Robots vs humans: this round to the bots

Originally published by Azeem Azhar on LinkedIn: Robots vs humans: this round to the bots

It seems like robots are taking jobs from humans, according to most recent research from Daron Acemoglu and Pascual Restrepo.

This is an extract from my newsletter, Exponential View. Sign-up below.

Last year, the pair of economists were much more buoyant about the fate of human workers in the face of automation. But now they estimate that robots

are to blame for up to 670,000 lost manufacturing jobs between 1990 and 2007, it concluded, and that number will rise because industrial robots are expected to quadruple.

During that period, some estimate that US manufacturing employment declined from 17.9m to 14m. Robots are thus responsible for about one in six lost manufacturing jobs in America over this period.

Acemoglu and Restrepo reckon the increase of 1 robot per thousand workers reduces employment rates (by between 0.18 and 0.34%) and wages (by between 0.25 and 0.5%). Another way to look at this is that every additional robot reduces employment by 5.6 workers.

The International Federation of Robotics reckons that the number of industrial robots in operation in the world will increase by about 25% between 2017 and 2019. The US has the third highest number of industrial robots in the world. Between the US and Canada there are a total of 269,000 robots. The fastest growing sectors are in automotive OEMs and component supply.

Measured by intensity, that is how many robots are used per human worker, the US is far off the leaders. The most robo-intense manufacturers are in Asia. South Korea, which tops the list, has more than 500 robots per 10k manufacturing workers. In the US, that ratio is a more pedestrian 180-200. (That is still above the UK at fewer than 100 robots per 10k human employees.)

If, and it's a big if, US factories get as automated as those in South Korea, we would see an additional 500-600k robots come on stream. And extrapolating from the NBER data, that would increase pressure on 2.5 and 3m manufacturing jobs (and the attendant wages of the remaining workers in the sector).

Time to revisit "The Humans are dead"?

If you enjoyed this, I recommend that you sign-up to my weekly newsletter, Exponential View.