Competitive Intelligence: What happens when robots take our jobs?

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Robot arms by Nachi Robotic Systems work on the body of a car at the International Robot Exhibition in Tokyo/Image: REUTERS/Thomas Peter

(This article is part of the World Economic Forum Annual Meeting 2016 )

Technologies such as big data, advanced analytics, the internet of things, wearables, advanced robotics, learning machines and 3D printing are finding their way into factories.

Despite the sluggishness of change on today’s factory floors, this digital wave is slowly but surely revolutionizing manufacturing, contributing to major productivity enhancements and the emergence of innovative production paradigms that deliver more tailored and efficient solutions.

Needless to say, this transformation has profound implications for manufacturing employment, affecting everything from the size of the workforce, to the skillsets required and the locations of factories. Will this Fourth Industrial Revolution lead to a jobless future for manufacturing or will the “traditional” response of education and training allow workers to remain employable?

A factory with no employees?

According to Autodesk CEO Carl Bass, “The factory of the future will have only two employees: a man and a dog. The man will be there to feed the dog. The dog will be there to keep the man from touching the equipment.”

Indeed, from Jeremy Rifkin in the End of Work to Martin Ford in the Rise of the Robots, economists have been predicting that automation will make human jobs – at least as we know them today – obsolete in the not-too-distant future. In the United States alone, manufacturing jobs have fallen from 25% of the total in 1970 to approximately 10% today, as James H. Lee reminds us in his blog on the World Future Society website. Productivity and employment, which rose and fell in tandem until the early 2000s, now show an increasing gap, reflecting the fact that humans are being displaced by machines for many jobs.

Carl Benedikt Frey and Michael A. Osborne estimate that 47% of US jobs are at risk due to “computerization”. This trend is not just a Western-centric phenomenon; according to David Rotman, “fewer people work in manufacturing today than in 1997, thanks at least in part to automation.” In fact, Foxconn announced in August 2012 that they would introduce one million of robots within three years to replace human labour.

So will this trajectory lead to a jobless future for manufacturing? Not quite – or at least not immediately. But there is no doubt that Industry 4.0 will fundamentally change the nature of manufacturing jobs.

A different type of manufacturing worker

Some human manufacturing tasks, such as heavy lifting, precision positioning and visual quality control, will most certainly be transferred to or supported by robots, which are not only more efficient and effective than humans, but can communicate seamlessly with one another. Human workers will have to learn to work side-by-side and in conjunction with robots. Advanced automation will increase workers’ acceptance of safe and collaborative machines with human-like physiognomies working close to them.

This, along with wearables, augmented reality and other technologies, will change the nature of traditional blue-collar work, which will become both more complex and sophisticated, but also increasingly supported by technology. It is hard to predict whether Industry 4.0 will call for more- or less-skilled workers, but it is clear that the requirements will be very different, with a greater focus on flexibility and adaptability, and potentially less on expertise and craftsmanship.

Nevertheless, robots are still imperfect, and their capabilities are not yet sufficient to fully displace humans. Furthermore, and despite constant progress, the ROI for fully automated manufacturing is still unproven, raising doubts about the speed with which Industry 4.0 is gaining traction. But the revolution is most certainly under way.

A challenging Schumpeterian transition

Throughout previous industrial revolutions, overall job creation has always been positive, but there are serious doubts that this will hold true for this fourth industrial revolution. There does seem to be a consensus that it will change all professions in ways perhaps we are yet to understand.

The other problem with looking at the future of manufacturing employment through the lens of history is that it does not take into account the exponential nature of digital technologies. The ubiquitous connectivity of people and machines, and the real-time data that define the Fourth Industrial Revolution, are governed by Moore’s law (doubling of the performance/cost ratio every 12 to 18 months), while we tend to think and react in a linear mode. In addition, this transformation is not limited to manufacturing. It potentially touches all knowledge and service jobs, thereby raising a much bigger question for society.

The risk we are facing in the near future is mass unemployment for some categories of workers, combined with lack of skills in other categories – and the political and social implications of such imbalances. Will companies, individual governments and society at large (including educational systems and social safety nets) be able to adapt quickly enough to this new paradigm and create an environment in which all can contribute? For this to happen, all parties will need to collaborate in order to invent a systemic, social and sustainable model for a better future of work.

Source: Written by Xavier Mesnard, Partner, A.T. Kearney

The views expressed in this article are those of the author alone and not the World Economic Forum.

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