manufacturing wages still remain between $1.00 and $1.50 per hour.

Looking to the future, the manufacturing world is becoming flat. Robotics and other advanced technologies are leveling the playing field and eliminating the advantage and influence that low cost labor has had on manufacturing. With all manufacturers having access to the same set of tools, the winners — and ultimately the jobs — will go to those producers who can most effectively and creatively leverage these tools to their competitive advantage. In the end robots are about jobs.

See all the posts in Robohub’s Jobs Focus.

Source: KUKA, 1983

This post is part of Robohub’s Jobs Focus.

There are at least 350,000 people directly employed by and in the industrial robotics industry. However, industrial robots are not made in the US; they are made in Japan, Korea and Europe, consequently more than half of those 350,000 jobs are offshore.

There are ancillary providers of components, software and other services for robots and installations but these jobs are hard to quantify. In general manufacturing there are known multipliers, but in robotics there is no known formula to extrapolate just how many jobs in these ancillary businesses are attributable to robotics.

The deployment of robots into a factory situation involves even more complex computations and assumptions — which is why the International Federation of Robotics (IFR) commissioned the UK-based research firm Metra Martech in 2009 to figure out how to compute the effect on jobs of the deployment of industrial robots.

The IFR annually collects, reports on shipments and sales, computes robots at work (versus idle or abandoned), and makes five-year sales and deployment projections of industrial and service robots worldwide. They summarize their data into two comprehensive books: World Robotics Industrial Robots 2012 and World Robotics Service Robots 2012 reflecting data for 2011. The 2013 books covering 2012 data will be available later this year.

Original Metra Martech Report
Metra Martech’s original report was delivered in February, 2011. It concluded that they had determined a job-creation ratio of 3.6 jobs for every robot deployed, and that with more robots, fewer jobs are lost. That’s why Germany, with hourly rates almost 50% higher than in the US, has remained globally competitive: they have twice as many robots per 10,000 workers as do Americans.

Their research claimed that 3 million jobs were created in factories where accuracy and consistency could not be achieved without robots, and another 300,000 jobs were created where poor working conditions were overcome by the use of robots.

Much has happened during and since 2008, the unfortunate base year for that report, which is why the IFR re-commissioned Metra Martech in 2012 to update their findings for more recent data.

Robots, Robotics and the 2013 Metra Martech Report
Early this year CBS News 60 Minutes aired a segment asking but not answering the question: Are robots hurting job growth? Much criticism from robotics industry professionals followed, including an International Federation of Robotics CEO press conference where an abstract of the updated version of the Metra Martech report was presented. Under the banner Robots Create Jobs, they cited the following reasons why they opposed the CBS 60 Minutes piece, and why robotics really does create jobs:

1. Robotics is a critical factor in rebalancing world manufacturing economies because it reduces the threat from low-cost-of-labor countries.
2. Although the recession temporarily drew attention away from unsatisfactory work conditions, enhancing work conditions is a driving force for using robots. Replacing dull, dirty and dangerous tasks with robots is the low-hanging fruit of robotics.
3. There are many new industries where only robots can produce precision and consistency standards at an affordable cost as demanded by the competitive global economy.
4. Job creation by robotics, between 2012 and 2020, will be 2.15 million to 3.5 million:
   1. This is the sum of new robotic products (.80 to 1.4 million),
   2. Current industry expansion (.45 to .70 million),
   3. Downstream jobs (.9 to 1.4 million).

It is the #4 items that are of interest to most readers and particularly Americans who, by and large, perceive a different set of “facts.”

US Facts
Americans are living through a confusing economic period. They see things in “home economics” terms: job creation is up but nowhere near covering population growth; unemployment has dipped slightly but hides the broader unemployment rate; stock markets are reaching new highs; and house prices and disposable income are both rising. Yet public sentiment is focused on jobs and job creation, and for good reason: millions have fallen off the employment grid and the employment figures don’t reflect the true numbers nor the hardships this has caused.

Hence the concern about jobs being taken away: about being left behind, about off-shoring, robots, relocation, acquisition, closures, consolidation or otherwise.

Reviewing the Revised Metra Martech Findings
John Dulchinos, former CEO of Adept Technologies, said at the IFR press conference when the revised report was launched (and reiterated in a recent email):

“Assessing job creation driven by robots is not an exact science and requires piecing together data based on a consistent set of assumptions. Over the past decade the US has lost 6 million manufacturing jobs. This is not the result of robots. It is largely due to offshoring by contract manufacturing companies who have taken a large slice of the manufacturing pie. What is not captured in all the government data is the number of downstream non-manufacturing jobs that disappear when a factory is no longer competitive with low-wage nations and is shut down.”

Part of the complexity of the Metra Martech report is that it must take into account the economic, population, industry variables and downstream multipliers unique to each of the main countries in the study. For example, manufacturing accounts for only 11% of employment in the US, but 24% in Germany and 27% in South Korea.

I asked Metra Martech’s Peter Gorle whether they relied solely on the IFR data or if they supplemented it with other data. Gorle responded by saying:

“The basic data on robot use came from IFR, but we at Metra Martech carried out considerably more research into the employment and unemployment figures and the growth rates in the main user sectors. This provided the fundamental position against which the use of robots was analysed.”

Then I asked how they attempted to report the number of people employed through the use of robots net of the number of workers displaced by robot deployment:

“While it is clear that robots can and do replace unskilled, dirty or dangerous occupations, there are two main drivers for added employment resulting from the use of robots. The first is the need to use the repeatability and accuracy which they can provide. Note that this is evident throughout the world no matter what local labour costs.

The second driver is the need for industrialised countries to overcome the benefit which the low wage countries offer in production. This tends to result in the loss of some jobs, but it enables companies to retain employees in parts of industry which would otherwise be lost to lower cost areas.”

Since most of the conclusions reached by Metra Martech are global in scope and conjectural in nature, it is important to examine the extent of their assumptions. One can see their process at work in the discussion of the chart shown below for the Electrical and Electronics sector:

“Hypothetically, if robots were removed, some products would become unviable, while others would move to low cost countries and be assembled by hand. Many tasks carried out in this sector [Electrical & Electronics], particularly by SMEs (SME refers to Small and Medium-sized Enterprises, i.e., small shops, factories with less than 100 employees), are still done by hand. The loss of jobs would thus be greater in the developed countries, and the gain in jobs greater in the lower cost industrializing countries. There are no statistics on this type of dependence and we have made broad estimates based on the above and the number of robots in use in the country in the sector.”

Bottom Line
Many of the assumptions in the updated Metra Martech report are sufficiently transparent such that one can readily accept their position and therefore their conclusions. Thus their projection of 2.15 to 3.5 million new jobs from 2012 to 2020 appears correct:

Although they don’t really address statistically what happens to displaced workers, they do say that they are often kept, retrained, and utilized in upscale jobs created as a result of the efficiencies reaped from the new robots. But they don’t provide any numbers or formulas to support this thesis.

The updated report moves away from a strict focus on industrial robotics, suggesting that SMEs and healthcare/medical robotics will show broad job growth in the next few years. Thus 21% to 24% of Metra Martech’s potential new jobs projections include service robots marketing and manufacturing. They rationalize this contradiction by saying that service robots can be likened to consumer products and therefore will need new manufacturing requiring robotics.

Two areas stand out as seriously unsubstantiated in the report:

1. Offsets for jobs displaced
2. Downstream jobs

Offsets for jobs displaced, although frequently mentioned in the report, could not be measured with the data available.

Downstream jobs include (1) employment in ancillary businesses that are needed to support robot construction, robotic installations, robot control, and (2) jobs created by adding well-paid robotics industry employees into the community. Metra Martech suggests a third group to be (3) other types of jobs in support of the use of the products manufactured where the products can only be produced by robots.

In manufacturing, an industry statistic to reflect downstream ancillary jobs is 1.3 jobs in a support business for every new job in manufacturing. This multiplier effect is frequently validated in general manufacturing. But applying that figure in the robotics industry is difficult because it relates to jobs, whereas the Metra Martech projections apply to robots deployed predicated on the data provided by the IFR. Nowhere in their report is there a correlation of the number of jobs replaced by a single robot; thus a true downstream jobs figure cannot be tabulated.

Consequently, I find the Metra Martech report somewhat flawed but not for lack of trying. It was a noble effort and remains a valuable tool showing that the robotics industry really does create jobs.

See all the posts in Robohub’s Jobs Focus.

If you liked this article, you may also be interested in:

• The great equalizer: How robotics frees manufacturers from consolidating in low-wage nations
• Jobs by the numbers: Economic reports on the robotics and manufacturing industries
• In agriculture robots replace job vacancies
• Jobs isn’t the issue for robotics
• Ability to do creative, non-routine work will be a must in the coming automation era. Is this realistic for most workers?
• Effect of robots on jobs? Only time — and management teams — will tell

See all the latest robotics news on Robohub, or sign up for our weekly newsletter.

This post is part of Robohub’s Jobs Focus.

Title
Economic Impact of Unmanned Aircraft Systems Integration in the US

Released
March 2013

Authors
Darryl Jenkins, Dr. Bijan Vasigh

Published By
Association for Unmanned Vehicle Systems International (AUVSI)

Shows the economic benefit of UAS integration into the FAA regulation scheme. “AUVSI’s findings show that in the first three years of integration more than 70,000 jobs will be created in the United States with an economic impact of more than $13.6 billion. This benefit will grow through 2025 when we foresee more than 100,000 jobs created and economic impact of $82 billion.”

Title
Report on the Positive Impact of Industrial Robots on Employment

Released
February 2013

Authors
Peter Gorle, Andrew Clive

Produced By
Metra Martech

Commissioned By
International Federation of Robotics (IFR)

“The report´s authors studied companies with more than 250 employees in automotive sector, electronics sector, food and beverages, plastics, chemicals and pharmaceuticals. The Report focused on six countries, Brazil, China, Germany, Japan, Republic of Korea and USA, which are considered to be representative of the global economy. Findings show that one million industrial robots currently in operation have been directly responsible for the creation of close to three million jobs. A growth in robot use over the next five years will result in the creation of one million high quality jobs around the world.” See also the 2011 report.

“Smart manufacturing requires at least three to four times the number of indirect jobs for outside support compared with direct jobs—versus the much lower employment multiplier of traditional factories today, which is only about one-half of a non-manufacturing support job for every job in a factory. That’s because smart factories typically use more non-manufactured supplies, high-tech services, IT support, transportation, and logistics companies to accommodate their significantly increased productivity and higher output, often exported globally due to its cost-competitiveness.”

“We find that previous measures of the health of the US manufacturing sector such as employment do not accurately capture the new face of US manufacturing that is now more capital intensive in the form of technology. This adoption of technology requires fewer, more highly skilled and productive workers than in the past. We use this structural change in the industry as a framework for analyzing the manufacturing sectors of emerging market economies. We also explore the future of US manufacturing in light of increasing demand for US factory technology among emerging market economies. We find that on an output basis, the manufacturing sector of the economy remains stronger and more productive than at any other point in the past. Furthermore, the future of the US manufacturing sector will likely depend more than ever on exporting our accumulated manufacturing knowledge and technologies to assist emerging market economies increase their capital intensity, productivity, and improve their manufacturing processes. We expect that this trend will help support further growth in US exports, which in turn will provide support to US economic growth.”

“Manufacturing employment has fallen by one third over the past decade. Some Members of Congress contend that foreign trade has allowed American employers to offshore these jobs. In fact, technology has driven down manufacturing employment. Computers have made manufacturers more productive by automating many routine tasks. American manufacturers now employ fewer workers to produce more goods. This means less expensive manufactured goods, more manufacturing jobs for highly skilled workers, and the elimination of millions of low-skill assembly line positions. These same forces have reduced manufacturing employment around the world. Increased productivity led Chinese employers to eliminate millions of manufacturing jobs in the late 1990s.”

See all the posts in Robohub’s Jobs Focus.

Pres. Obama, speaking at Carnegie Mellon University, June 24, 2011

“Today, I’m calling for all of us to come together- private sector, industry, universities, and the government – to spark a renaissance in American manufacturing and help our manufacturers develop the cutting-edge tools they need to compete with anyone in the world… With these key investments, we can ensure that the United States remains a nation that ‘invents it here and manufactures it here’ and creates high-quality, good paying jobs for American workers.”

Noble words spoken to a focused audience. But there is much confusion about why manufacturing is important, and even more confusion as to how robots – which displace workers – are necessary for America to retain it’s competitive edge and manufacturing prowess.

The auto industry is a big user of robots and also a big employer. The extent of its collapse played havoc with communities all over the country where laid-off employees drained the coffers of unemployment insurance and didn’t contribute taxes to the community from their wages and purchases. Aside from the pain of the situation and the myriad ways that it affected the people in those communities, the broad view shows how interrelated we all are to manufacturing – and to the auto industry.

The confusion and obfuscation from politicians has been constantly in the news. Since 2008, when President Bush approved a $17.4 billion auto bailout, the first of many loans that trailed into the Obama Administration, pundits and politicians have derided it, ridiculed it, and Mitt Romney mildly labeled it as “[the] wrong way to go” (without ever suggesting the right way).

Manufacturing is a critical component to the health of a country’s overall economy. The most clear example of why this is is the trickle down effect that happens when a 3rd shift is added to an auto plant.

When automakers add overnight production lines, many companies, communities and individuals benefit. This is significant because at the lowest point of the economic crisis, most auto plants reduced staff and ran just a single shift; second shifts returned throughout 2011 and recently third shifts have begun. GM, for example, is adding more than 4,300 3rd shift jobs in four states.

The trickle down effect is described in a Bloomberg Businessweek article: A third shift typically requires about 1,000 autoworkers and creates about 7,850 spinoff jobs (7.85:1) ranging from police and fire workers to construction, retail, and restaurant employees. A night shift added at a GM factory also adds night shifts at childcare centers, cafes, bars and dry cleaners. Other service businesses stay open longer hours as do dentists and other professional services. Wages and taxes flow into the community from all these new workers. Sixty percent of spinoff jobs occur within a 60-mile radius of the factory where the new workers are employed.

Headlines Trumpet Big Jobs Gains by Deploying Robots

In a press release picked up by all the major news media, the International Federation of Robotics predicted that robots will contribute 1 million new jobs in this decade and will save another 2 million jobs from going offshore. Their commissioned study reported that:

In world terms, three to five million of jobs would not exist if automation and robotics had not been developed to enable cost effective production of millions of electronic products, from phones to playstations. 

Other headlines exclaim that robot sales in 2011 exceeded all expectations and that investment in robot installations surged globally in 2011 to 150,000 units sold – a year-over-year growth of 30%. According to WANTED Analytics, a real-time talent analytics site, there were over 2,100 U.S. job ads for robotics skills in January, 2012, a 44% year-over-year growth rate from 2011.


What are the figures for robotics? What happens when a robot is deployed in a factory?

From a presentation analyzing the Metra Martech Study by Mike Wilson, Chairman of the British Automation & Robotics Assoc.

In a recent study commissioned by the International Federation of Robotics, the ratio for job creation was determined to be 3.6 for every robot deployed.

Jobs are created at the robot manufacturer’s site, at the factory where the robot is deployed, and also at companies that install, configure and maintain the robots.

At the site where the robot is deployed, even though some jobs are replaced by robots, many jobs are preserved from moving to lower cost labor factories offshore. There is much evidence proving that with more robots, fewer jobs are lost. That’s why Germany, with it’s hourly rates almost 50% greater than in the US, has remained competitive: they have twice as many robots per employee as do the Americans. There are also ancillary jobs created at educational institutions that teach robotics, at robot component suppliers, and at engineering and consulting companies that provide integration services and equipment.

The IFR Metra Martech study showed that 300,000 workers are directly involved in the manufacture and operation of robots and an additional 3 million jobs were created in factories where accuracy and consistency could not be achieved without robots; and another 300,000 jobs were created where poor working conditions were overcome by the use of robots — 3.6 million total. Most of these workers are in the electronics (1.2 million) and automotive (1.5 million) industries. Thus the Metra Martech study is suggesting a ratio of 3.6:1 based on the 1.15 million industrial robots presently at work around the world.

The study goes on to suggest that an additional 2-3 million jobs were created in situations where employment would be wiped out if manufacturing costs were not reduced [i.e. saving jobs rather than adding to employment]. This is a western industry problem, the problem of moving jobs offshore, caused in the past 20-30 years by the growth of industries in the low cost countries, particularly China and India. The report also adds another 3-5 million jobs created downstream by new products and services (jobs in the form of design, engineering, distribution, handling, marketing, sales, etc.) that wouldn’t happen without the use of robots. It’s a little far-fetched to add these two figures to the previous ratio but, if we did, then the ratio would be 8.4:1, a figure that is closer to the ratio in the auto industry (7.8:1) described above.

Projections for this decade in industrial robotics

In the next few years, as the cost of sensors and lightweight robots become more affordable and artificial intelligence enables robots to be more intuitive and trainable, the marketplace of industrial robot users will increase significantly. SME’s – Small and Medium Enterprises – companies with less than 250 employees – will be able to acquire, train and quickly utilize portable robots to help them become competitive in the global marketplace by enhancing productivity with robots.

Also in the next few years, the use of industrial robots in Asia will change the number of robots in use dramatically. Foxconn, the component manufacturer and electronics assembler, recently began a program to build and install 1 million robots by 2015. If achieved, that will almost double the world’s industrial robot population.

Beneficiaries and stakeholders of industrial robotics

• Investors and risk takers who want a fair and stable return on their investment.
• Those who make the robots want to work in a thriving industry with lively peers, good benefits and the promise of job stability.
• Workers that make the components and ancillary products or provide engineering and integration.
• Factory owners, by deploying robots, want to reduce waste, maximize resources, provide a better and safer workplace for their workers, and maximize efficiency and productivity to stay competitive in the global marketplace.
• Factory workers who, through the use of robotics, no longer need to toil in dull, dirty or dangerous situations.
• Factory owners also want to keep their factories nearby for control, to foster goodwill, and to be near a willing resource pool in and from the community.
• Communities surrounding factories where taxes and wages spent not only contribute to the wellbeing of people in the area but also add income to the local governments (in the form of sales, income and property taxes) letting them invest in the infrastructure that makes everything work.

Bill Clinton, in a recent commencement speech at NYU, said that in the last 30 years:

Companies have come to operate as if they have obligations only to their shareholders. The problem is that if you do that you ignore the other stakeholders. That could be why wages have been virtually stagnant for the past 30 years, because workers are stakeholders and they’ve been ignored. It could be why communities have been unable to undertake economic transformations in many places, because communities are stakeholders and they’ve been ignored. It could be why customers don’t care so much what the source of their purchases are, they’re also stakeholders. and they’ve been ignored. [Transcription from video of Pres. Clinton’s commencement address at NYU, 2011.]

A noble sentiment on which to end this article… but one that can be achieved if we understand that we are all in this together… we are allstakeholders and beneficiaries.

Pres. Obama, speaking at Carnegie Mellon University, June 24, 2011

“Today, I’m calling for all of us to come together- private sector, industry, universities, and the government – to spark a renaissance in American manufacturing and help our manufacturers develop the cutting-edge tools they need to compete with anyone in the world… With these key investments, we can ensure that the United States remains a nation that ‘invents it here and manufactures it here’ and creates high-quality, good paying jobs for American workers.”

Noble words spoken to a focused audience. But there is much confusion about why manufacturing is important, and even more confusion as to how robots – which displace workers – are necessary for America to retain it’s competitive edge and manufacturing prowess.

The auto industry is a big user of robots and also a big employer. The extent of its collapse played havoc with communities all over the country where laid-off employees drained the coffers of unemployment insurance and didn’t contribute taxes to the community from their wages and purchases. Aside from the pain of the situation and the myriad ways that it affected the people in those communities, the broad view shows how interrelated we all are to manufacturing – and to the auto industry.

The confusion and obfuscation from politicians has been constantly in the news. Since 2008, when President Bush approved a $17.4 billion auto bailout, the first of many loans that trailed into the Obama Administration, pundits and politicians have derided it, ridiculed it, and Mitt Romney mildly labeled it as “[the] wrong way to go” (without ever suggesting the right way).

Manufacturing is a critical component to the health of a country’s overall economy. The most clear example of why this is is the trickle down effect that happens when a 3rd shift is added to an auto plant.

When automakers add overnight production lines, many companies, communities and individuals benefit. This is significant because at the lowest point of the economic crisis, most auto plants reduced staff and ran just a single shift; second shifts returned throughout 2011 and recently third shifts have begun. GM, for example, is adding more than 4,300 3rd shift jobs in four states.

The trickle down effect is described in a Bloomberg Businessweek article: A third shift typically requires about 1,000 autoworkers and creates about 7,850 spinoff jobs (7.85:1) ranging from police and fire workers to construction, retail, and restaurant employees. A night shift added at a GM factory also adds night shifts at childcare centers, cafes, bars and dry cleaners. Other service businesses stay open longer hours as do dentists and other professional services. Wages and taxes flow into the community from all these new workers. Sixty percent of spinoff jobs occur within a 60-mile radius of the factory where the new workers are employed.

Headlines Trumpet Big Jobs Gains by Deploying Robots

In a press release picked up by all the major news media, the International Federation of Robotics predicted that robots will contribute 1 million new jobs in this decade and will save another 2 million jobs from going offshore. Their commissioned study reported that:

In world terms, three to five million of jobs would not exist if automation and robotics had not been developed to enable cost effective production of millions of electronic products, from phones to playstations. 

Other headlines exclaim that robot sales in 2011 exceeded all expectations and that investment in robot installations surged globally in 2011 to 150,000 units sold – a year-over-year growth of 30%. According to WANTED Analytics, a real-time talent analytics site, there were over 2,100 U.S. job ads for robotics skills in January, 2012, a 44% year-over-year growth rate from 2011.


What are the figures for robotics? What happens when a robot is deployed in a factory?

From a presentation analyzing the Metra Martech Study by Mike Wilson, Chairman of the British Automation & Robotics Assoc.

In a recent study commissioned by the International Federation of Robotics, the ratio for job creation was determined to be 3.6 for every robot deployed.

Jobs are created at the robot manufacturer’s site, at the factory where the robot is deployed, and also at companies that install, configure and maintain the robots.

At the site where the robot is deployed, even though some jobs are replaced by robots, many jobs are preserved from moving to lower cost labor factories offshore. There is much evidence proving that with more robots, fewer jobs are lost. That’s why Germany, with it’s hourly rates almost 50% greater than in the US, has remained competitive: they have twice as many robots per employee as do the Americans. There are also ancillary jobs created at educational institutions that teach robotics, at robot component suppliers, and at engineering and consulting companies that provide integration services and equipment.

The IFR Metra Martech study showed that 300,000 workers are directly involved in the manufacture and operation of robots and an additional 3 million jobs were created in factories where accuracy and consistency could not be achieved without robots; and another 300,000 jobs were created where poor working conditions were overcome by the use of robots — 3.6 million total. Most of these workers are in the electronics (1.2 million) and automotive (1.5 million) industries. Thus the Metra Martech study is suggesting a ratio of 3.6:1 based on the 1.15 million industrial robots presently at work around the world.

The study goes on to suggest that an additional 2-3 million jobs were created in situations where employment would be wiped out if manufacturing costs were not reduced [i.e. saving jobs rather than adding to employment]. This is a western industry problem, the problem of moving jobs offshore, caused in the past 20-30 years by the growth of industries in the low cost countries, particularly China and India. The report also adds another 3-5 million jobs created downstream by new products and services (jobs in the form of design, engineering, distribution, handling, marketing, sales, etc.) that wouldn’t happen without the use of robots. It’s a little far-fetched to add these two figures to the previous ratio but, if we did, then the ratio would be 8.4:1, a figure that is closer to the ratio in the auto industry (7.8:1) described above.

Projections for this decade in industrial robotics

In the next few years, as the cost of sensors and lightweight robots become more affordable and artificial intelligence enables robots to be more intuitive and trainable, the marketplace of industrial robot users will increase significantly. SME’s – Small and Medium Enterprises – companies with less than 250 employees – will be able to acquire, train and quickly utilize portable robots to help them become competitive in the global marketplace by enhancing productivity with robots.

Also in the next few years, the use of industrial robots in Asia will change the number of robots in use dramatically. Foxconn, the component manufacturer and electronics assembler, recently began a program to build and install 1 million robots by 2015. If achieved, that will almost double the world’s industrial robot population.

Beneficiaries and stakeholders of industrial robotics

• Investors and risk takers who want a fair and stable return on their investment.
• Those who make the robots want to work in a thriving industry with lively peers, good benefits and the promise of job stability.
• Workers that make the components and ancillary products or provide engineering and integration.
• Factory owners, by deploying robots, want to reduce waste, maximize resources, provide a better and safer workplace for their workers, and maximize efficiency and productivity to stay competitive in the global marketplace.
• Factory workers who, through the use of robotics, no longer need to toil in dull, dirty or dangerous situations.
• Factory owners also want to keep their factories nearby for control, to foster goodwill, and to be near a willing resource pool in and from the community.
• Communities surrounding factories where taxes and wages spent not only contribute to the wellbeing of people in the area but also add income to the local governments (in the form of sales, income and property taxes) letting them invest in the infrastructure that makes everything work.

Bill Clinton, in a recent commencement speech at NYU, said that in the last 30 years:

Companies have come to operate as if they have obligations only to their shareholders. The problem is that if you do that you ignore the other stakeholders. That could be why wages have been virtually stagnant for the past 30 years, because workers are stakeholders and they’ve been ignored. It could be why communities have been unable to undertake economic transformations in many places, because communities are stakeholders and they’ve been ignored. It could be why customers don’t care so much what the source of their purchases are, they’re also stakeholders. and they’ve been ignored. [Transcription from video of Pres. Clinton’s commencement address at NYU, 2011.]

A noble sentiment on which to end this article… but one that can be achieved if we understand that we are all in this together… we are all stakeholders and beneficiaries.