Robots Set to Take Over 20M Manufacturing Jobs by 203027.06.2019

The latest report published by Oxford Economics claims that over the next decade, machines will replace humans in around twenty million manufacturing jobs, shrinking the global manufacturing human workforce by 8.5%. This shift may accelerate economic growth, but also further exacerbate wage disparities and economic inequality.

Robots are carving out an increasing presence in manufacturing—according to Oxford Economics, each newly installed robot eliminates 1.6 manufacturing jobs. And machines are quickly becoming much cheaper than human workers: between 2011 and 2016, the average unit cost for a manufacturing robot dropped 11%. Automated workers are also increasingly capable of functioning within more sophisticated manufacturing processes and varied production contexts. And the demand for manufactured goods continues to grow unabated. 

China stands as an example of the growing embrace of automation in manufacturing. PRC authorities have been heavily investing in automation in order to become the unquestioned world leader in manufacturing—at this point, around a fifth of all commercially deployed robots are working in China, and every third new industrial robot is installed there. According to Oxford Economics, by 2030 China could be operating around 14 million robots, far outstripping the rest of the world. This, in turn, would have a pronounced impact on the global economy, growing the global GDP by 3.5% (around $4.9 billion). 

It is undeniable that robots will boost efficiency and accelerate economic growth, triggering the emergence of new areas of industry. The Oxford Economics report argues that automation is also bound to create a slew of new jobs, which will appear at a rate comparable to the pace of “destruction” of old manufacturing jobs by robots. These new employment opportunities will include such emerging positions as AI systems techs and analysts overseeing robot programming. The transformation, however, will take a disproportionate toll on poorer regions, where lower-skilled workers will be prevented from taking advantage of the new opportunities. 

Report authors also contended that in some regions, the adoption of robotics would progress much more quickly than in others. Poorer cities, regions, and countries will be much more vulnerable to automation than their well-off counterparts. Why? Because knowledge and innovation workers usually cluster in larger cities and countries. And cognitive skills are much harder to automate than physical ones. Therefore, the report argues, urban areas will be much less vulnerable to automation of the workplace than rural ones. This, in turn, will further aggravate income inequality between cities and rural areas, as well as between larger regions. 

The report also stated, that “Automation will continue to drive regional polarisation in many of the world’s advanced economies, unevenly distributing the benefits and costs across the population.”