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How Robots Create Jobs
by Adil Shafi, President, ADVENOVATION, Inc.
ADVENOVATION, Inc. Posted 04/04/2012
In 2011, the International Federation of Robotics commissioned a report on how robots create jobs. http://www.ifr.org/robots-create-jobs/. The findings report 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.”
Further, the market research firm Metra Martech wrote, “In world terms three to five million 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.” The report actually covers several markets in the automotive, electronics, food and beverage, plastics, chemicals and pharmaceutical industries and focuses on countries like Brazil, China, Germany, Japan, Republic of Korea and USA. The complete report is available at http://www.ifr.org/uploads/media/Metra_Martech_Study_on_robots_02.pdf.
It is sometimes said in the media that robots take jobs away. Actually the opposite is true. The companies that hire and thrive and have cars in their parking lots are the ones that have embraced automation and used robots to create financial efficiencies and created jobs. This fact has been marginalized in the past by such opinion makers as organized labor and “headline seeking” media. Fortunately, after the recent recession, both are now realizing that this myth is busted and are routinely embracing the long term benefits of robots.
So, how do robots create jobs? Before we review the math and dynamics of robot jobs, let’s look at a similar perception problem that occurred one hundred years ago.
A One Hundred Year Old Example and Similar Lessons
Consider the horse driven cart business before the advent of cars (or the “iron horse” as a car was often called). In those days there were many jobs that revolved around horses: their breeding, feeding, grooming and related peripherals: saddles, stirrups, stables, etc. When the “iron horse” came about, these jobs were threatened. Inevitably those linked to the horse related professions resisted the advent of cars and cried foul about the ethics, morality or appropriateness of an iron horse in society. But, as Victor Hugo said, “no army can stop an idea whose time has come”.
People saw the benefits of cars: the comfort of the ride, the range of travel and the speed. The benefits over horses were irrefutable. It was not obvious at first but cars needed roads and that need created jobs. The manufacture of cars created jobs. And no one epitomized the benefits of mass manufacturing to create jobs and enhance the betterment of the masses than Henry Ford.
It is true that there was a disruption to the status quo and a transition; some of which was planned by people and some of which was not. But cars were here to stay and they have revolutionized jobs, society and our standards and ways of living for the past one hundred years.
In a similar way, robots or “iron workers” have created a similar dynamic in recent decades. It is true that many “manual hands work” related jobs were threatened by the efficiencies of robots. Robots have irrefutable benefits like their incessant efficiency, consistency, and relentless work ethic. Once again, “no army can stop an idea whose time has come”.
The manufacture of robots has created jobs. And a transition is underway, whether people or businesses have planned for it or not. Those that have not planned for it have been negatively affected by the high cost of labor and thereby loss of business competitiveness. Those that have planned for the transition have benefited and prospered from the transition.
As Charles Darwin noted, it is not the strongest or the largest of the species (companies in this case) that have survived the best; many hitherto large and powerful companies have filed for bankruptcy protection, but instead the ones most receptive and adaptive to change that have benefited the most. This need to adapt or change quickly via information or a “digital nervous system” was underscored by Bill Gates in his book “Business at the Speed of Thought”.
The Job Cost Numbers
Let’s look at the financial math behind the manual worker and the iron worker (industrial robot). In countries of high cost labor e.g., the United States of America, Western Europe and Japan, the hourly cost of manual labor can be about $20 per hour; it is higher in Europe but the example holds.
In BRIC (Brazil, Russia, India, China) countries of low cost labor, the hourly cost of manual labor can be as low as $1 per hour. This “financial advantage” has driven many companies to move manufacturing to countries of low cost labor. It requires significant financial strength and infrastructure and commitment to do so.
Such transitions require significant spans of time zones, language barriers, cultural adjustments, shipping and receiving logistics, customs, insurance, quality management, business monitoring and cash flow adjustments. For example a product made with $1 per hour labor requires training, shipping of materials, quality management, communication from halfway around the world, etc. and then when the product is ready, it may have to be paid FOB at the port of shipping in the Pacific Rim, ocean insurance and freight, customs clearance in Los Angeles, a delay to process the product, and then the expenditure of expensive fuel and gas to transport the product to its final point of distribution and sale.
All this magnifies that $1 per hour labor cost to as much as $10 per hour and calculators to estimate these “stack up of costs” are available on the internet e.g., at www.saveyourfactory.com. Jobs created in this manner are completely transitioned from countries of high cost labor to countries of low cost labor.
How Robots Create Jobs
Now enter robots, machine vision and automation. This too requires an investment like the overseas low cost labor option. The first one or two years require a ROI or Return in Investment period during which the cost of robots, machine vision and automation are recouped against the savings achieved from manual labor. But from then on, the cost of manufacture per hour is lower than the cost of producing in countries of low cost labor!!! This fact has not been well known in the past and it is the key to how robots create jobs and save businesses in countries of high cost labor.
Like the investment in the iron horse, the investment in the iron worker makes businesses stronger and allows them to compete against any other company and against any labor cost model in the world. Moreover, there are additional human quality of life benefits.
Companies that embrace this change and adapt to it end up seeing that their businesses can thrive in regions of high cost labor. They can preserve their local communities, pay taxes, preserve schools, churches, support businesses and family relationships without job disruptions, family disruptions or relocation. And after the Great Recession, this dynamic is enabling a host of manufacturing companies to regain their strength and to forge ahead with new competitiveness, a new relevance and a renewed strength. Even the BRIC countries are embracing robots for reasons of benefit that transcend low cost labor.
A Transition, a Plan, a Journey
This model of automation and renewed strength requires a proactive adaptation to change. A 100 employee company that has worked manually for 30 years will find itself with a need to transition, a need to plan and a need to journey to a better prosperity.
Inevitably, some manual work will transition to robots. Inevitably, the manual workers will require retraining and a new job focus in the same company.
There are many government programs available to provide the necessary training and to provide the necessary financing to accomplish the transition plan. This results in a corporate benefit as well as an employee benefit. It requires a commitment to learn these dynamics and opportunities and then to make a plan to forge ahead. Many companies that do so find themselves stronger against global competition and find that they can pay their former manual workers more money per hour in their newly invigorated newly automated and highly competitive company.
Industrial Robots After The Recession
The proof is in the market reports. All indications are that after the Great Recession, robot, machine vision and automation sales are growing at a pace far faster and higher than the pace of general economic recovery. Robot sales have set records in the last two years and the change has been embraced in droves.
The resistance to deploy robots is hardly seen any more amongst unions and even the media is touting the benefits of robots now; most notably in a recent Forbes magazine article entitled “Buy a Robot and Save America”. This article was based on a presentation made by Ron Potter, presently Director of Robotics Technology at Factory Automation Systems in Atlanta Georgia entitled, “The Business Case for Robots: How the US Can Compete and Win in Global Manufacturing”. Potter has been involved with robotics innovation for more than 40 years and is a 1995 winner of the highest award in industrial robotics, the Joseph F. Engelberger Award.
Different Kinds of Labor Unions
It is also true that after the Great Recession, labor unions have adapted and formed new “win win” models for the future. The labor wage structures tend to be more tiered now based on ability and experience and thus more biased towards meritocracy. The deals between car companies and unions are more mutualistic as evidenced in successful unions in post Second World War Japan (read David Halberstam’s “The Reckoning”) or the days of J Paul Getty as described in his famous book “How to be Rich.”
Industrial Robot Job Growth
So now, much like the manufacture of the iron horse (cars), the manufacture of the iron worker (robots) is accelerating.
Major robot companies and their suppliers are reporting corporate expansions and job creation. The demand for skilled robot technicians, engineers and related jobs has skyrocketed and our educational institutions are investing heavily in robot programs. The Robotic Industries Association (RIA) is consistently reporting growth in membership, member revenue, member jobs and related prosperity.
This is a much welcome trend for those who have journeyed in the last two decades through skepticism and even more importantly the maturing of technology and reduction of automation pricing to unleash the forces of mass adoption. It is refreshing to see the economic benefits after the recession. It is even more refreshing to see that fears of the success of robot and vision projects have diminished and that there is renewed confidence in the success of these projects in End User communities, in automation communities and in component supplier communities.
Moreover, the RIA has announced and implemented industry measures to provide objective certification to help raise the level of competency of member companies through the recent RIA Certified Robot Integrator Program and the AIA Certified Vision Professional (CVP) Program.
The Pervasive Physical Relevance of Service Robots
As if growth in the industrial robot job market is not enough good news, another phenomenon in job growth is unfolding before our eyes. The service robot has arrived and it is offering all kinds of benefit to humans outside factories just like the industrial robot has provided benefit inside factories. Jobs in the fields of service robotics are rapidly being created by small startups, large companies, government agencies and many universities and their commercialization arms.
The International Federation of Robotics projects that 85% of all robots will be service robots by 2018; a mere six years away. Once again, like iron horses in the past, and iron workers in the present, we should pay heed to the future and take lesson from Hugo’s saying: “No army can prevent an idea whose time has come”.
Service robots promise to do for the physical benefit of humans what computers have done for the mental benefit of humans. Computers have not taken over our brains, but they have vastly improved our ability to tap into information and to access it as needed in seconds. In a similar way, service robots are paving the way to physical benefits at home, on the road and at work in profound and pervasive ways.
Service robots are creating new solutions of convenience and efficiency and physical strength, and entirely new types of jobs in the air, on land, on water and under water. There are dozens of new markets, job fields and areas of activity in the field of service robots. They were explained in an RIA featured article in 2011 entitled: Service Robots and their Rapid Rise in Multiple Markets.
Where to Start with Robotics
If you are a student and wish to embark on a career in robotics, the Lego and FIRST robot competitions offer an excellent way to begin. You may focus on the mechanical, electrical, software, interface or application areas of robotics; or any combination thereof. Many universities and technical colleges are starting or growing their existing programs in robotics which are theoretical as well as practical and that emphasize hands on learning and team work.
In January 2012, RIA launched the new RhoBotaPhi blog site to help students, faculty and job seekers plan for career opportunities in robotics. The site is designed to assist students and educators connect with companies in the robotics industry. Extensive resources that every robotics student will need are made available. For more information, visit the RhoBotaPhi website at: www.rhobotaphi.com.
If you are an industry professional, you may wish to learn from free webinars that the RIA offers via its Market Trends Webinar Series. If you are an industrial worker and wish to learn how to implement robotics in your company, visit the following association websites: RIA’s Robotics Online, AIA's Vision Online and MCA's Motion Control Online.
National Robotics Week
April 7 – 15 marks the celebration of National Robotics Week; the RIA will be hosting two free webinars: Career Opportunities in Robotics (4/10/12) and Fundamentals of Robotics: Factory Solutions (4/12/12). Registration is required.
- Ron Potter, Director of Robotics Technology, Factory Automation Systems, email@example.com
- Edward Roney, National Account Manager – Intelligent Robotics, FANUC Robotics America, Inc., firstname.lastname@example.org
Adil Shafi is President of ADVENOVATION, Inc., specializing in software solutions and innovation in the field of Vision Guided Robotics (contact email@example.com or visit www.advenovation.com).