How Robots Change the World – our extensive analysis of this far-reaching phenomenon – sheds new light on the consequences for future productivity, growth and manufacturing jobs as well as how robots will transform the much larger, but so far less automated services sector.
Over the past decade, the robotics revolution has captured the world’s imagination. Since 2010, the global stock of industrial robots has more than doubled and innovations in engineering and machine learning portend an accelerated adoption of robots in service sector occupations over the next five years. Today, approximately one of every three new manufacturing robots is being installed in China. Our econometric modelling finds that on average each newly installed robot displaces 1.6 manufacturing workers.
This finding includes other labour market indicators, over an 11-year timeframe, for 24 EU countries (minus Croatia, Cyprus, Luxembourg and Malta), along with Norway, the US, Japan, and South Korea. By 2030, we estimate that as many as 20 million additional manufacturing jobs worldwide could be displaced due to robotisation. Countries included in this estimate account for more than 90% of industrial robot installations: EU28, US, Japan, South Korea, Australia, China, Taiwan, Thailand, Mexico, India, Canada, Singapore, Brazil, Turkey, and Malaysia.
Regions At Risk
This great displacement will not be evenly distributed around the world, or within countries. The negative effects of robotisation are disproportionately felt in the lower-income regions of the globe’s major economies — on average, a new robot displaces nearly twice as many jobs in lower-income regions. This finding has important social and political implications. Given the stakes, policymakers need an early warning system to help them mitigate the risks of automation on employment.
As part of this study, we have developed a Robot Vulnerability Index that ranks every region of seven developed economies in terms of how susceptible their respective workforces are to the installation of industrial robots. Our Index highlights that the most vulnerable regions are removed from the wealthier districts of their home countries — such as Cumbria in the UK, Franche-Comté in France, and the high desert of Eastern Oregon in the US. These rural regions often include towns or cities with strong manufacturing heritages that play a large part in the regional economy. Regions that surround knowledge-intensive cities, such as Toulouse and Grenoble in France, or Munich and Stuttgart in Germany, typically show much lower levels of vulnerability to the rise of the robots. This is also true of capital cities such as London, Paris, Seoul, and Tokyo.
Robots are steadily gaining traction in specific segments of the service economy. We assess the likely impact (and timeframe) of service robot roll-outs in five key sectors: healthcare, retail, hospitality, transport, and construction and farming. We are considering robots only as physical machines, and not including the already popular service-industry software like robot process automation (RPA) that can speak, hear, read, conduct transactions, automate processes, and so on.
One key consideration for anticipating the pace of robot deployment in service industries is the environment in which these robots may be asked to operate — in particular, the extent to which service jobs include repetitive functions. Jobs like warehouse work are in imminent danger, while other jobs in less structured environments will likely be carried out by humans for decades to come.
It will be difficult for machines to replace humans in service sector occupations that demand compassion, creativity, and social intelligence. Physical therapists, dog trainers and social workers are likely to remain secure in their jobs, for instance, even if truckers and warehouse workers see the future of their jobs jeopardised. Policymakers, business leaders, technology companies, educators, and workers all have a role to play. Robots are on the rise as never before. Preparing for and responding to the social impacts of automation will be a defining challenge of the next decade.