Robots are increasing in use in every industry. Below are some of the ways robots can affect the economy.
- Robots are taking over your job!
- They have been overtaking manufacturing work for decades.
- Although there might be some negative effects on some labor groups, robots or automation can increase productivity, lower production prices, and create new jobs in tech.
Machines are on the Rise
Over thousands of year, technology has been a key factor in increasing efficiency in work. It started with simple farming tools and ended up as modern-day assembly-line machines in factories. Robots are more common in every aspect of business. Robots can work alongside human workers, or they can completely replace them. Amazon.com Inc. NASDAQ: AMZN has a number of robots that stock its warehouses and retrieve and package products.
A greater standard of living is possible by higher wages, lower prices of goods and/or services, and a wider variety of products. Higher living standards are possible through higher wages and lower prices, which can lead to a greater range of services and products. 6
The quality of labor is improved by better education and training. Capital is the key to productivity growth. This can be achieved through investments in machines and robotics as well as other items that produce output. TFP, which is frequently cited as the greatest source of productivity growth comes from the synergies that labor and capital create. 7 While the workforce’s education and productivity remain constant, TFP will rise if the machines they are using increase in productivity. Robots have unquestionably made production facilities’ “machine” aspect more efficient. Even though factories still have a human component, robots can increase productivity.
Gross Domestic Product Growth
As you can see, an increase productivity is accompanied by an increase gross domestic product. “Robots at Work” was a paper published by Georg Graetz of Uppsala University in December 2018. Guy Michaels from the London School of Economics examined the effects of robots on the economy. They looked at 16 countries as well as the United States. They analyzed data from a 15-year span ending in 2007. Graetz & Michaels found that in the aggregate, the GDP growth over the period of 15 years was 0.36% across all 17 countries. This significant growth is comparable to the gains in productivity that were experienced with steam technology. 8
The Creation of Jobs
Many people are unaware that robots have created new high-paying positions that require skilled workers. While robots are capable of replacing low-skilled workers as well as automating tasks, robotics and automation are creating jobs that require skilled workers that are focused on high-value work. For example, robots in manufacturing can handle menial tasks such material sorting, transportation, and stocking. But higher-skilled jobs such as quality-related roles, for which humans are better equipped, can be performed by more skilled workers.
Although it is true that automation and robots are taking away entire job categories in a number of sectors, workers still have the opportunity to secure higher-skilled jobs with higher pay, provided they can be skilled and educated enough to fill those positions.